Topic

Country Competitiveness

Topic Country Competitiveness

Defining Country Competitiveness

Competitiveness is a relative strength necessary to win in competition against industry rivals. Country Competitiveness is the extent to which a country is capable of generating wealth, when measured against other countries, in world markets. To be competitive, governments must create and sustain a domestic and international competitive environment that favors business operations and productivity in one or more industries.

Topic Country Competitiveness

Defining Country Competitiveness

Productivity is important to competitiveness. Productivity is the value of the output by a unit of labor or capital. It is the prime determinant of a countrys standard of living, and the main source of national income. Productivity depends on the quality and features of products and the efficiency with which they are produced. Productivity does not come from what a country has, but from how it uses those resources.
Topic Country Competitiveness

Country Competitiveness and MNEs

The following contribute to country competitiveness:
Government policies, national values, national culture, economic structures, economic and governmental institutions, and national histories

Nations have become influential in international business operations. Most governments have institutions that promote economic development by marketing competitiveness factors to Multinational Enterprises.
Topic Country Competitiveness

Country Competitiveness and MNEs

Examples of governmental promotion include:
Italys promotion of resources, histories, and capabilities for shoe and leather production. Japanese promotion of culture, history, and capabilities in semiconductor and electronics production. Swedish promotion of history and culture related to concern for people and product safety.

Topic Country Competitiveness

Country Competitiveness and MNEs

Country competitiveness affects selection for operations locations. Competitiveness impacts the industry selection of an MNE. Competitiveness affects MNE innovation capacity and capability production. Competitiveness affects MNE global strategy.

Topic Country Competitiveness

Country-Level Determinants
Competitiveness improves when countries enhance their productivity capabilities, driven by the following factors:
Country-level Industry-level Firm-level IndividualScience, education, and innovation Economic soundness Finance Internationalization

Country-level fundamentals include:

Topic Country Competitiveness

Country-Level Determinants
Determinants of country competitiveness

Topic Country Competitiveness

Country-Level Determinants
Country-level determinants of country competitiveness

Topic Country Competitiveness

Science, Education, and Innovation

Countries promote technological innovation through establishing institutions that make tech innovation more likely. This is done by:
Developing basic scientific capability and R&D Supporting educational institutions that research, teach and support economic development Supporting technological innovation through economic and governmental policy.

Topic Country Competitiveness

Macroeconomic Soundness
Countries try to develop sustainable economic growth potential. They do this through creating policy that promotes:
Investment, consumption, growth in real income, service and production sector performance, and infrastructure development.

Essentially, they promote consumption, investment, government spending and net exports in order to build economic stability favoring international economic growth.
Topic Country Competitiveness

Finance
Countries try to develop financial sectors that invite international investment. They do this through:
Managing appropriate currency valuation Promoting solvency in the banking systems Managing appropriate levels of short-term external debt

Topic Country Competitiveness

Internationalization
Internationalization refers to the extent to which a country participates in international trade and investment. Promoting internationalization is done through:
Building positive export balances Establishing workable exchange rate systems Building financial and direct investment Keeping high foreign exchange reserves Promoting economic and cultural openness

Topic Country Competitiveness

Internationalization
Openness refers to the ease of which resources, goods, services, people, labor, technology, information and capital flow across boundaries. In order to promote openness
Countries seek to negotiate lower trade barriers and protectionism, While promoting cultural acceptance of global mindsets among the population
Topic Country Competitiveness

Industry-Level Determinants
Four broad attributes constitute national advantage
Factor Conditions
The nations position in factors of production, including labor, capital, land, and natural resources. The nations position in more sophisticated factors, such as skilled workforce, scientific base, infrastructure and information

Demand Conditions
The nature of market demand for the industrys product or service.
Topic Country Competitiveness

Industry-Level Determinants
Four broad attributes constitute national advantage
Related and Supporting Industries
The presence and support of a nations suppliers or other related industries Cluster when suppliers, manufacturers and distributors are located near each other

Rivalry and Business Practice

The nature of domestic rivalry in addition to the conditions governing how business are organized, managed and operated in a country
Topic Country Competitiveness

Industry-Level Determinants
Industry-level determinants of country competitiveness

Topic Country Competitiveness

Firm-Level Determinants
These strategies, principles, or approaches differentiate one countrys firms from those of others. Include technological innovation and organizing principles. Inevitably diffused across nations and imitated by foreign rivals.

Topic Country Competitiveness

Firm-Level Determinants
Firm-level determinants of country competitiveness

Topic Country Competitiveness

Individual-Level Determinants
People or human resources associated with country competitiveness:
Workers Entrepreneurs Managers Engineers Educators Politicians Interplay of the Four-Level Determinants
Topic Country Competitiveness

Individual-Level Determinants
Individual-level determinants of country competitiveness

Topic Country Competitiveness

Government Role
Governments can affect country competitiveness
Policy making and intervention Trade liberalization and exchange rate adjustment

Industrial policies all forms of coordinated government interventions to promote industrial development:
Import protection, financial subsidies, regulatory changes, training and infrastructure policies
Topic Country Competitiveness

Government Role
To play a supporting role in national competitiveness, governments should:
Emphasize competitiveness infrastructure Enforce strict product, safety, and environmental standards Deregulate competition Adopt strong domestic antitrust policies Boost goal-setting that leads to sustained investment
Topic Country Competitiveness