Body of Knowledge
Competitiveness
Anukul Tamprasirt
Courses Overview
• The Theory: Competitiveness
• The Implication:
Cluster Development Agents (CDA)
Development
Note: Competitiveness must be taken prior to CDA Development
Courses Overview
• The Theory: Competitiveness
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Why Competitiveness
Competitiveness Theory
Next Generation of Competitiveness Theory
Cluster
Courses Overview
• The Implication:
Cluster Development Agents (CDA)
Development
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CDA Competencies
Psychology & Motivation
Cluster Implementation Methodologies
Managing Cluster Initiatives
The Theory:
Competitiveness of The Nation
Course Overview
Course Objectives
• This competitiveness course was developed from
multidiscipline academic principles i.e. economic,
industrial development, management and etc.
This is a theoretical subject covers overall
concepts of modern management, Globalization
and New Economy, Competitiveness concepts
and
theoretical
models,
Cluster
for
Competitiveness, Social intervention and etc. This
course can be used for various objectives i.e.
Entrepreneurial
Development,
Social
and
Economic Policy Intervention, and etc. It consists
of 8 Modules by which can be taught using 45
Hours with 3 academic credits.
Modules
•
•
•
•
•
•
•
Module 1: Modern Management
Module 2: New Economy and Globalization
Module 3: Competitiveness Overview
Module 4: Competitiveness Concepts
Module 5: Competitiveness Theories
Module 6: Cluster for Competitiveness
Module 7: Other Consideration for
Competitiveness
• Module 8: Conclusion
Module 1: Modern Management
Module Objectives
•
This module covers the understanding of
Modern Management Concepts and their
Evolution i.e. Boston Matrix Model, DISC,
Balance Score Cards and etc. The
contents in this module consist of :
•
•
Modern Management Overview and History
Example of Modern Management and
Psychology Concepts
Modern Management
Overview and History
Modern Management Overview
• Modern Management
– Business Management
– Industrial Management
– HR Management
•
•
•
•
Strategy
Psychology
High Technology
Etc.
Worl
d
War
I
Evolution of
Management
Worl
d
War II
9/11
1900
2000
1964
Management Grid
1980
Five Force
1992
BSC
1911
Scientific
Management
1928
DISC
1961
Split Brain
1970
BCG Matrix
Competency
2005
Blue Ocean
1985
1995
The Value Chain
Whole Brain
1990
Dynamic Diamond
Decade of Brain
Industrial Economics
Examples of
Modern Management and
Psychology Concepts
Personal Behavior Model (DISC)
BCG Matrix Competency
Balanced Score Card (BSC)
Customer
Financial
Value Proposition
Learning &
Growth
Internal Biz
Process
BSC
BSC Strategy Mapping
Molecular Economy
•Nano
•Genomics
•Digital
The Future
Leap Frog Technology
Productivity Improvement
Knowledge Base
Paradigm Shift
“The Bottom Line”
Focusing On Strategy
BUSINESS UNITS
STRATEGY
EXECUTIVE TEAM
INFORMATION
TECHNOLOGY
HUMAN RESOURCES
BUDGETS AND CAPITAL
INVESTMENTS
Module 2: New Economy and
Globalization
Module Objectives
•
This module illustrates the impact of
globalization, new economy and the recent
development of information technologies and
other future trend other advanced
technologies impacting world economic
development. This module covers:
•
•
•
New Economy
Globalization
Information Technology Era and Future Trend
Learning from the “Guru”
Peter Drucker
•The most influential person in the modern
management
•Define knowledge base economy
“Guru” - “Charlatan” is too long.
New Economy
New Economy
•
•
•
•
Industrialization Era
Globalization
ICT Economy
Molecular Economy…..
Values in New Economy
From
• Tangible
 Low Cost
 Face to Face
 Mass Advertising
 Clock Time Communication
 Salesmanship
 Market share
 Maximum of Sale Volume
 Transaction
 Output
To
• Intangible
 Solution Provider
 Screen to Screen
 Target Advertising
 Real Time Communication
 Corporate Ambassador
 Mind Share
 Maximum of Access
 Relation
 Outcome
Globalization
“Globalization”
Steroids
In Forming
The World Is Flat
In sourcing
Supply Chain
Off Shoring
Outsourcing
Uploading
Work Flow Software
Internet and Web Brower
PC and Window
1991
1990
Evolution and Influencing power of ICT -> Flatted World
The Emergence of New Economy
• Mass manufacturing Competition is Over
• Value of intangible assets
• Soft infrastructure critical
• Focus on activities not
industries
Creative Economy Demand Knowledge, Innovation
Information Technology Era
and Future Trends
“The Paradigm Shift”
Paradigm Shift (e-everything)
Intelligent
(Info-Mobility)
Info auto-mobility
Location Based Services (LBS) and payment systems
Positioning
Travel/traffic information services
Fleet Management information services
Integrated safety Management
Intelligent management of road, rail, maritime & air
transport-people and cargo
Intermodality, interoperability
From the Luxury to Necessity
•
•
•
•
•
Productivity Grain
Efficiency Development
Business Necessary
Life Style
Live Dependency
Digital Life
Source: IT Industry – New Growth Engine: Digital Contents Industry Promotion Policy, MIC, Korea
Module 3: Competitiveness
Overview
Module Objectives
•
In this module explains the essential of
world competition and the necessary of
new world economic impacted by
innovation and recent technologies
discovery. This module consists:
•
•
•
Principle of Economic
Why Competitiveness is necessary?
What is Competitiveness?
Principle of Economic
New Industrial Economic
Components Of The Macro Environment
Demographic
Economic
Industry
Environment
Global
Political/
Legal
Competitive
Environment
Technological
Sociocultural
National Business Environment
Why Competitiveness is
necessary?
Productivity and Growth of
The Nation
Integration of Macro- and
Microeconomic Reforms
What is Competitiveness?
Sustainability of The Nation
Relative Performance
New Paradigm of Globalization
Competition
Market Demand
New!!
Global Floor
Vertical/Specific/
Innovation
“ISO” Ceiling
Low Cost,
Low Value
Trap
Labor
Intensive
Supply
Global Competitiveness
Global Technology Mapping
American:
technology—just like its foreign policy, domestic politics, and popular culture—has
been swept up into what President George W. Bush calls “the global war on terror.”
The U.S. R&D establishment has narrowed its interests in the years since
September 11, 2001, concentrating its resources on technologies that provide
security: weapons systems, defenses against biological weapons, biometrics,
network security. The U.S. government’s research-and-development budget is now
bluntly militaristic. In fiscal year 2005, federal R&D spending rose 4.8 percent to
$132.2 billion, but 80 percent of that increase went to defense research. And most
of that increase is committed to the development of new weaponry, like the ballistic-missile defense system. In all, the government will spend 57 percent of its
R&D budget for 2005, or a record $75 billion, on defense-related projects.
President Bush’s proposed 2006 budget, now being debated in Congress, would
introduce cuts to many civilian programs but spend an additional $600 million on
defense research.
The Department of Homeland Security is particularly flush: its 2005 R&D budget
increased 20 percent from the previous year. In 2005, the new Homeland Security
Advanced Research Projects Agency (HSARPA) received $300 million. But the
administration plans to give the agency an extraordinary $1 billion in 2006.
HSARPA is concentrating on late-stage technologies that the government could
procure in only three to five years. But according to Lita Nelsen, director of MIT’s
Technology Licensing Office, such a near-term focus is “robbing from the future,
because that’s not basic, curiosity-driven research.” The data support Nelsen’s
contention. The National Science Foundation had its 2005 R&D budget cut by .3
percent in 2005, and the National Institutes of Health (NIH) enjoyed a budget
increase of only 1.8 percent. It will get worse: the government plans to increase
NIH’s budget by only .7 percent in 2006.
American:
The U.S. government’s preoccupation with security would be less important if the private sector were
investing in basic research. It is not: for years, corporate R&D has stressed return on investment
through the timely creation of new products. And U.S. venture capitalists have responded to government
and corporate demand by disproportionately funding security-related startups. Since 2000, according to
Venture Economics, communications funding has dropped 83 percent, and software investment is
down 77 percent; but during the same period, defense investment fell only 58 percent. Fields like
robotics, nanotechnology, and genomic medicine are underfunded. Venture capitalists have a
“lemminglike instinct when it comes to investment themes,” admits Bill Kaiser, a general partner at
Greylock Partners in Waltham, MA.
The U.S. obsession with security may yet yield wondrous technologies; it has happened before. “Uncle
Sam might be investing in the next Internet,” Nelsen says. Ken Morse, managing director of the MIT
Entrepreneurship Center, insists that security investment “is a good thing.” After all, he says, “thoughtful
government funding years ago has spawned cool companies.” Recent funding of defense and security
has already produced technologies for civilian use. Lincoln Laboratory, a research institution at MIT that
works mainly with the Department of Defense, has created several interesting “dual use” technologies.
Using luminescent proteins produced by a jellyfish gene, for instance, the lab has developed a
biosensor that glows in the presence of biowarfare agents. In 2003, the device, known as Canary
(which stands for “cellular analysis and notification of antigen risks and yields”), was licensed to
Innovative Biosensors in College Park, MD. The company believes it may be useful for medical
diagnosis, too. But technologists worried about the future of innovation in the United States may share
Nelsen’s gloomy assessment. “Everyone is frightened that some Iraqi is going to put anthrax in our
hamburger meat,” driving up spending on defense and security, she says. “But in the meantime, what’s
happening to the other technologies?”
Brazil:
The two top priorities are to reduce dependence on imported energy sources and to
bring digital technologies to the vast majority of the country’s 180 million people who
cannot now afford them.
In energy, the center of the greatest activity is biodiesel, a fuel made from the oil of
seeds such as soybeans, castor beans, and cottonseed. Biodiesel could become an
attractive, domestically produced alternative to petroleum-based fuels. Brazil has
enacted a law requiring diesel oil sold in the country to be 2 percent biodiesel by
2008 and 5 percent biodiesel by 2013. Because the country has huge amounts of
land that is unsuited for food crops but that can easily grow oil seeds, “Brazil can
become a global biodiesel power,” says Maria das Graças Foster, secretary of oil,
gas, and renewable energy at the Ministry of Mines and Energy.The consequences
could be considerable. Brazil now imports 15 percent of the 37 billion liters of diesel
it consumes annually. Large-scale use of biodiesel fuels would allow it to all but
discontinue those imports and would create jobs in needy farming communities.
There are also significant environmental benefits: substituting biodiesel for
petroleum-based fuels reduces emissions of unburned hydrocarbons, carbon
monoxide, sulfates, sulfur, and other pollutants.Another alternative fuel that could
help Brazil reduce its oil dependence is ethanol from sugarcane. A study conducted
by Roberto Giannetti da Fonseca, a specialist in foreign trade, found that Brazil is
the largest producer of fuel ethanol in the world, with an export potential of up to 10
billion liters per year for about $2 billion in revenue. Because of its extensive use of
ethanol fuel, Brazil has developed the flex-fuel car, which features a combustion
engine that can burn ethanol, gasoline, or any combination of both. Volkswagen
introduced the car in Brazil in March 2003. Last year, sales of new flex-fuel or
ethanol vehicles amounted to 26 percent of overall car sales.
Brazil:
According to Booz Allen estimates, that fraction could rise to 40 percent within the next two years, and Brazil
could begin to export the flex-fuel technology. “Thanks to this technology, Brazil will be dependent on neither oil
nor ethanol,” says Fernando Reinach, executive director of Votorantim Novos Negócios, the venture capital
subsidiary of the Votorantimi Group, a major Brazilian industrial conglomerate.While reducing energy dependence
will help the Brazilian economy in the long run, another technological initiative is starting to have more-immediate
consequences. Only about 12 percent of Brazilians own PCs. The last few years have seen a number of projects
designed to make computer technology accessible to large numbers of Brazilians for whom it was previously
unaffordable. The Committee for Democracy in Information Technology (CDI), for example, collects PCs in good
working condition that businesses have discarded as obsolete and ships them to information-technology training
centers. More than 900 schools in Brazil and abroad have benefited from this program.In 2001, a new project was
born, one intended to provide Brazilians who don’t own PCs with a sort of virtual machine—as long as they have
access to a publicly shared computer terminal.The project is called Computador de R$1.00, or Computers for 1
Real—the equivalent of about 40 cents. That’s the price of a recordable CD that stores personal data and settings
that customize the appearance of a computer screen. The user simply inserts the disc into the CD drive of a
computer at a school, a public library, or even a shopping mall. The system reads the disc and presents a
personalized computing environment, complete with application software and access to additional content over
the Internet. The system is already in place in pilot form in community centers and schools in cities such as São
Paulo, Brasília, and Campinas; hundreds of Brazilian schools will soon begin offering system discs to their
students. Project collaborators include Siemens, T-Systems, Brasil Telecom, Brasília University, publisher Editora
Abril, and Brazilian infotech firm Samurai.One application of information technology in which Brazil is taking a
leading role is voting machines. In Brazil’s 2000 local elections, for the first time, all 5,559 of its municipal districts
offered voters the chance to cast their ballots electronically. Most polling places used a simple, portable electronic
voting machine. To boost confidence in the system’s reliability, Brazilian law guarantees that all political parties
can examine the machine’s software before the election, says Paulo César Bhering Camarão, information technology secretary of the Supreme Electoral Court. A digital signature extracted from the software can then be used
to verify that the program used on election day is the same one examined previously.
Chilli:
How can a small South American country compete economically with nations that
invest 10 to 20 times as much in research and development? Chile’s strategy is to
search for solutions for local needs that have not been addressed overseas. In
particular, universities, private companies, and the government are working together
to develop new biotech applications for industries vital to Chile’s economy.
Take mining. Chile is the world’s largest producer of copper, and copper accounts for
about half of the country’s exports. But it is becoming more and more difficult to find
high-grade deposits that are cheaply and easily mined. The government has therefore
encouraged a partnership between the state-owned mining corporation Codelco and
Japan’s Nippon Mining and Metals. A joint venture between these two organizations,
called Biosigma, is developing the use of bacteria to extract copper from ore. This
approach, known as biomining, is less expensive and less environmentally
destructive than conventional processes. “We are one of the first companies totally
specialized in the development and application of genomics for mining,” says Ricardo
Badilla, CEO of the Santiago-based company.
For years, Chilean copper miners have used microbes to extract copper and other
metals from low-grade mineral concentrates. The organism most commonly used is a
bacterium called Acidithiobacillus ferrooxidans, which breaks the bonds between
copper and sulfur. But researchers at Biosigma isolated a new set of bacteria that
work better than this old standby. The company sequenced the bacteria’s genomes
and applied for patents on some of the genes it found. (Biosigma has not disclosed
the identity of the bacteria.) The process looks so promising that this year Biosigma
will receive an additional $16 million from its parent companies to continue
operations. Biosigma plans to field-test the new bacteria by year’s end.
Chilli:
“We hope to achieve a two- to threefold increase in Codelco copper reserves,” says Badilla. Such an expansion
would have an impact throughout the global market, because Codelco owns about 20 percent of the world’s total
copper reserves.
Another successful public-private partnership has delivered a biotech innovation that reaches not into the earth
but into the water. The Chilean salmon industry—ranked second only to Norway’s—is threatened by a bacterium
that grows within salmon liver cells, killing off massive numbers of fish in salmon farms and costing the industry as
much as $150 million a year. Because this microbe—Piscirickettsia salmonis—does not cause nearly as much
damage in the Northern Hemisphere, Chilean researchers and entrepreneurs had to find a way to combat it on
their own.
The work was coördinated by Pablo Valenzuela, the senior research officer at the Millennium Institute of
Fundamental and Applied Biology in Santiago. Valenzuela and his team sequenced all the salmon-killing
microörganism’s genes, which allowed them to identify those genes responsible for the infection. Those genes
were then used as the basis for a set of five vaccines, which were successfully tested at fish farms. The most
effective vaccine was licensed to Novartis Animal Vaccines. Valenzuela estimates the potential market for the
vaccine at around $50 million per year, while annual research costs were only about $1 million.
The abyss that currently yawns between university researchers and the needs of industry is considered one of the
main constraints on innovation in Chile, as well as in other Latin American nations. Valenzuela has proposed a
strategy for encouraging biotech development in five industries that are of particular importance to Chile: mining,
aquaculture, forestry, wine, and fruit. “The idea of this plan,” Valenzuela explained in a recent paper, “is to position
Chilean biotechnology under the umbrella of successful industries, similarly to what happened in the United
States with health-related biotechnology organizations initially employed by pharmaceutical companies.”
Biotech could also aid Chile’s wine industry, which has experienced explosive growth in recent years. Nicolas
Beltran, a researcher at the University of Chile in Santiago, has worked with winemakers to develop a system that
uses a standard chemical sensor—an “electronic nose”—and an artificial neural network to certify the quality,
purity, and origin of wines. The system can be “trained” to distinguish between cabernet sauvignon, merlot, and
chardonnay. Beltran is now working to give the system the ability to recognize the valleys where the grapes were
cultivated in order to certify their denomination of origin.
Nertherlands:
December’s deadly tsunami in the Indian Ocean drove home how vulnerable low coastal
areas are to the forces of nature. In the Netherlands, which carved itself out of the ocean
centuries ago—and a quarter of whose land mass is below sea level, while two-thirds is
vulnerable to flooding—the mastery of coastal waters remains the object of much
technological innovation.
The Dutch acquired their hydraulic expertise partly in response to disaster. In 1953, a number
of sea dikes in the southwestern part of the country gave way under a tidal surge. The
disaster, which killed about 1,800 people, spurred one of the largest hydraulic projects in the
country’s history: the Delta Works. Almost all of the inlets and estuaries in the southwestern
part of the country were closed off by a system of dams and storm surge barriers. One of the
two main arteries remaining open—the estuary near Rotterdam—was fitted with the most
massive movable storm surge barrier ever built. Known as the Maeslant Barrier, it has an
automated control system that closes its giant doors based on real-time weather information,
which can indicate the approach of a spring tide. The system’s software borrows from a
branch of mathematics called formal methods; its performance is continually monitored, and
improvements are made as knowledge of weather behavior progresses.
Were Holland’s dikes, dams, and pumping stations ever to fail again as they did in 1953, a
densely populated, 150-by-150-kilometer area would suffer from a catastrophic flood. Bas
Jonkman, a civil engineer with the Dutch Ministry of Transport, Public Works, and Water
Management, and Nathalie Asselman, a researcher with Delft Hydraulics, recently simulated
a dike breach near the Dutch town of Capelle aan den IJssel. According to their simulation, in
the worst-case scenario, the water in the village could rise five or six meters in a matter of
hours, killing about 72,000 people.
To help prevent such tragedies, the Netherlands has computerized most every aspect of sea
defense management. Institutions such as Delft University of Technology, UNESCO-IHE Institute for Water Education, WL/Delft Hydraulics, and the technology development
consultancy TNO run computer models that simulate the reaction of water and sediments to
human interference. Those simulations are used to estimate the effects of such megaprojects
as building an airport on an artificial island in the North Sea or creating thousands of acres of
new land near the coast—indeed, for almost any civil-engineering project.
Nertherlands:
Weather and climate systems, like shifting sediments and the currents of rivers and seas, are impossible to
describe accurately using linear models. Research by Dutch mathematicians on nonlinear systems has produced
computer models of these phenomena that are of vital importance to the country’s survival. Thanks to these
models, the pumping stations that keep the Dutch lowlands from flooding can anticipate prolonged rain spells, and
mechanical storm-surge barriers can be closed in time when massive storms approach.
Dutch engineering has focused on not just controlling the flow of water but also keeping it clean. The drinkingwater chain in the Netherlands is a fully closed system: sewage water is treated so that it can be safely discharged
into surface water. The purification of drinking water has recently come to rely on new, environmentally friendly
techniques: using ultramembranes and ultraviolet light to kill bacteria. Ultramembranes, with pores so fine that they
can physically screen individual cells, have gained wide adoption over the past five to 10 years. Ultraviolet
technology developed by Dutch engineering companies such as DHV is commonly used in the “after-disinfection”
stage of water treatment, as a second level of defense. However, the Dutch water company PWN has begun
employing UV light during the entire disinfection process. PWN’s technique uses a photochemical process to
create powerful oxidizers, which break down organic compounds so that they can be consumed by aerobic
bacteria that reside in active carbon filters. According to Peer Kamp, head of innovation at PWN, the next
challenge will be the removal of all traces of pharmaceutical drugs from water.
Dairy and meat products, along with flowers, make up 20 percent of Dutch exports. And the agricultural and foodprocessing industries are becoming more entwined with the pharmaceutical industry. A few years ago, for
example, the Dutch-British firm Unilever launched the product line Becel pro.activ (marketed in other countries
under the name Flora), which helps people control their cholesterol. Ultimately, such “functional foods” could help
to prevent heart disease and perhaps diabetes. Dutch technology, here as in its massive feats of environmental
engineering, aims to keep people safe.
Germany:
A century ago, with its world-leading chemical industry and its cadre of top physicists,
Germany was widely considered a technological heavyweight. But it has now fallen behind
in many areas of emerging technology. The German biotech industry, for example, started
much too late (it hardly existed until the mid-1990s) and is still trying to make up ground.
And while German universities are doing excellent research on nanotechnology, many
worry that the country will not turn that basic science into products.
Germany’s greatest strength is its automobile industry. In the years to come, many
emerging technologies, from optical communication links to nanotech materials, will find
their way into cars. Technological innovation will be critical to creating the opportunities that
will lead German carmakers and their suppliers out of their current trouble. In particular,
German carmakers are betting on computer-based assistance systems that could make
driving safer and more comfortable.
The basic idea is that a car would map information from a variety of sensors, like cameras
and radars, into a digital model of the surrounding traffic conditions. In case of danger, the
system would issue a warning to the driver. In more-advanced systems, vehicles could use
wireless communications to inform each other in real time about oil puddles, traffic jams, or
accidents. BMW is working on wireless networks for cars that will automatically set up
connections among vehicles in order to exchange critical sensor information; a car that
detects a slippery stretch of pavement, for instance, could relay that information to other
cars on the same road. The goal is to create networks of intercommunicating cars that
could someday form a sort of automotive Internet. Researchers at the University of
Stuttgart, in collaboration with DaimlerChrysler and other German carmakers, are also
designing and testing systems to assist drivers at intersections. Such systems might
combine information from traffic lights or signs with onboard-sensor data about other
vehicles and their speed or distance in order to get the drivers safely across.
Germany:
Although they have introduced prototypes of hybrid gasoline-electric vehicles, carmakers in Germany
are betting on the longer-term vision of fuel cell cars that consume hydrogen. DaimlerChrysler, for
example, has said it will bring such vehicles to the market by 2010. And in what has the makings of a
startling turnaround, the demand for hydrogen that would result could help bring about a nuclear
renaissance in Germany. In the late 1990s, after massive antinuclear protests, the government coalition
of Social Democrats and Greens decided to shut down Germany’s nuclear power plants by 2020. The
country committed itself instead to developing renewable energy sources such as wind and solar
power.
But whether renewable energy sources can ever contribute sufficiently to German energy production is
much debated—hence the reëmergence of the nuclear option. Developers of so-called third-generation
nuclear plants claim that their technology is much less risky. The European pressurized-water reactor,
for instance, developed by Siemens and the French company Framatome, has various safety
features—such as double-wall containment—that by limiting the release of radioactivity are supposed to
make a catastrophic core meltdown much more manageable. Given the availability of such improved
reactor technologies, Germans might possibly change their minds about nuclear energy. Though the
coalition now in power remains adamantly opposed to it, the Christian Democratic Party has announced
that if it regains power—not an unlikely prospect—it will rethink the country’s policy on nuclear energy.
Looking further ahead, German researchers are doing world-class basic science in fields ranging from
materials science to biomedicine. German neuroscientists have made important contributions to
research in brain implants and in noninvasive brain-machine interfaces. But neurotechnology brings with
it tricky ethical dilemmas. One concern is that the findings of brain science will undermine our notion of
autonomy and individual responsibility. In wrestling with these issues, neuroscientists in Germany and
elsewhere must reconcile the powers of new technology with the concepts of consciousness and free
will. But that’s a task that may very well suit the country that gave the world Immanuel Kant.
South Africa:
has a language problem. Its 46 million people speak 11 official tongues. Enter the Human
Language Technology (HLT) unit at the Council for Scientific and Industrial Research
(CSIR) in Pretoria—one of the largest R&D, technology, and innovation institutions in
Africa.
HLT researchers are developing innovative ways to give more people, from diverse
backgrounds, access to knowledge. “In dealing with South African needs, we have to
take into account the level of literacy of users, their technical sophistication, and cultural
factors,” says Marelie Davel, the computer scientist who coheads the HLT research
group.
One of the HLT unit’s biggest success stories is a highly efficient system for the creation
of pronunciation dictionaries. Davel explains that the system has been tested on a
number of South African languages, including isiZulu, Setswana, Afrikaans, and Sepedi.
Researchers have also developed a speech synthesis system for isiZulu, which is the
first language of more South Africans—24 percent—than any other. The system, which
is now being tested, enables people with only a reading knowledge of isiZulu to
communicate orally with native speakers.
South Africa’s other major area of innovation involves communication of another sort: the
collaborative process that is the heart of the open-source-software movement. More than
80 percent of the country’s six-billion-rand (about $1 billion) annual spending on software
and licensing goes to foreign companies, according to the Shuttleworth Foundation’s Go
Open Source campaign. This reliance on proprietary hardware and software hinders the
development of South Africans’ information technology skills and closes off opportunities
for economic growth.
South Africa:
Open-source software brings with it the tools that are essential to South Africa’s capacity to produce
original software and create new local markets and opportunities. It also expands access to computing
among a previously disadvantaged populace, since open-source operating systems often run smoothly on
older machines that would crawl under the strain of the latest version of Windows. Without open-source
products, many African children would have little opportunity to use computers, because proprietary
systems are simply beyond the means of most schools.
One organization leading South Africa’s open-source renaissance is Go Open Source, funded by
billionaire South African businessman and space tourist Mark Shuttleworth. Go Open Source has
distributed free CDs containing open-source software and a local Linux distribution called Ubuntu (a Bantu
word meaning “humanity to others”). The South African company Canonical offers support for Ubuntu
Linux as well as a translation utility aimed at addressing the problem of accessibility. (Try persuading a big
proprietary developer that it’s worth its while to develop software for speakers of Sotho or Xhosa.)
South Africa’s first entirely homegrown Linux distribution has come out of the Impi Linux project. Named
after the warriors of the Zulu tribe, Impi Linux 2 was built from scratch by a team of Linux user groups with
the backing of local software firm Cubit and guidance from Ross Addis, chair of the Gauteng Linux Users
Group. “Developers from other countries either don’t know or don’t care about South African needs,” Addis
says. He cites the rapid adaptation (about two weeks) of Impi Linux 2 so that it included support for local
firm Sentech’s broadband “My Wireless” service.
The Free and Open Source Software Foundation for Africa estimates Africa’s IT industry to be worth $25
billion. There is a growing sense that ceding such wealth to Western companies squanders an opportunity
to tap the country’s indigenous software-development talent. Open source offers Africa the opportunity to
become a continent of developers rather than consumers of Western IT products. It could offer ordinary
South Africans unrestricted access to an array of applications that will enable them to build up their own
businesses, educate their children, and develop the IT skills that will let South Africa run on the
technology road with the rest of the world.
China:
Some of the world’s most polluted cities are in China, so it’s no surprise that clean energy
sources are one of the country’s research-and-development priorities.
The Solar Energy Institute at Shanghai Jiaotong University, for instance, has built a onestory, 245-square-meter prototype house that relies on multiple forms of renewable energy,
supplemented with energy from conventional sources. The house’s power system includes
an array of photovoltaic cells that generates 1,700 watts of electricity under peak sunlight
conditions, and three sets of 300-watt wind turbines. The system can generate about 3,000
kilowatt-hours of electrical power each year, mainly for lighting, household electrical
appliances, and water pumps. Outside the house stands a street lamp with its own
independent solar-power system. Twenty square meters of solar-energy panels and 2,000watt terrestrial heat pumps provide heat for both the rooms of the house and the water
supply. Twenty people a day can bathe in summer, or 10 in winter, and still leave enough hot
water for routine use. The same heat pumps work in reverse during the summer to cool
about one-quarter of the house, an area of 60 square meters. Based on the average amount
of annual sunlight in Shanghai, the system could provide 10,700 kilowatt-hours of heat per
year. The goal is for the house to draw 70 percent of its needed energy from the sun. Solarenergy collecting tube invented by a professor at Tsinghua University could make solar
power more practical. The glass vacuum heat collector has an aluminum nitride coating that
absorbs solar energy. Each of the coating’s multiple layers absorbs a different wavelength of
light, turning it into heat. The collector can capture 50 to 60 percent of incoming solar energy,
which can then be used to heat water or air. Tsinghua has applied for more than 30 patents
on the device, which is already offered commercially in China, Switzerland, Japan, and
Germany.
In another energy efficiency project, the research group for clean-energy automobiles at the
College of Automotive Engineering at Shanghai Tongji University is developing what it calls
the “Chunhui” (or “Spring Sunlight”) series of cars, which have independent electric drives for
each of their four wheels. The Chunhui cars are powered by lithium batteries and hydrogen
fuel cells; their only emission is water vapor.
China:
In another energy efficiency project, the research group for clean-energy automobiles at the College of Automotive Engineering at Shanghai Tongji University is developing what it calls the “Chunhui” (or “Spring
Sunlight”) series of cars, which have independent electric drives for each of their four wheels. The Chunhui cars
are powered by lithium batteries and hydrogen fuel cells; their only emission is water vapor.
Another problem that afflicted China in recent years was the outbreak of severe acute respiratory syndrome, or
SARS. Here, too, researchers are making significant strides. In December, the Chinese Academy of Medical
Sciences and Chinese biotech company Sinovac successfully completed a first-stage clinical study of a SARS
vaccine. Researchers at the academy developed a protein chip to detect antibodies against the SARS virus,
established the analytical techniques for the SARS serum mass-spectrum fingerprint, and developed the
enzyme-linked immunosorbent assay (ELISA) test kit for SARS diagnosis, which can be more than 90 percent
accurate if used more than 10 days after the first symptoms appear.
China’s reputation in electronics is that of a low-cost manufacturer of products designed and developed in other
countries. It’s starting to shed that reputation, though. Last year, the Chinese Academy of Sciences unveiled the
Dawning 4000A, a supercomputer that performs more than 10 trillion operations per second and at the time
ranked 10th on the list of the highest-performance computers in the world. The machine is intended to provide
information-processing services for research organizations, manufacturers, and commercial enterprises
throughout China.
Chinese researchers have also attacked what has been one of the most significant gaps in the country’s
technology portfolio: the lack of a homegrown computer chip. In 2002, the Chinese Academy of Sciences
announced the development of the “Godson” series of CPU chips, marking a new beginning for the Chinese
information technology industry. With Godson, the country finally owns its own processors, on which it owes no
royalties and which can be tailored to better meet local needs. Finally, after years as a manufacturing colony,
China can start to achieve computing independence.
Measuring Global Technology
• Economically advanced European and North
American countries may leap to mind as global
technology leaders. By and large, that’s the
case. These countries tend to fare particularly
well on such measures as Internet usage,
technology spending per person, and cost of
Internet access. Economically developing
countries are relatively well represented when it
comes to significant mobile-phone and Internet
use as well as, increasingly, the production of
genetically modified crops.
Module 4: Competitiveness
Concepts
Module Objectives
•
This module illustrates the
understanding of the strategic thinking
and how strategic thinking can be
developed into the national
competitiveness. The details in this are:
•
•
•
Strategic Thinking
Competitiveness Definition and basic
Concepts
Competitiveness Measurement
Strategic Thinking
Competitiveness is about
“Strategies”
Measuring The Strategies
Competitiveness Definition
and basic Concepts
Competitiveness Definitions
• Competitiveness is determined by the productivity with
which a nation uses its human, capital, and natural
resources. Productivity sets a nation’s or region’s standard
of living (wages, returns to capital, returns to natural
resource endowments)
– Productivity depends both on the value of products and services
(e.g. uniqueness, quality) as well as the efficiency with which they
are produced
– It is not what industries a nation competes in that matters for
prosperity, but how firms compete in those industries
– Productivity in a nation is a reflection of what both domestic and
foreign firms choose to do in that location. The location of
ownership is secondary for national prosperity
– The productivity of “local” industries is of fundamental importance
to competitiveness, not just that of traded industries
– Devaluation does not make a country more competitive
Michael E. Porter
Competitiveness Is NOT…
•
•
•
•
Abundant Natural Resources
Cheap Labor
Cheaper Currency
Better Government “Incentives”
Competitiveness Is…
Intersection of Public Policy and
Commercial Strategy
Competitiveness Is…
Strategy BEFORE Policy
PUBLIC
PRIVATE
RESTRUCTURE
REPOSITION
Competitiveness Is…
Pursuing Effective Dialogue
INEFFECTIVE
EFFECTIVE
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Individual Company
Ad-hoc Complaints
Operational Level
Laundry Lists
Anecdotal Evidence
Concessions
Opposite Sides
Industry Clusters
Comprehensive Vision
Strategy
Priorities
Data and Analysis
Co-Responsibility
Same Side of Table
Mind Set
• “the ‘state-centred left’ which thinks government
can solve every problem”
• “the ‘market-centred right’ which believes in the
social power of the ‘invisible hand’”
• the “‘technocratic centre’ where faith resides in
experts”
• “talk show democracy” whose politics of
criticism and self-righteousness distorts public
discussion, confounding democracy with
demagoguery”.
Competitiveness
• Can US compete with Japan in
manufacturing era?
• Mass Manufacturing Competition Strategy
• “Niche” Globalization
• Sustainability Growth
Competitiveness Measurement
Competitiveness Measurement
•
•
•
•
World Economic Forum (WEF) Indicators
4 Categories
20 Measurements
World Ranking
Competitiveness Evaluation
Competitiveness Cube
Understanding Competitiveness
Competitiveness Measurement
Competitiveness Indexes
Competitiveness Ranking
Module 5: Competitiveness
Theories
Module Objectives
•
The content in this module covers the
world renowned competitiveness
theories and the concepts behind these
major competitiveness contributions. It is
consists of the following details:
•
•
Competitiveness Theory Models (Basic) i.e. 5
Force Model, Diamond Model and others
Competitiveness Analysis Theory (Meso
Model)
Competitiveness Theory
Models (Basic)
Basic Theory
Michael E. Porter
The Competitive Advantage of Nations, 1990 presents a new
theory of how nations and regions compete and their sources of
economic prosperity. Motivated by his appointment by
President Ronald Reagan to the President's Commission on
Industrial Competitiveness, the book has guided economic
policy in countless nations and regions. Subsequent articles
have expanded on the concept of clusters (geographic
concentrations of related industries that occur in particular
fields) and other aspects of the theory.
Porter’s Five Forces Model
Threat of New Entry
Bargaining Power
of Suppliers
• Differentiation of inputs
• Switching costs
• Presence of substitute
inputs
• Supplier concentration
• Importance of volume to
supplier
• Cost relative to total
purchases
• Impact of inputs on cost or
differentiation
• Threat of forward
integration
• Economies of scale
• Proprietary product
differences
• Brand identity
• Switching costs
•
•
•
•
•
Capital requirements
Access to distribution
Absolute cost advantages
Government policy
Expected retaliation
Rivalry Among
Existing Competitors
• Industry growth
• Fixed costs / value
added
• Overcapacity
• Product differences
• Brand identity
•
•
•
•
•
•
Switching costs
Concentration and balance
Informational complexity
Diversity of competitors
Corporate stakes
Exit barriers
Threat of Substitutes
• Relative price performance of substitutes
• Switching costs
• Buyer propensity to substitute
Source: Michael E. Porter, Competitive Advantage (New York: Free Press, 1985)
Bargaining Power
of Customers
•
•
•
•
•
•
•
•
•
•
•
Buyer concentration
Buyer volume
Buyer switching costs
Buyer information
Ability to integrate
backward
Substitute products
Price / total purchases
Product differences
Brand identity
Impact of quality /
performance
Buyer profits
Revival
The Five Competitive Forces
Force
Entry
Erecting barriers (isolating
mechanisms) create exploit economies of scale,
aggressive deterrence, design in switching costs, etc.
Rivalry
Compete on nonprice dimensions:
cost leadership, differentiation, cooperation, etc.
Substitutes
Buyers
Improve attractiveness compared to
substitutes: better service, more features, etc..
Reduce buyer uniqueness: forward
integrate, differentiate product, new customers, etc..
Suppliers
Reduce supplier uniqueness: backward
integrate, obtain minority position, second source, etc..
Competiveness
Diamond Model
Porter’s Diamond Model
Diamond Model
Cluster
Stages of Competitiveness
Development
Coopetition and the Value Net
A player is your competitor with
respect to customers if customers
value your product less when they
have the other player’s product as
well
Competitors
A player is your competitor with
respect to suppliers if it is less
attractive for a supplier to provide
resources to you when it is also
supplying the other player
Customers
Firm
Suppliers
A player is your complementor
with respect to customers if
customers value your product more
when they have the other player’s
product as well
Complementors
A player is your complementor
with respect to suppliers if it is
more attractive for a supplier to
provide resources to you when it
is also supplying the other player
Source: Adam Brandenburger and Barry Nalebuff, Co-operation (New York: Currency Doubleday, 1996)
The Collaborative
Competitiveness Development
Productivity and the Microeconomic
Business Environment
1st of Competitiveness
• Studied from 10 Leading Industrial
Countries
• Based on Well Developed Industrial
Standards
• Focus on New Paradigm
The Original Eight Questions
•
•
•
•
•
•
•
•
How wired is your country?
How fast is your country?
Is your country harvesting it’s knowledge?
How much does your country weigh?
Does your country dare to be open?
How good is your country at making friends?
Does your country’s management get it?
How good is your country’s brand?
Friedman’s “Eight Habits of Highly Effective Countries”
Competitiveness Analysis Theory
(Meso Model)
The Next Generation
The Need to Upgrade
Competitiveness Model
• Partial Appropriate
(only for Developed Industrial Countries)
• Misbalance of Contributing Factors
• Incomplete Analysis of Contributing
Factors.
• Misleading Competitiveness Measurement
Michael J Enright
Michael J Enright is a leading expert on competitiveness,
regional economic development, and international business
strategy. Enright joined the University of Hong Kong as Sun
Hung Kai Professor of Business Administration in 1996 after
six years as a professor at the Harvard Business School. He
also directs the Asia-Pacific Competitiveness Program at the
Hong Kong Institute of Economics and Business Strategy and
was a Founding Director and current Advisory Board
Member of The Competitiveness Institute (a global
professional body with members in 40 nations).
Enright’s Market Failures
•
•
•
•
Impacted Information
Managerial Myopia
Under-provision of public goods
Coordinate Failure
New Forces of Asian’s Economic
Enright 2006
Enright 2006
Enright 2006
Enright 2006
Enright 2006
The Sources Advantage of the Firms
Activities
Resources
Knowledge
Enright 2002
Questions of Contributing Factors
• Is R&D Advantage?
• Is “high tech” an Industry Advantage?
• Cheap Labor?
• Abundance Resources?
Competitiveness is…(NOW)
• Competitiveness is
– Innovation
– Strategic Management System Thinking
– Collaboration
– Financial tools
– Commercialization, etc.
Enright’s Meso Model
Next Generation of Competitiveness
Enright’s 5 Layers Analysis Model
Module 6: Cluster for Competitiveness
Module Objectives
•
In this module, this explains the concepts of
new value creation from “clustering”, life cycle,
the characteristic of “clusters” and etc. This
module consists of the following guidelines:
•
•
•
•
•
What is Clusters?
Can Cluster be induced?
Cluster Life Cycle
Cluster Characteristic
Cluster Configurations i.e. Cluster Mapping, Map of
Clusters and etc,
What is Clusters?
“Value Creation
Competition”
Cluster:
Competitiveness Strategy
• “Clustering is a survival evident of the
mass manufacturing competition”.
• It has been existing over a few decades.
• It is unique in each cluster.
• “Creativity” and Innovation are essential.
Michael E. Porter.
Can Cluster be induced?
Cluster: By Definition
• “A cluster is a geographically proximate
group of companies and associated
institutions in a particular field, linked by
commonalities and complementarities.“
Michael E. Porter.
Examples: Ceramic Tile Companies
and Suppliers in 30 KM. Radius
Western Australia
(Digital Content Clusters)
New Orleans - Entertainment Clusters
Øresund Science Region (13)
Medicon Valley Academy
Biotech
Medico
Bio +
IT
Øresund IT
Academy
ICT
ØSR
Food
Environment
Øresund Environment Academy
Øresund Food
Network
Pearl Delta City
Cluster: It is a matter of size
•
•
•
•
High Skill, Specialization, Nich
Large Number
Both “Quality” and “Quantity”
Key Success
– Competition Environment
– “New” for Survival
Can Cluster be induced?
And, cluster is not just an
alliance
Cluster Requirements
• A direct dialog with the cluster firms to better
understanding of the industry needs.
• Create awareness of existing support programs
to firms and associations in the industry.
• Designing tailor made support for the industry.
• Involving private sector in their financing and
management.
• Coordination within different Government
departments to support the industry.
Fostering The Clusters
-
STATISTICAL OBSERVATION
INDUSTRY STUDIES
FIRMS FORAE(Dialog)
+
CHANGE MANAGEMENT
Cluster Values
• Competitive strategy is about being
different.
• It deliberately chooses a different set
of activities to deliver a unique mix of
value
Michael E. Porter.
Cluster Strategy
• Organic Cluster Strategies
• Transplant Cluster Strategies
• Hybrid Strategies
Cluster Life Cycle
Enright 2006
Enright 2006
Cluster Life Cycle
Cluster Characteristic
Cluster Environment
Government
Companies
Institution For
Collaboration
-IFC
Financial
Research
Community Institutes
Cluster “Silo”
The Triple Helix
Etzkowitz(2002)
“Leap Frog”
Creativity and Innovation
“Leap Frog”
(Innovation)
•
•
•
•
Product Innovation
Process Innovation
Business Model Innovation
Breakthrough Innovation
Characteristic Needed for
Clustering
Easy Access to
Resources
Extreme Specialization
Flexibility and
Rapid Response
Limitated Facilitates
Information Spillovers
Faster Innovation Adopters
Cluster Configurations
Understanding the Difference
• Understanding the Value Chain
• “Innovation and Creativity” for
– Improvement
– Participation
• Understanding the Mandate for Voluntary
Collaboration.
The Myth
• Screening VS Profiling
• Statistic Analysis VS Holistic Approach
• Cluster Map VS Map of Cluster
CLUSTER MAPS
• 4 Components
– Core Cluster
– Supporting Industries
– Target Markets
– Institutional Supports
(Drivers, Facilitators)
Example: Transportation Cluster
Clusters must be evoluing by private and public influrencing actions
CLUSTER MAPS - SCOTLAND’S CREATIVE MEDIA INDUSTRIES CLUSTER
ENABLING TECHNOLOGIES
Film, TV, Radio &
Music Studios
Content Originators
Telecomms
Computing
IPR Commercialisers
Electronic, Digital
& Optical Media
Print Media
Distribution Channels
Internet & Online
Systems
Markets
Education
Multimedia Producers
Multimedia Distributors
Schools
Games Producers
Game Distributors
Retail Shops
Authors
Book Publishers
Film/TV/Radio Producers
TV/Radio Channels
Film Producers
Film Distributors
Journalists
Newspapers/Magazines
Musicians
Record Labels
Internet
Business
Designers
Advertising Agencies
Advertising Media
Visitor Attractions
Consumer Electronics
Readers
Libraries
TV/Radio Audiences
TV/Radio Broadcasts
Music Buyers
Filmgoers
Utilities/Public Sector
Cinemas
Professional
Services
Edutainment
Promotion &
Review
Patent Agents
Marketing
IPR Lawyers
Media
Accountants
Critics
Talent Agents
SAC
Universities Art & Music
Schools Industrial
& Colleges
R&D
UPGRADING & INNOVATIVE BODIES
Key to shading:
Relative strength
Industry
Bodies
Banks &
Financiers
Libraries & E-commerce
Museums
users
Education
Smart
Authorities
Cities
Government
(SO,DCMS)
OTHER CLUSTER PARTNERS
Broadly on par
Relative Weakness
Scottish Enterprise: Creative Media Group Jan. 1999
Maps of Cluster
Map of Clusters
• Profiling the Concentration of “Clusters”
• After the facts
• Known Attributes for their “niche” and
expertise
Italy Clusters
USA Clusters
Cluster Map VS Map of Cluster
• Cluster Map is value chain representation
• Map of Cluster is Cluster Location
• Porter Never Recommend to develop Map
of Cluster
Module 7: Other Consideration
for Competitiveness
Module Objectives
•
“Cluster” is the basic concepts for
Competitiveness, however, there are some
other concerning issues needed to be
considered in order to use this effectively
particularly in the developing countries. This
module covers:
•
•
Continuing Studies and Movement in Cluster
Other Implications of Economic Development
–
–
Intellectual Capital
The need for competitiveness in Developing countries i.e.
Social Economy, Sufficiency Economy and etc.
Continuing Studies and
Movement in Cluster
Competitiveness 1.0: First steps
• Competitive Advantage of Nations
– Focus on Industry level competitiveness
– Focus on advanced industries
– Focus on microeconomics
• World Economic Forum
– Focus on national level competitiveness
– Multifactor analysis of competitiveness
– Data compilation and league tables
• Issues and problems
–
–
–
–
–
–
–
Implicit or explicit value judgments
Poor predictive power
Some nonsensical conclusions
Failure to relate systemic nature of competitiveness
Failure to link with pre-existing work
Lack of useful directions for policy
Overemphasis on “innovation”
Diamond Model
Cluster
Competitiveness 2.0: The cluster
“recipe”
• Steps
–
–
–
–
–
–
Identify the clusters and potential clusters in a region
Fund universities and research institutes
Facilitate interaction among cluster members
Encourage private sector participation
Create cluster and competitiveness organizations
Provide support for innovation
• Advantages
–
–
–
–
Intermediate level is useful for analysis and initiatives
Focus on interaction is very useful
Potential to create positive sum initiaves
Recognition of importance of private sector
• Problems
–
–
–
–
Everyone identifies the same clusters
Facilitation and participation are great, but to what end?
Often no specific idea of what the recipe is supposed to do
Each context is specific and must be taken into account
Enright’s 5 Layers Analysis Model
Competitiveness 3.0: The future
of competitiveness
• Integration of approaches
– Market/ private sector oriented approach
– Innovation systems approach
– Cluster approaches
• Understand different levels of aggregation
– Geographic
– Economic
– Need for an integrated approach
• A new view of clusters
– Different types of clusters
– New uses for cluster initiatives
– Tailored programs
• Focus on market failures
– Rationale for action
– Efficiency and effectiveness of investments
Dynamic Vs Static Clusters
The Chronology
• Competitiveness 1.0: First steps
–
–
–
–
Competitive Advantage of Nations
Focus on Industry level competitiveness
Focus on advanced industries
Focus on microeconomics
• Competitiveness 2.0: The cluster “recipe” Steps
–
–
–
–
–
–
Identify the clusters and potential clusters in a region
Fund universities and research institutes
Facilitate interaction among cluster members
Encourage private sector participation
Create cluster and competitiveness organizations
Provide support for innovation
• Competitiveness 3.0: The future of competitiveness
Integration of approaches
– Market/ private sector oriented approach
– Innovation systems approach
– Cluster approaches
Demand New Competitiveness
• Unprecedented pressure from all directions
– Competition and customers
– Regulators and shareholders
• Unprecedented opportunity for those that can
–
–
–
–
–
Use knowledge/ innovation/ creativity
Leverage international production systems
Plug into international information flows
Find new ways of meeting customer needs
Become world class in activities as well as industries
• Changing imperatives for firms and governments
– Different requirements
– Importance of being “plugged in”
– Competitiveness is more important than ever before
“Integration”
• Just Now Cover All
– Developed Industrial Countries and Developing
Countries
– Western and Eastern
– Porter VS Enright
• Rule Base VS Knowledge Base
• Repeatable?
Dynamism of Cluster
Rule Base
Knowledge Base
Other Implications of
Economic Development
Intellectual capital
Value
Intellectual capital= Human capital (<> people costs)+
Structural capital (what’s left when
people go home)+
Customer capital (mindshare, loyalty
, ideas)
Structure Capital Measurement
IC Structure
The Invisible Balance Sheet of
Morgan & Banks July 1997
Intangible Assets Monitor
Intellectual Capital
• In 1993 Leif Edvinsson combined the two
theories, the Konrad conceptual framework
and the Balanced Score Card (BSC).
• He applied a BSC presentation format to
the Konrad - theory and published it in a
supplement to Skandia’s Annual Report
• Using for the first time the word,
"Intellectual Capital", instead of the
accounting term "Intangible Assets".
(Edvinsson & Malone 1997)
Process Model
BSC in IC Model
 Market Value
• Balance Financial Capital with Intellectual Capital
 Financial Capital
• Balance Physical Capital with Monetary Capital
 Intellectual Capital
• Balance Human Capital with Structural Capital
 Structural Capital
• Balance Customer Capital with Organizational Capital
 Organizational Capital
• Balance Innovation Capital with Process Capital
 Innovation Capital
• Balance Intellectual Property with Intangible Asset
Skandia Model
Market
Value
Financial
Capital
Intellectual
Capital
Human
Capital
Structural
Capital
Customer
Capital
Organisational
Capital
Innovation
Capital
Intellectual
Property
Intangible
Assets
Process
Capital
“The best-known theorist of innovation
clusters is Michael Porter, but many other
theorists and practitioners have contributed
to the search for the right structure for
innovation in particular economic and
social contexts.”
Marceau (1994)
In distressed communities or rural
regions, infrastructure for innovation
is deficient.
“The knowledge economy and
the social economy”
Capitals and Mobility
“Social Economy”
• The techniques have to do with searching for
economic opportunities, organization of
community business corporations, training, and
provision of supportive aftercare services.
• The techniques can help to construct knowledge
systems that work in favour of peripheral
communities threatened by trade liberalization
and the decline of natural resource regions.
• The three components of community economic
regeneration are: finance, technology, and
learning.
Post Capitalist Society
(Drucker, 1993)
• The post capitalist polity needs a “third
sector”.
• The two generally recognized ones, the
“private sector” of business and the “public
sector” of government.
• It needs an autonomous social sector.
The “3rd sector”
• Conventionally includes professional
associations, charitable organizations, mutual
aid societies, special interest groups,
educational and health organizations in which
the institutional foundations of civil society
(families, schools, voluntary associations)
• Promote and sustain personal and civic
responsibility, balancing individual with social
rights and the responsibilities.
• Typically this centrism is non-political and very
community-oriented, placing its faith in active
local citizen involvement in problem solving.
Social Enterprise
MONDRAGÓN CORPORACIÓN COOPERATIVA (MCC).
The 7th largest Spanish conglomerate
José María Arizmendiarrieta
A young priest born in Marquina in the
province of Vizcaya, arrived in Mondragón in
1941. A highly pragmatic and hard-working
man, José María was to be the driving force
behind the Mondragón Co-operative
Experience, serving as an exemplary role
model for all co-operative members until his
death in 1976.
The Basic Structure of MCC
• From a business point of view, the MCC’s activities are
divided into three areas
• The Financial Area includes activities such as banking,
social welfare and insurance.
• The Industrial and Distribution which function
independently within a global strategy co-ordinated by
the Corporate Centre.
– 12 Divisions of production of goods and services.
– various commercial distribution and agricultural-food enterprises.
• A number of Research, Vocational Training and Teaching
centers and a 4,000 students University.
Management structure
• Eight Vice Presidents, along with the three
Heads of Department at the Corporate Centre,
together constitute the General Council (GC).
• GC is responsible for drawing up co-ordination
and corporate strategies and objectives as well
as appointing MD.
Governing Structure
• The individual co-operatives are the basic level
of the MCC’s structure. General Assembly acting
as the supreme body for the expression of the
co-operative.
• The Co-operative Congress is responsible for
giving impetus to and controlling of the policies.
The Committee consists of 20 elected members
representing the 14 Divisions of the Corporation.
• The Co-operative Congress is the supreme body
of MCC, in terms of sovereignty and
representation, equivalent to its main General
Assembly.
Double Loop Structure
Business
Social
The secret to MCC’s Success
• Co-operatives, in which people are given priority over capital, an attitude
which results in a high level of worker involvement in the company,
through direct participation in both the capital and the management. All
this contributes to creating a positive atmosphere of consensus and
collaboration.
• A decidedly business-like approach to the co-operative phenomenon, in
which company profitability and planned, rigorous and demanding
management efficiency are seen as basic principles.
• Re-investment of practically all resources generated.
• Ongoing adaptation to the changes taking place in the environment.
• Creation of efficient inter-cooperation instruments: both in the financial
field and as regards social welfare, innovation and R&D, co-ordinated job
management and situations of crisis.
• Finally, another key element in the success of the Mondragón
Experience, both initially and today, is the importance attached to
training, both as regards formal education, such as that provided by our
University Faculties and Professional Schools, and as regards Lifelong
Training linked to professional refresher courses and advanced courses.
MCC Never been linked to the State
• Co-operative system has never, either at the moment of its foundation or
during its subsequent evolution, been linked to the State or to any type
of Public Administration. MCC co-operatives were set up and have
grown thanks to the efforts of groups of independent people committed
to creating companies with a co-operative working philosophy, ensuring
the participation of members in the capital and management of the
organizations and guaranteeing an approach based on solidarity.
• Nevertheless, particularly during their initial years, MCC co-operatives
have benefited from the backing provided by MCC support entities,
created not by the Administration, but by the Co-operative Group itself.
These entities include, among others: Caja Laboral in the financial field;
the Business Division, created by Caja Laboral to provide advice
regarding management issues and to promote new co-operatives; MCC
vocational training centres and university, for training qualified staff; and
Ikerlan in the field of research.
• The philosophy that has underpinned MCC Experience right from the
very beginning has been that of creating MCC own support
organizations (in the financial, training, research and international fields,
etc.), as and when necessity dictates.
MONDRAGÓN
•
•
•
•
Upgrading from Co-op
Balance Social and Capitalist
Management as Business
Run as Co-op
HR Development Index
Trend in Inequality
Depleting Natural Resources
The Developer King
Sufficiency Economy Model
Clarify and Codify
• The Sufficiency Economy is an approach
to life and conduct which is applicable at
every level from the individual through the
family and community to the management
and development of the nation. It
promotes a middle path, especially in
developing the economy to keep up with
the world in the era of globalization.
Clarify and Codify
• Sufficiency has three components: moderation; wisdom
or insight; and the need for built-in resilience against the
risks which arise from internal or external change. In
addition, the application of theories in planning and
implementation requires great care and good judgement
at every stage.
• At the same time, all members of the nation – especially
officials, intellectuals, and business people – need to
develop their commitment to the importance of
knowledge, integrity, and honesty, and to conduct their
lives with perseverance, toleration, wisdom, and insight,
so that the country has the strength and balance to
respond to the rapid and widespread changes in
economy, society, environment, and culture in the
outside world.
Sufficiency Economy Frameworks
• With standing Globalization
• Focus on Indigenous
• Balance Social Well Being and Economic
Sustainability
• Rational Base
• Ethical Conduct
Alternatives
Main Stream
Socialism
economy
Capitalism
economy
Globalization
Trade
economy
- No Boundary and
Unlimited Space
Sufficiency
economy
Self-sufficiency
economy
- Stone Age
Toward the Frameworks
1. Regarding the Form and Function – ‘Sufficiency
Economy’ is a Philosophy serves as ‘Guide for the way
of living/behaving for People of all levels toward the
Middle Path’.
2. Regarding the Agenda – Sufficiency Economy delivers
the Middle Path as the ‘Economic Life Guiding Principle’,
i.e. a secularized normative prescription, but not a
religious statement of faith.
3. Regarding the Application Domain – Sufficiency
Economy is scalable, with ‘universal domain
applicability’: Individual, House- hold, Community,
Project, Business, Management, Institution, Polity,
Society, Nation State, Region, Humanity, Biosphere.
Toward the Frameworks
4. Regarding the Foundation for an Economic Framework –
Sufficiency Economy is complete, governing everything
from Motivation (Utility, Drives, etc.), to Criteria (Goals,
Objectives, etc.), to Behaviour (Production,
Consumption, Investment, etc.), to System (Collectivity,
Connectivity, etc.), and can be said to (at least implicitly)
address all issues within a dynamic setting.
5. Regarding the Past Course of Development – As such,
Suffi- ciency Economy has been put forward for quite
some times, and is not initiated as a result of the Asian
Crisis.
6. Regarding the Present Course of Development –
However, in the Post-Crisis Environment, it has been
reemphasized as the Solution to Globalization and
Changes.
Toward the Frameworks
7. Regarding the Future Course of Development – the
Middle Path remains critically needed, particularly now
with the pro- cess/mandate of pursuing Economic
Development to keep pace with Globalization.
8. Regarding the Promise of Future – Sufficiency Economy
ensures Balance and Readiness to cope with
fast/extensive changes w.r.t. Materials, Society,
Environment, and Culture.
9. Regarding the Paradigm Shift – Sufficiency Economy
arises against the backdrop of: Globalization
(Integration) and (Pace of Technological-Cultural-Social)
Changes, as well as perhaps Neoclassical Economic
Policy Conducts, Develop- ment Models, Mandates, and
Management.
10. Regarding the Working Definition – ‘Sufficiency’ entails 3
Components: Moderation, Reasonableness, and Requirement for a
Self-Immunity System (able to cope with Impacts from
Internal/External Changes).
11. Regarding the Presupposed Characters of the People/Processes –
Sufficiency Economy requires Breadth, Thoroughness, and
Carefulness particularly in Applying Knowledge, in Planning, and
in Implementation (of plans); alternatively, Sufficiency (Economy)
particularly requires Breadth in Applying Knowledge,
Thoroughness in Planning, and Carefulness in Implementation (of
plans).
12. Regarding the Presupposed Moral/Ethical Foundation of the
People – Sufficiency Economy requires, and enforces the condition,
that People are to possess Honesty/Integrity (with Appropriate
Breadth of Knowledge to call upon); moreover, People are to conduct
their lives with Perseverance/Tenacity (with Mindfulness and
Thoroughness to call upon).
Module 8: Conclusion
Michael E. Porter
The Competitive Advantage of Nations, 1990 presents a new
theory of how nations and regions compete and their sources of
economic prosperity. Motivated by his appointment by
President Ronald Reagan to the President's Commission on
Industrial Competitiveness, the book has guided economic
policy in countless nations and regions. Subsequent articles
have expanded on the concept of clusters (geographic
concentrations of related industries that occur in particular
fields) and other aspects of the theory.
Michael J Enright
Michael J Enright is a leading expert on competitiveness,
regional economic development, and international business
strategy. Enright joined the University of Hong Kong as Sun
Hung Kai Professor of Business Administration in 1996 after
six years as a professor at the Harvard Business School. He
also directs the Asia-Pacific Competitiveness Program at the
Hong Kong Institute of Economics and Business Strategy and
was a Founding Director and current Advisory Board
Member of The Competitiveness Institute (a global
professional body with members in 40 nations).
José María Arizmendiarrieta
A young priest born in Marquina in the
province of Vizcaya, arrived in Mondragón in
1941. A highly pragmatic and hard-working
man, José María was to be the driving force
behind the Mondragón Co-operative
Experience, serving as an exemplary role
model for all co-operative members until his
death in 1976.
“The Developer King”
Competitiveness of the Nation
Meso Model
IC Model (Skandia)
Market Value
Financial Capital
Intellectual Capital
Human Capital
Structural Capital
Customer Capital
Organisational Capital
Process
Capital
Innovation Capital
Intellectual
Property
Intangible
Assets
Social Economy
Social Enterprise
MONDRAGÓN CORPORACIÓN COOPERATIVA (MCC).
Sufficiency Economy