The Competitiveness of Nations
in a Global Knowledge-Based Economy
Harry Hillman Chartrand
April 2002
The World Competitiveness Report 1992
World
Economic Forum & Institute for Management Development,
AT THE CORE OF COMPETITIVENESS IN
1992
In 1992, neglecting implementation remains the most
common mistake made by most senior leaders. The all powerful Prime Minister or CEO,
sitting alone in his office and devising grand schemes, is still perceived as
the principal forces affecting competitiveness. Nothing could be more
wrong!
EXCELLENCE IN IMPLEMENTATION IS KEY TO COMPETITIVENESS
The past 12 World Competitiveness Reports have
consistently shown that excellence in the implementation process is a
cornerstone to competitiveness.
The same principle applies to companies. Most strategies do not fail because they are ill conceived but because they are badly implemented. Competitive organizations have correctly mastered the implementation of strategies and the management processes the linked to it. Emphasis on total quality, speed, mass customization, service, etc. are more than just passing fads. They outline a new competitive philosophy: “doing things right is no less important than doing the right thing!”
[HHC - “For the Chinese, virtue means doing the right thing in the right measure at the right moment... ” Franz von, M-L., On Divination and Synchronicity: The Psychology of Meaningful Chance, Inner City Books, Toronto, 1980, p.84]
In 1992, the World Competitiveness Report again
highlights the importance of focusing on implementation. Without denying the crucial role played
by technology or market driven competitiveness, the fact is that, in a period of
difficult economic conditions, countries and enterprises which are process
driven - that is, implement well - are in a superior position to those which do
not use this approach.
The World Competitiveness Report also stresses the role
of the so-called “softer side” of competitiveness, which is defined as follows.
The easily measurable hard •facts underlying the competitive performance of a
country—such as GDP, growth, balance of trade SOFT and inflation—must be taken
in perspective with less easily measurable softer facts—such as motivation,
education, attitudes and values.
The softer side of competitiveness reflects the shift
towards a knowledge-based economy. In the industrialized world today, only 15%
of the active population physically touches a product. The other 85% are adding
value through the creation, the management and the transfer of information. As a
result, the human dimension of competitiveness has become a key success
factor in a modern economy.
This human dimension of competitiveness is characterized
by the longer time lag needed to reverse trends. For example, the first results of
reforming the education system in many Western economies, especially at the
secondary school level, will probably only be seen in a generation, that is 20
years. Meanwhile, the economy will
be starving from a lack of badly needed skills. Consequently enterprises will have to
invest heavily in their own education programmes.
The softer side of competitiveness revolves around the
relationship between competitiveness and values. It has been demonstrated in the past that
having a set of collective values based on hard work, as found in Confucian or
Calvinistic societies, is more conducive to competitiveness than following
individual values as some other societies do. In looking back over the years, it is
evident that values tend to evolve as countries reach different stages of their
economic and cultural development.
Four identifiable stages exist: Hard Work, Wealth, Social Participation
and Self Achievement. They describe the key motivation of a society.
This chart [not included] shows how competitiveness is linked attitudes
and values. For example, the current pressure in