Capital, market, technology and expertise:

The fundamental elements to develop competitiveness

Is the debate over an export-led growth relevant for our purposes – we need to expand our economic pie, first and foremost? Is it also relevant to the US – given its unsustainable balance of trade issue – and for its premier enterprises like General Electric, which seeks to revive its old glory, growth? What about Germany, Japan, South Korea or Taiwan, etc.?

The bottom line: everyone seeks competitiveness – because competitive products will always find a market. Yet competitiveness doesn’t have to be rocket science. Day-to-day, ordinary products can be the foundation of competiveness – so long as they deliver value that the consumer desires on an ongoing, sustained basis. Ergo: the first requisite is dynamic as opposed to static thinking, e.g., how many “New Tide” have we seen in the market over the recent past? Unfortunately, competitiveness may be abstract given our lack of experience?

We need to revisit our mindset – in a similar manner that Old Europe had to learn to be New Europe?

The fundamentals of competitiveness – capital, market, technology and expertise – won’t give us the edge until we embrace change. For example, foreign capital gravitates to countries that can spell out their competitive advantage – and articulate their priority industries – supported by the requisite infrastructure, not “bridges to nowhere”.

Capital: Competitive sourcing of capital is imperative. That means revisiting our brand of nationalism – learning from China and the Asian tigers before them. Our bias for monopoly has rendered our major industries globally uncompetitive – jack of all trades, master of none, beyond low lying fruit? The GE model (circa: America’s then infant industry) is the exception – as Siemens learned and thus restructured. It’s not a 21st century model. And despite its success, GE is constantly rethinking its business portfolio: they abandon businesses which aren’t market leaders as their share price takes a beating; and hope that their biggest profit generator, global finance, recovers. Even Japan, whose economic miracle was driven by its conglomerates, has realized that competitiveness demands that they merge, and share and upgrade technology incessantly. An option for our conglomerates is to partner specific businesses with global industry leaders in the local market in exchange for partnership in the region if not globally – so that the business unit concerned develops a global competitive mindset and eventually capability.

Market: Not every product idea is a market winner. Competitiveness must be built into the DNA of our industry. That means understanding the target market of the product and thus its market and financial viability. And we must toss our parochial blinders and view the region if not the world as our market. That means investing in market research, R&D and marketing at world-class levels – for which we lack the commitment and resolve? We need government leadership especially to attain world-class R&D capability, but industry doesn’t have to wait for government to invest in world-class market research and marketing, for example.

Technology: Technology is the core of product winners or competitive products. We have a lot of catching up to do. We cannot build every product or R&D idea from the ground up. We have to partner with R&D entities that have a track record of innovation. These can be world-class universities or entrepreneurial laboratories or R&D centers wherever they are.

Expertise: It is something that is developed overtime and continuously updated. Again, given the catching up we need to do we must wear the partnership hat and seek those with the expertise and a track record of success for our top priority businesses. We have to do our homework and figure out what economic activity or priority industries will give us the biggest bang for the buck – and thus attract foreign capital. And we must constantly seek and pursue expertise well beyond our borders. Good enough is never good enough!