Body of Body of KnowledgeKnowledge

CompetitivenessCompetitivenessAnukul TamprasirtAnukul Tamprasirt

Courses Overview

• The Theory: CompetitivenessThe Theory: Competitiveness• The Implication:The Implication:

Cluster Development Agents (CDA)Cluster Development Agents (CDA) DevelopmentDevelopment

Note: Note: Competitiveness must be taken prior to CDA DevelopmentCompetitiveness must be taken prior to CDA Development

Courses Overview

• The Theory: CompetitivenessThe Theory: Competitiveness– Why CompetitivenessWhy Competitiveness– Competitiveness TheoryCompetitiveness Theory– Next Generation of Competitiveness TheoryNext Generation of Competitiveness Theory– ClusterCluster

Courses Overview

• The Implication:The Implication:Cluster Development Agents (CDA)Cluster Development Agents (CDA) DevelopmentDevelopment– CDA CompetenciesCDA Competencies– Psychology & MotivationPsychology & Motivation– Cluster Implementation MethodologiesCluster Implementation Methodologies– Managing Cluster InitiativesManaging Cluster Initiatives

The Theory: The Theory: Competitiveness of The NationCompetitiveness 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.

1911Scientific

Management

1928DISC

1964Management Grid

1970BCG Matrix Competency

1980Five Force

1985The Value Chain

1990Dynamic DiamondDecade of Brain

Industrial Economics

2005Blue OceanBlue Ocean

1992BSC

1995Whole Brain

1900 2000

9/11World War

I

World War

II

1961Split Brain

Evolution of Evolution of ManagementManagement

Examples of Modern Management and

Psychology Concepts

Personal Behavior Model (DISC)

BCG Matrix Competency

Balanced Score Card (BSC)

FinancialCustomer

Internal Biz Process

Learning & Growth

Value Proposition

BSC

BSC Strategy Mapping

•Nano •Genomics•Digital

Molecular Economy

Leap Frog TechnologyProductivity ImprovementKnowledge BaseParadigm Shift

The Future

“The Bottom Line”Focusing On Strategy

STRATEGY

HUMAN RESOURCES

BUSINESS UNITS EXECUTIVE TEAM

INFORMATIONTECHNOLOGY

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.Guru” - “Charlatan” is too long.

New Economy

New Economy

• Industrialization Era• Globalization• ICT Economy• Molecular Economy…..

Values in New Economy

• Tangible • IntangibleFrom To

Low Cost Solution ProviderFace to Face Screen to ScreenMass Advertising Target

AdvertisingClock Time Communication

Real Time CommunicationSalesmanship Corporate AmbassadorMarket share Mind Share

Maximum of Sale Volume

Maximum of AccessTransaction Relation

Output Outcome

Globalization

Evolution and Influencing power of ICT -> Evolution and Influencing power of ICT -> Flatted WorldFlatted World

PC and Window

Internet and Web Brower

Work Flow Software

Uploading

Outsourcing

Off Shoring

Supply Chain

In sourcing

In Forming

Steroids““Globalization”Globalization”

The World Is FlatThe World Is Flat

1990

1991

The The EEmergence omergence of New Economyf New Economy

• Mass manufacturing Competition is Over• Value of intangible assets• Soft infrastructure critical• Focus on activities not

industries

CCreative reative EEconomy conomy Demand Knowledge, InnovationDemand Knowledge, Innovation

Information Technology Era and Future Trends

“The Paradigm Shift”

Paradigm ShiftParadigm Shift ( (e-everything)e-everything)

Intelligent(Info-Mobility)

Info auto-mobilityLocation Based Services (LBS) and payment systemsPositioningTravel/traffic information servicesFleet Management information servicesIntegrated safety Management Intelligent management of road, rail, maritime & air transport-people and cargoIntermodality, 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

Political/Legal

Industry Environment

Demographic Economic

Technological

GlobalCompetitiveEnvironment

Sociocultural

Components Of The Macro EnvironmentComponents Of The Macro Environment

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 New Paradigm of Globalization CompetitionCompetition

Market Demand

Global Floor

“ISO” Ceiling

Low Cost,Low Value

Trap

Labor Intensive

Supply

Vertical/Specific/Innovation

New!!

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 pre occupation 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 spe cialist 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-im mediate 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 bene fited 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 col laborators 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 tech nology 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 part nership 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. Valen zuela 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,” Valen zuela 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 mathe matics 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 In stitute 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 drinking-water 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 food-processing 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 tech nology, 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 mate rials, will find their way into cars. Tech nological 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 Daimler Chrysler 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 com puting 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 distribu tion 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 one-story, 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 2,000-watt 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. Solar-energy 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 w

hich 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

Strategy BEFORE Policy

PRIVATE

RESTRUCTURE

REPOSITION

PUBLIC

Competitiveness Is…

Pursuing Effective Dialogue

• 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

INEFFECTIVEINEFFECTIVE EFFECTIVEEFFECTIVE

Competitiveness Is…

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 MeasurementCompetitiveness Measurement

Competitiveness IndexesCompetitiveness 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.

Threat of New Entry

Rivalry Among Existing Competitors

Bargaining Powerof Customers

Threat of Substitutes

Bargaining Powerof Suppliers

• Economies of scale• Proprietary product

differences• Brand identity• Switching costs

• Capital requirements• Access to distribution• Absolute cost advantages• Government policy• Expected retaliation

• Relative price performance of substitutes• Switching costs• Buyer propensity to substitute

• 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

• 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

• 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

Porter’s Five Forces ModelPorter’s Five Forces Model

Source: Michael E. Porter, Competitive Advantage (New York: Free Press, 1985)

Revival

The Five Competitive ForcesThe Five Competitive Forces

Force Entry

Rivalry

Substitutes

Buyers

Suppliers

Erecting barriers (isolating mechanisms) create exploit economies of scale, aggressive deterrence, design in switching costs, etc.

Compete on nonprice dimensions: cost leadership, differentiation, cooperation, etc.

Improve attractiveness compared to substitutes: better service, more features, etc..

Reduce buyer uniqueness: forward integrate, differentiate product, new customers, etc..

Reduce supplier uniqueness: backward integrate, obtain minority position, second source, etc..

CompetivenessDiamond Model

Porter’s Diamond ModelPorter’s Diamond Model

Diamond Model

Cluster

Stages of Competitiveness Development

Customers

Firm

Suppliers

Competitors Complementors

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

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

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

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

Coopetition and theCoopetition and the Value NetValue Net

Source: Adam Brandenburger and Barry Nalebuff, Co-operation (New York: Currency Doubleday, 1996)

The Collaborative The Collaborative Competitiveness DevelopmentCompetitiveness 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 FailuresEnright’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

ActivitiesActivities ResourcesResources

KnowledgeKnowledge

Enright 2002

• Is R&D Advantage? • Is “high tech” an Industry Advantage?• Cheap Labor?• Abundance Resources?

Questions of Contributing Factors

• Competitiveness is – Innovation– Strategic Management System Thinking– Collaboration– Financial tools– Commercialization, etc.

Competitiveness is…(NOW)

Enright’s Meso ModelNext 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 Value Creation Competition”Competition”

Cluster: Cluster: Competitiveness StrategyCompetitiveness 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 DefinitionCluster: By Definition• “A cluster is a geographically proximate gr

oup of companies and associated institutions in a particular field, linked by commonalities and complementarities.“

Michael E. Porter.

Examples: CExamples: Ceramic eramic TTile ile CCompanies ompanies and and SSuppliers in uppliers in 30 KM.30 KM. RRadiusadius

Western Australia (Digital Content Clusters)

New Orleans - Entertainment Clusters

Øresund Science Region (13)

Øresund Food Network

Øresund Environment Academy

BiotechMedico

Bio + IT

Environment

FoodICT ØSR

Medicon Valley Academy

Øresund IT Academy

Pearl Delta City

Cluster: It is a matter of sizeCluster: 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 And, cluster is not just an alliancealliance

Cluster RequirementsCluster Requirements• A direct dialog with the cluster firms to better und

erstanding of the industry needs.• Create awareness of existing support programs t

o firms and associations in the industry.• Designing tailor made support for the industry.• Involving private sector in their financing and ma

nagement.• Coordination within different Government depart

ments to support the industry.

FFosteosteringring The CThe CllustersustersSTATISTICAL OBSERVATION

INDUSTRY STUDIES

FIRMS FORAE(Dialog)

CHANGE MANAGEMENT+

-

Cluster ValuesCluster 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 StrategyCluster Strategy• Organic Cluster Strategies

• Transplant Cluster Strategies

• Hybrid Strategies

Cluster Life Cycle

Enright 2006

Enright 2006

Cluster Life Cycle

Cluster Characteristic

Cluster Environment

Companies

Research Community

Government

FinancialInstitutes

Institution For Collaboration -IFC

Cluster “Silo”

The Triple Helix

Etzkowitz(2002)

“Leap Frog”Creativity and Innovation

“Leap Frog”(Innovation)

• PProductroduct Innovation Innovation• PProcesrocess Innovations Innovation• Business Model InnovationBusiness Model Innovation• Breakthrough InnovationBreakthrough Innovation

Characteristic Needed for Characteristic Needed for ClusteringClustering

Extreme Specialization

Information Spillovers

Faster Innovation Adopters

Easy Access to Resources

Flexibility and Rapid Response

Limitated Facilitates

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

• 4 Components– Core Cluster– Supporting Industries– Target Markets– Institutional Supports

(Drivers, Facilitators)

CLUSTER MAPS

Example: Transportation ClusterExample: Transportation Cluster

Clusters must be evoluing by private and public influrencing actions

ENABLING TECHNOLOGIES

Distribution Channels

Retail Shops

Cinemas

Internet

TV/Radio Broadcasts

Advertising Media

Libraries

Schools

Filmgoers

Markets

Music BuyersTV/Radio AudiencesReaders

Utilities/Public Sector

Consumer ElectronicsEducation

Edutainment

Visitor AttractionsBusiness

Promotion &ReviewMarketing

Media

Critics

Relative Weakness

ProfessionalServices

IPR Lawyers

Talent Agents

Patent Agents

Accountants

Film, TV, Radio & Music Studios Telecomms Computing Electronic, Digital

& Optical Media Print Media Internet & Online Systems

OTHER CLUSTER PARTNERS

CLUSTER MAPS - SCOTLAND’S CREATIVE MEDIA INDUSTRIES CLUSTER

IPR Commercialisers

Film Distributors

Game Distributors

Book Publishers

TV/Radio Channels

Advertising Agencies

Newspapers/Magazines

Record Labels

Multimedia Distributors

Content OriginatorsMultimedia Producers

Designers

Authors

Film/TV/Radio Producers

Journalists

Musicians

Games Producers

Film Producers

Key to shading: Relative strength Broadly on par

UPGRADING & INNOVATIVE BODIES

Art & MusicSchools

Universities& Colleges

SACIndustrial

R&D

Industry Bodies Banks &

Financiers

Government(SO,DCMS)

Libraries &Museums

EducationAuthorities

E-commerceusers

SmartCities

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 ClustersItaly Clusters

USA ClustersUSA 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 stepsCompetitiveness 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 “reCompetitiveness 2.0: The cluster “recipe”cipe”

• 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 Competitiveness 3.0: The future of competitivenessof 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 ChronologyThe 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 CompetitivenessDemand 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

ValueIntellectual 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 ModelMarketValue

FinancialCapital

IntellectualCapital

HumanCapital

StructuralCapital

CustomerCapital

OrganisationalCapital

InnovationCapital

ProcessCapital

IntellectualProperty

IntangibleAssets

“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

Main Stream AlternativesCapitalism

economySocialism economy

Sufficiency economy

Self-sufficiency economy

Trade economy

- Stone Age- No Boundary and Unlimited Space

Understanding Human Nature

Point of

The Danger of

Accept

The Limitation of

Point out

The weakness ofGlobalization

Toward the Frameworks 1. Regarding the Form and Function – ‘Sufficiency Econo

my’ 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 Frameworks4. 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 Frameworks7. Regarding the Future Course of Development – the Midd

le 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 NationCompetitiveness of the Nation

Meso Model

IC Model (Skandia)Market Value

Financial Capital Intellectual Capital

Human Capital Structural Capital

Customer Capital Organisational Capital

Innovation Capital Process Capital

Intellectual Property

Intangible Assets

Social Economy

MONDRAGÓN CORPORACIÓN COOPERATIVA (MCC).

Social Enterprise Sufficiency Economy