Destination Global Competitiveness

Transcription

1 Destination Global Competitiveness GETTING THERE THROUGH COLLABORATION, INNOVATION & INFORMATION PRESENTERS: ZAHRA ORANE COMPETITIVENESS ADVISOR DR. BEVERLEY MORGAN HEAD JHENELLE MCINTYRE COMPETITIVENESS ASSOCIATE

2 Competitiveness: A Brief Overview PREPARED AND PRESENTED BY ZAHRA ORANE MAY 9, 2008 Jamaica Employers Federation Convention Sunset Jamaica Grande Resort & Spa Ocho Rios, St. Ann -Jamaica

3 Competitiveness is. NOT Market Share Low Cost Exports per se IT IS Measured by productivity

4 Why Productivity? A Nation s Prosperity Productivity then supports high wages, a strong currency & attractive returns to capital Measured by the prices of goods/services in an open market & the efficiency in which they are produced Measured by the value of goods/services per unit of a nation s human capital & natural resources

5 Michael Porter s Determinants of Productivity Sophistication of Company Operations and Strategy Quality of the Microeconomic Environment Building the Microeconomic Foundations of Prosperity Michael E. Porter, Harvard University, in The Global Competitiveness Report

6 Porter s Sophistication of Firms Requires Shifts in Thought and Approach Building the Microeconomic Foundations of Prosperity Michael E. Porter, Harvard University, in The Global Competitiveness Report

7 Porter s Microeconomic Business Environment Firm Strategy, Structure and Rivalry Factor Conditions Demand Conditions Related and Supporting Industries Building the Microeconomic Foundations of Prosperity Michael E. Porter, Harvard University, in The Global Competitiveness Report

8 Clusters, Firm Development and Global Competitiveness PREPARED AND PRESENTED BY BEVERLEY MORGAN MAY 9, 2008 Jamaica Employers Federation Convention Sunset Jamaica Grande Resort & Spa Ocho Rios, St. Ann -Jamaica

9 Reaching out Establishment of Partnerships/ Building Networks Partnerships, key value, consider establishing with: UWI - Mona School of Business JTI (JAMPRO) Ministries of Government relevant to area of concern Key representatives of the donor community Key public sector bodies (PIOJ, JTB, SRC, Exim, e.g.) Jamaica Exporters Association Key private sector representatives Local consulting firms and individual consultants Representatives of the financial sector MSME firms Large firms Enabled by strong coordinating capacity of implementing organisation

10 Clusters: Definitions Clusters - striking feature of virtually every national, regional, state, and even metropolitan economy, especially those of more economically advanced nations Clusters are geographic concentrations of: q Interconnected companies q Specialized suppliers q Service providers q Firms in related industries and q Associated institutions (for examples, universities, standards agencies, and trade associations) q In particular fields that compete but also cooperate. (Porter, 1998).

11 Common Characteristics of Clusters 1. Shared understanding of competitiveness 2. Shared understanding of role of clusters in competitive advantage 3. Focus on removing obstacles and easing constraints to cluster 4. Structure that embraces all clusters in nation or state 5. Appropriate cluster boundaries 6. Wide involvement of cluster participants and associated institutions 7. Private- sector leadership 8. Close attention to personal relationships 9. Bias towards action 10. Institutionalisation Source: Porter (1998)

12 Clusters: Common Features P The development of the cluster results in greater sophistication of the firms P Firms encourage one another to develop global strategies P Firms enter more international markets P Firms source inputs together from overseas location P Firms improve operational efficiencies P Further, cluster is seen to function as a structure of incentives where explicit and implicit contracts are strengthened by the effect of reputation on firms P Coordination problems significantly resolved

13 Why Does it Matter? Cluster Theory: Location & Competitive Advantage Relationships among players develop gradually over time Create rich and supporting environment As consequence Firms embedded in these complex geographical contexts Rich in potential collaborators As well as competitors Gain competitive advantage Because the web of relationships arising from location in these physical spaces hard to replicate and imitate Thus it is that location and competitive advantage become linked

14 National Institutions & the Firm Firms do not create all the resources, infrastructure, and knowledge that are required to make a product (or service BM) by themselves. If one considers the variety of supporting organizations associated with a particular industry, it becomes apparent that competencyenhancing or destroying innovations can occur not only at the firm level but also at the level of what analysts have called the industrial district (e.g., Marshall, 1923; Krugman, 1991) (Murmann, 2003, p. 63).

15 Knowledge Improved knowledge seen as one of the critical outcomes of clusters. Firms operating closely in shared geographic space improve extent and range of their communication. Thus share knowledge at a faster rate than would otherwise have been possible. This sharing of knowledge helps lower transaction costs. Referred to as cognitive coordination Source: Lorenzen & Foss, 2001

16 Spillovers Activities in which firms in cluster engage, result in the creation of externalities. This is considered the source of the spillovers. The most important spillovers on which scholars focus are: Increase in rate of innovation Related to increase in knowledge Improvement in firm-level productivity New business formation.

17 Cluster Assessment Criteria Each cluster selects itself by demonstrating : 1. A willingness to embrace new ideas and to put resources behind them 2. Clusters must have the potential to be internationally competitive 3. Employment potential and GDP contribution will be important but not determining factors 4. Clusters must have a critical mass of qualified firms 5. Selected clusters must have the potential to motivate other clusters by their success 6. The macro environment must not present insurmountable barriers to cluster success

18 Identifying a New Segment RESEARCH GUIDE Data Gathering Situation Analysis Market Size & Demand Distribution Chain Standards & Regulations Production Volumes Logistics Quality Requirements Profitability Cluster Maps Customer Surveys Competitive - Positioning

19 Role of Trust Confucius said to his disciple Lao Tzu: Three things are needed for good government. They are the sword, food and trust. If a ruler must give up one, let him give up the sword. And if something else, let him give up the food. Trust should be guarded to the end.

20 Information and Global Competitiveness PREPARED BY AINSWORTH RILEY AND PRESENTED BY JHENELLE MCINTYRE MAY 9, 2008 Jamaica Employers Federation Convention Sunset Jamaica Grande Resort & Spa Ocho Rios, St. Ann -Jamaica

21 Jamaica Exporters Association Export Centre and Business Information Point Services

22 Export Centre and Business Information Point OBJECTIVES: qto positively impact national export performance & competitiveness. VISION OF THE FIRM: qembrace competition and contribute to increasing the competitiveness of firms qto increase firm level competitiveness by providing a range of standardised basic and value added business information services. qidentify export/market opportunities qbuild a strong, vibrant product offering

23 Physical Infrastructure Client Friendly Reception Area Staff Office Business Centre Library/Resource Centre Meeting/Training Facility

24 Basic Services INFORMATION-BASED: $ Requirements for starting an export business $ Taxation issues $ Local trade statistics $ Export Opportunities

25 Value Added EC/BIP Services MARKET INTELLIGENCE: $ Price Information $ Buyer Information $ Demographic Data $ Import and Export Data on Goods by Country $ Market Opportunities $ Market Access Information

26 Value Added EC/BIP Services ACCESS TO OTHER JEA S SERVICES q Loan Schemes q Firm Level Diagnostics q IT Templates q Market Promotion q Meeting and Training Facilities