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IPS National Competitiveness Research 2014-2015
Created Advantage as the Source of Competitiveness
Dong Sung Cho and Hwy Chang Moon
Seoul National University
Republic of Korea
Contents
Fundamental Source of Economic Growth
Conclusion
Theory, Methodology, and Results
Comparison of Three National Competitiveness Reports
2
Contents
- Reports: IPS,WEF, and IMD
Fundamental Source of Economic Growth
Conclusion
Theory, Methodology, and Results
Comparison of Three National Competitiveness Reports
3
Reports: IPS ,WEF, and IMD
4
Three Reports on National Competitiveness
Three major National Competitiveness Research Institutions
IMD IPS WEF
5
Overview of the Three Reports
Items
Theoretical Base
Data
Weights
° DD Based 9-Factor
Model (IPS model)
° Hard data: 1/2
° Soft data: 1/2
° Different weights for
different strategies
NCR (IPS)
2014-2015
° No particular theory
° Hard data: 2/3
° Soft data: 1/3
° Hard data: 2/3
° Soft data: 1/3
WCY (IMD)
2015
° No particular theory
° Hard data: 1/3
° Soft data: 2/3
° Different weights for
different groups
GCI (WEF)
2015-2016
Partner
institutes
3. Policy
implications
° KOTRA offices abroad
° 3Ⅹ3 Framework
° Universities and other
institutes
° Population
° Per capita income
° Region
° Universities and other
institutes
° Factor-driven stage
° Efficiency-driven stage
° Innovation-driven stage
No. of countries ° 62 countries ° 61 countries ° 144 countries
Not organized
Lacking theoretical rigor
Strong theoretical basis
Various analytical tools
VS
6
Me
tho
do
log
y
Change of Factors in the IMD and WEF Reports
Domestic Economy
Internationalization
Government
Management
Finance
Infrastructure
Science and Technology
People
IMD
Economic Performance
Government Efficiency
Business Efficiency
Infrastructure
1989 2001
Population
2003 2015
Population
GDP per capita
Region
2004
Note: GCI: Growth Competitiveness Index , GCI*: Global Competitiveness Index, CCI: Current Competitiveness Index,
MICI: Microeconomic Competitiveness Index, BCI: Business Competitiveness Index
WEF
Civil Institutions
Openness
Government
Management
Finance
Infrastructure
Technology
Labor
1996 2000
GCI
CCI MICI BCI
2002 2003 2006
GCI*
2015 2008
• Aggregate Country
Performance Indicators
• Macroeconomic Environment
• Technology:
Innovation and Diffusion
• Human Resources:
Education, Health, and Labor
• General Infrastructure
• Public Institutions
• Domestic Competition and
Cluster Development
• Company Operation and Strategy
• Environment
(2005~2006, 9 pillars)
• Market Efficiency
• Technological Readiness
• Business Sophistication
• Innovation
• Environment
(2006~2007, 11 pillars)
• Basic Indicators
• Institutions
• Infrastructure
• Macroeconomy
• Health and Primary Education
• Higher Education and Training
• Financial market
sophistication
• Technological readiness
• Market size
• Business sophistication
• Innovation
(2007~2008, 12 pillars)
• Institutions
• Infrastructure
• Macroeconomic stability
• Health and primary education
• Higher education and training
• Goods market efficiency
• Labor market efficiency
• Financial market
sophistication
• Technological readiness
• Market size
• Business sophistication
• Innovation
(2008~2009, 12 pillars)
• Institutions
• Infrastructure
• Macroeconomic stability
• Health and primary education
• Higher education and training
• Goods market efficiency
• Labor market efficiency
• Financial market
sophistication
• Technological readiness
• Market size
• Business sophistication
• Innovation
(2009~2010, 12 pillars)
• Institutions
• Infrastructure
• Macroeconomic stability
• Health and primary education
• Higher education and training
• Goods market efficiency
• Labor market efficiency
• Financial market development
• Technological readiness
• Market size
• Business sophistication
• Innovation
(2011~2015, 12 pillars)
• Institutions
• Infrastructure
• Macroeconomic environment
• Health and primary education
• Higher education and training
• Goods market efficiency
• Labor market efficiency
7
United States
Germany
United Kingdom
Without theoretical validity? (1)
1 1 1 1 1 1 1 1
3
1 2
1 1 1
1 2 2
2
6
1 1 2
4 5
7
5
3 3
0
2
4
6
8 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
IMD
WEF
15
20 21
23 26
16 16 13 16
10 9 9
6 10 14 13
13 15
8 5
7 7 5 6 6
4 4 4
0
10
20
30
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
IMD
WEF
16
19 22 22
21 20 21 21 22
20
18 18 16 19
11 15
11 13
10 9
12 13
12 10
8 10
9
10
0
10
20
30
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
IMD
WEF
8
Discrepancy of
Rankings
Hong Kong
Singapore
Malaysia
Without theoretical validity? (2)
Discrepancy of
Rankings 13
10 6
3 2 3 3 2 2 1 1
3 4 2
17
24 21
14 10
12 11 11 11 11
9 7 7
7
0
10
20
30 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
IMD
WEF
8
4
2 2
3 2
2
3
1
3 4
5
3 3
4
6 7
5
8 7
5
3
1 2 2 2 2
2
0
5
10 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
IMD
WEF
26 21
16
28
22 23
19 18
10
16
14 15 12
14
27 29 31
25
19 21
21 24
26
21
25 24
20
18
0
5
10
15
20
25
30
35 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
IMD
WEF
9
Contents
- Theories
- Measurement: IPS Model
- Result 2014-2015
- Analysis: Country Grouping
- Simulation: Cost & Differentiation Strategies
Fundamental Source of Economic Growth
Conclusion
Theory, Methodology, and Results
Comparison of Three National Competitiveness Reports
10
Theories
11
The Productivity Model:
• Competitiveness was not the issue those days.
• Capital and labor as two determinants, thus P = f (K,L)
This model failed to explain:
• Why resource-lacking countries are more affluent than
resource-rich nations in general.
Sources of National Competitiveness Before the 1980s
12
Concept of the Productivity Model
Endowed
Resources National
Competitiveness
13
A New Model should be:
• comprehensive enough to include non-
quantitative variables to better explain the increasingly complex nature of the world economy
• dynamic enough to better reflect the ever-changing nature of national competitiveness
In response to the White House Presidential Commission on
Industrial Competitiveness, Michael Porter (1990) proposed
a Diamond Model as a means to explain a nation’s competitiveness.
Sources of National Competitiveness Since the 1980s
14
Comparison of the Productivity Model & the Diamond
Business Context
National
Competitiveness
Related & Supporting
Industries
Domestic
Market
Endowed
Resources
Chance 15
Characteristics of the Diamond Model
The first model to encompass non-quantitative variables, which are mostly physical in nature
Not so relevant to developing and underdeveloped economies
• It was mainly designed for developed economies, failing to fully
identify sources of NC that are characteristics of developing and underdeveloped economies.
Cho (1994) proposed the 9-Factor Model of NC
by including human factors as additional variables in the Diamond.
16
Comparison of the Productivity Model
Business Context
National
Competitiveness
Related & Supporting
Industries
Domestic
Market
Endowed
Resources
Chance
Workers
Professional Managers,
Engineers, Designers
Politicians &
Bureaucrats
Entrepreneurs
The Diamond & the 9-Factor Model
17
Time
Insufficient
Managerial &
Technological
Innovation
Lack of
Entrepreneurship
Low
High
Competitiveness
No
Policy
Workers
Endowed Resources
Politicians
& Bureaucrats
Business Context
Entrepreneurs
Related/supporting Industries
Professional Managers,
Engineers, Designers
Demand Conditions
LDC NIC SDC FDC Economic Stage
Physical factors
Human factors
Dynamics of National Competitiveness
18
Measurement: IPS Model
19
62 Countries
20
Europe (19) Asia (24) America (12) Oceania (2)
• Austria
• Belgium
• Croatia
• Czech Republic
• Denmark
• Finland
• France
• Germany
• Greece
• Hungary
• Italy
• Netherlands
• Poland
• Russia
• Spain
• Sweden
• Switzerland
• Ukraine
• United Kingdom
• Bangladesh
• Cambodia
• China
• Hong Kong
• India
• Indonesia
• Iran
• Israel
• Japan
• Jordan
• Korea
• Kuwait
• Malaysia
• Oman
• Pakistan
• Philippines
• Saudi Arabia
• Singapore
• Sri Lanka
• Taiwan
• Thailand
• Turkey
• U.A.E.
• Vietnam
• Argentina
• Brazil
• Canada
• Chile
• Columbia
• Dominican Republic
• Guatemala
• Mexico
• Panama
• Peru
• United States
• Venezuela
• Australia
• New Zealand
Africa (5)
• Egypt
• Kenya
• Morocco
• Nigeria
• South Africa
Theoretical Background
Model 1: Diamond Model
- Porter (1990)
- Porter (1998)
- Porter (2007)
Physical Factors Human Factors
Model 2: 9-Factor Model
- Cho (1994)
- Cho & Moon (2000)
Sco
pe o
f C
om
peti
tiven
ess
Model 3: Double Diamond Model
- Rugman (1991)
- Rugman & D’Cruz (1993)
- Moon, Rugman &
Verbeke (1995,1998)
Model 4: IPS Model
Cho, Moon, & Kim (2008, 2009)
Do
mesti
c
Inte
rnati
on
al
Source of Competitiveness
21
IPS Model
Note: The figure in the parenthesis indicates the number of criteria in each factor.
Factor
Conditions
•Energy Resources
•Other Resources
Demand
Conditions
•Size
•Quality
Related Industries
•Industrial Infrastructure
•Coordination & Synergy
Business Context
Workers
•Quantity
•Quality
Professionals
•Personal Competence
•Social Context
Entrepreneurs
•Personal Competence
•Social Context
Politicians &
Bureaucrats
•Structure
•Strategy
•Politicians
•Bureaucrats
Double Diamond-based 9 Factor Model
(11) (19) (9) (8)
(25) (10)
(15) (9)
22
Result 2014-2015
23
Rank Country Index
22 Russia 40.24
23 Saudi Arabia 40.23
24 Austria 39.95
25 Belgium 39.88
26 Korea 39.80
27 Indonesia 37.92
28 Chile 37.36
29 Jordan 37.23
30 Thailand 37.10
31 Panama 37.08
32 Poland 36.60
33 Brazil 36.50
34 Philippines 36.49
35 Vietnam 36.17
36 Hungary 36.13
37 Italy 35.96
38 Oman 35.83
39 Mexico 35.51
40 Malaysia 34.28
41 Egypt 33.80
42 Colombia 33.11
Rank Country Index
1 China 57.39
2 Canada 56.22
3 United States 55.76
4 Singapore 55.76
5 Hong Kong 53.25
6 Australia 51.62
7 Sweden 51.18
8 Switzerland 48.98
9 Finland 47.64
10 Taiwan 46.80
11 Denmark 46.49
12 Germany 45.37
13 New Zealand 45.06
14 Netherlands 45.03
15 Israel 44.99
16 India 44.40
17 U.A.E. 43.60
18 Kuwait 42.00
19 France 41.25
20 Japan 40.95
21 United Kingdom 40.32
Note: Rankings when all competitors employ cost strategy
NCR 2014-2015 Rankings (Cost Strategy)
Rank Country Index
43 Czech Republic 33.08
44 Peru 32.83
45 Spain 32.72
46 Argentina 32.48
47 Turkey 32.33
48 Dominican Republic 32.22
49 Cambodia 31.96
50 Pakistan 30.58
51 Greece 30.34
52 Morocco 29.65
53 Ukraine 29.06
54 Guatemala 29.06
55 Nigeria 28.16
56 Bangladesh 27.12
57 Iran 26.70
58 Sri Lanka 25.14
59 Croatia 24.10
60 South Africa 23.46
61 Venezuela 22.66
62 Kenya 19.66
24
Rank Country Index
43 Turkey 37.66
44 Mexico 37.51
45 Morocco 37.32
46 Argentina 36.04
47 Cambodia 35.92
48 Greece 35.71
49 Bangladesh 35.67
50 Russia 35.61
51 Ukraine 34.98
52 Colombia 34.45
53 Peru 33.83
54 South Africa 33.66
55 Brazil 33.34
56 Guatemala 32.97
57 Pakistan 31.13
58 Croatia 28.75
59 Iran 27.65
60 Kenya 25.65
61 Sri Lanka 25.18
62 Venezuela 17.99
Rank Country Index
22 Italy 52.88
23 U.A.E. 52.64
24 Hungary 50.12
25 Thailand 49.22
26 Poland 48.10
27 United Kingdom 47.88
28 Indonesia 47.06
29 Philippines 46.17
30 Czech Republic 46.07
31 Kuwait 45.38
32 Spain 45.34
33 Jordan 43.42
34 Vietnam 42.63
35 Panama 42.38
36 Oman 41.29
37 Saudi Arabia 41.25
38 Nigeria 40.64
39 Dominican Republic 40.54
40 Egypt 40.35
41 Malaysia 40.03
42 Chile 37.84
Rank Country Index
1 Singapore 76.08
2 Switzerland 75.00
3 Denmark 73.66
4 Canada 71.55
5 Hong Kong 71.43
6 Sweden 70.95
7 Finland 70.93
8 Australia 67.36
9 Israel 66.17
10 Taiwan 65.56
11 United States 65.00
12 Germany 64.28
13 Belgium 62.25
14 Netherlands 62.23
15 Korea 56.80
16 Austria 56.73
17 New Zealand 55.41
18 China 55.40
19 Japan 55.27
20 India 54.64
21 France 54.10
Note: Rankings when all competitors employ differentiation strategy
NCR 2014-2015 Rankings (Differentiation Strategy)
25
Factor Conditions Business Context Related industries Demand Conditions
1: China
2: Russia
3: United States
4: Canada
5: Brazil
......
49: Korea
1: Sweden
2: Singapore
3: Israel
4: Hong Kong
5: Canada
......
14: Korea
1: Taiwan
2: Switzerland
3: Singapore
4: Hong Kong
5: Finland
……..
19: Korea
1: United States
2: Singapore
3: Germany
4: Switzerland
5: Denmark
......
12: Korea
Physical Factors
Workers Politicians & Bureaucrats Entrepreneurs Professionals
1: China
2: Singapore
3: Taiwan
4: Hong Kong
5: Canada
......
13: Korea
1: Singapore
2: Denmark
3: Sweden
4: Finland
5: Hong Kong
......
35: Korea
1: Israel
2: Singapore
3: Switzerland
4: Canada
5: Taiwan
......
22: Korea
1: Singapore
2: Denmark
3: Switzerland
4: Hong Kong
5: Canada
......
13: Korea
Human Factors
26
Top 5 Countries of 8 Factors
Factor Conditions, (49)
Business Context, (14)
Related Industries, (19)
Demand Conditions,
(12)
Workers, (13)
Politicians &
Bureaucrats, (35)
Entrepreneurs, (22)
Professionals, (13)
0
10
20
30
40
50
60
70
Factor Rankings of Korea
Physical Factors Human Factors
Note: The figure in the parenthesis indicates the ranking of each factor.
27
Ran
k
Analysis: Country Grouping
28
Typology of Country Group
Strong-Small
Countries
(强小國)
Strong-Medium
Countries
(强中國)
Strong-Large
Countries
(强大國)
Intermediary-
Small
Countries
(中小國)
Intermediary-
Medium
Countries
(中中國)
Intermediary-
Large
Countries
(中大國)
Weak-Small
Countries
(弱小國)
Weak-Medium
Countries
(弱中國)
Weak-Large
Countries
(弱大國)
Weak
(弱)
Intermediary
(中)
Strong
(强)
National
Competitiveness
SizeLarge
(大)
Medium
(中)Small
(小)
29
Country Group: Result
Sm
all
Stro
ng
1 Singapore
2 Hong Kong
3 Switzerland
4 Denmark
5 Israel
6 Netherlands
7 Belgium
8 Austria
9 U.A.E.
Inte
rme
dia
ry
1 Kuwait
2 Hungary
3 Panama
4 Jordan
5 Czech Republic
6 Dominican Republic
We
ak
1 Greece
2 Guatemala
3 Croatia
Small Group
Med
ium
Stro
ng
1 Sweden
2 Finland
3 Taiwan
4 New Zealand
5 Korea
6 United Kingdom
7 Italy
Inte
rme
dia
ry
1 Poland
2 Spain
3 Oman
4 Chile
5 Malaysia
We
ak
1 Morocco
2 Cambodia
3 Ukraine
4 Kenya
5 Sri Lanka
6 Venezuela
Medium Group
Larg
e
Stro
ng
1 Canada
2 United States
3 Australia
4 Germany
5 China
6 Japan
7 France
8 India
Inte
rme
dia
ry
1 Thailand 2 Philippines 3 Indonesia 4 Saudi Arabia 5 Vietnam 6 Russia 7 Mexico
We
ak
1 Egypt 2 Turkey 3 Brazil 4 Nigeria 5 Colombia 6 Argentina 7 Peru 8 Pakistan 9 Bangladesh
10 South Africa 11 Iran
Large Group
1. U.A.E is included in Small-Strong from Small-Intermediary Group.
2. Dominican Republic is included in Small-Intermediary from Small-Weak Group.
3. Italy goes up to Medium-Strong from Medium-Intermediary Group.
4. India goes up to Large-Strong from Large-Intermediary Group.
5. Mexico goes up to Large-Intermediary from Large-Weak Group.
6. Brazil falls down to Large-Weak Group from Large-Intermediary. 30
0.14
0.49
0.90 0.95
1.11
1.04
0.95
0.86
1.12
0.89
0.42
0.79
1.20
0.65
1.20
0.93
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
Korea: Comparison with Other Medium-Strong Countries
En
erg
y R
es
ou
rce
s
Oth
er R
es
ou
rce
s
De
ma
nd
Siz
e
De
ma
nd
Qu
ality
Ind
us
trial In
fras
truc
ture
Co
ord
ina
tion
an
d S
yn
erg
y
Stru
ctu
re
Stra
teg
y
Qu
an
tity o
f La
bo
r Fo
rce
Qu
ality
of L
ab
or F
orc
e
Po
liticia
ns
Bu
rea
uc
rats
Pe
rso
na
l Co
mp
ete
nc
e S
oc
ial C
on
tex
t
Pe
rso
na
l Co
mp
ete
nc
e
So
cia
l Co
nte
xt
Factor
Conditions
Business
Context
Related
Industries
Demand
Condition
Workers Politicians &
Bureaucrats
Entrepre-
neurs
Professionals
• Relatively strong in Industrial infrastructure, Quantity of Labor Force, and Personal
Competence of Entrepreneurs and Professionals
• However, weak particularly in Energy and Other Resources, Politicians, and Social
Context of Entrepreneurs
1
31
Simulation: Cost & Differentiation Strategies
32
Low
Medium
High
Competitive
Strategy
Cost
Strategy
Human
Physical
Workers
Factor
Conditions
Politicians &
Bureaucrats
Business
Context
Entrepreneurs
Related
Industries
Professionals
Demand
Conditions
Co
mp
eti
tiven
ess
Strategy Simulation
Differentiation
Strategy
33
Weights for Cost Strategy and Differentiation Strategy
C*: Cost Strategy, D*: Differentiation Strategy
Main Factors Weights
Sub-factors Weights
C* D* C* D*
Physical
Factors
Factor
Conditions 32/120 4/120
Energy Resources 1/2 1/2
Other Resources 1/2 1/2
Business Context 16/120 8/120 Structure 3/4 1/4
Strategy 1/4 3/4
Related Industries 8/120 16/120 Industrial Infrastructure 3/4 1/4
Coordination and Synergy 1/4 3/4
Demand
Conditions 4/120 32/120
Demand Size 3/4 1/4
Demand Quality 1/4 3/4
Human
Factors
Workers 32/120 4/120 Quantity of Labor Force 3/4 1/4
Quality of Labor Force 1/4 3/4
Politicians &
Bureaucrats 16/120 8/120
Politicians 3/4 1/4
Bureaucrats 1/4 3/4
Entrepreneurs 8/120 16/120 Personal Competence 3/4 1/4
Social Context 1/4 3/4
Professionals 4/120 32/120 Personal Competence 3/4 1/4
Social Context 1/4 3/4
34
11
15
18
32
12
13(13)
15
31
19
Korea
14
Japan
Strategy Simulation (2014): Korea•China•Japan
CS NS DS
Korea: higher with DS Japan: higher with DS China: higher with CS
19
17
Note: 1) NS: Neutral Strategy, CS: Cost Strategy, DS: Differentiation Strategy. 2) The upper number of each triangle is the
country’s ranking when its competitors keep their neutral strategies. 3) The lower number of each triangle is the country’s
ranking when its competitors have their optimal strategies.
China Korea
China
Japan
35
42
0
20
40
60
Ran
kin
g
10
30
50
37
DS Prediction Scenario : Korea•China•Japan
36
Comparison under Differentiation Strategy
• Under the Differentiation Strategy scenario, China surpassed Japan in 2011-12 for the first time
• In 2019, China will surpass both Japan and Korea (estimate)
30 31
28
24
26
23
22 20
18
21
20 22
20
22
17
14 16
15 15
10
15 14
16
20
23 22
19
0
5
10
15
20
25
30
2005 2006 2007 2008-09 2009-10 2010-11 2011-12 2012-13 2014-15 2017 2019
China
Korea
Japan
Present
Estimate
China Surpassed
Japan
China will Surpass
both Japan &
Korea
Contents
- BRICS case
- Absolute & Relative Created Competitiveness
Fundamental Source of Economic Growth
Conclusion
Theory, Methodology, and Results
Comparison of Three National Competitiveness Reports
37
BRICS case
38
BRICS case 2014-2015 (1)
These five countries have grown
significantly and are considered
important players in the global
economic scenario
0
2000
4000
6000
8000
10000
12000
14000
16000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Source: World Bank, www.worldbank.org/data/wdi, accessed Oct, 14, 2015
Rapid growth of the BRICS 11385
12736
Russia
Brazil
China
India
South Africa
7594
6478
1596 2535 2810
2375 1142 481
(GDP per capita)
-10
-5
0
5
10
15
20
BRICS GDP growth rate (annual %)
China
India
Brazil South Africa
Russia
Going up
Going down
However, it is observable that the
growth rate of China and India is
relatively higher than South Africa,
Brazil and Russia’s growth rate
39 Source: World Bank, www.worldbank.org/data/wdi, accessed Oct, 14, 2015
BRICS case 2014-2015 (2)
33
40 42 47
38
32 33 28
24 22 21 22
45
37 32
24 24 21 20
17 15 15 15 14
42
33
34
40 45 45 47 46 45 43
40 39
60 49 46
53
47 42
45 48 51
54 56 57
38 36 33 37 42 41 43 44 44 42 41
45
0
10
20
30
40
50
60
2001 2002 2003 2005 2006 2007 2008 2009 2010 2011 2012 2014
China
India
Russia
Brazil
South Africa
National Competitiveness Ranking (2001-2014)
BRICS Economies commonly
have affluent inherited resources
However, why are some
countries’ rankings continuously
going up but some are not?
Going up
Going down
Economic Growth And
India's Global Rise South Africa
heading for a recession July 14 2015 at 12:35pm
AUG 17, 2015 12:30 PM
Brazil's economy enters
recession 28 August 2015
World Bank Downgrades Russia’s
Economic Outlook Updated Sept. 30, 2015 4:01 p.m. ET
China’s economy is in big trouble,
but it isn’t collapsing AUG 25, 2015 12:30 PM
vs.
40
Competitive Structures of BRICS Countries (2014-2015)
• Russia/S.Africa/Brazil(Group3): higher in Factor Conditions, but lower in other factors compared to China and India (Group
1)
• China and India (Group 3 ) should further increase each factor of created advantages to increase national competitiveness
41
F1, 1 F4, 24
F3, 29
F2, 9
F5, 1
F6, 26
F7, 13
F8, 26
-10
10
30
50
70
0 5 10
China
F1, 6
F4, 20
F3, 52
F2, 25
F5, 44
F6, 36
F7, 7
F8, 9
-10
10
30
50
70
India
F1, 2
F4, 56
F3, 34
F2, 41 F5, 52
F6, 48 F7, 54 F8, 52
-10
10
30
50
70
Russia
F1, 24
F4, 49 F3, 53
F2, 59 F5, 61
F6, 55
F7, 56
F8, 32
-10
10
30
50
70
South Africa
F1, 5
F4, 39 F3, 51
F2, 55
F5, 46
F6, 53
F7, 31
F8, 56
-10
10
30
50
70
Brazil
Rank
Rank
Rank
Rank
Rank
Physical Factors Human Factors Physical Factors Human Factors
Physical Factors Human Factors Physical Factors Human Factors Physical Factors Human Factors
1 1
1 1 1
Created Advantage and Competitiveness (2014-2015)
Group 1
Group 3
Group 2 Group 4
Created Advantage
High
High
Low
Low
Inh
eri
ted
Ad
van
tag
e
Based on the IPS research, BRICS can be divided into two groups;
1) China, India are classified under the high Created Advantage group
2) Russia, Brazil, South Africa belong to the low Created Advantage group
India China
South Africa
Russia Brazil
La
rge
Gro
up
Stro
ng
1 Canada
2 United States
3 Australia
4 Germany
5 China
6 Japan
7 France
8 India
Inte
rme
dia
ry
1 Thailand
2 Philippines
3 Indonesia
4 Saudi Arabia
5 Vietnam
6 Russia
7 Mexico
We
ak
1 Egypt
2 Turkey
3 Brazil
4 Nigeria
5 Colombia
6 Argentina
7 Peru
8 Pakistan
9 Bangladesh
10 South Africa
11 Iran
Looking through the IPS Group Criteria,
• (Size) All BRICS economies belong to the Large Group
• (Competitiveness) China and India are included in the Strong Group. Russia is under the Intermediary Group while Brazil
and South Africa are in the Weak Group.
42
Absolute & Relative
Created Competitiveness
(10-year Ave.)
43
Absolute & Relative Created Competitiveness (10-year Ave.) (1)
Group1 High created advantage
without change
Group 2 High created advantage
with change
Group 4 Low created advantage
without change
Group 3 Low created advantage
with potential
Increase Rate of Created Advantage (Relative)
High
High
Low
Low
In
dex V
alu
e o
f C
reate
d
ad
van
tag
e (
10
- year
avera
ge)
• (Group 1) attains high absolute created advantage but without any change (e.g. developed countries)
• (Group 2) has high absolute created advantage and also high relative created advantage
• (Group 3) obtains high potential due to high relative created advantage despite of low average created advantage
• (Group 4) is characterized by both low absolute average absolute and relative created advantage but has high potential
44
45
Group 1
1 United States
2 Sweden
3 Hong Kong
4 Canada
5 Finland
6 United Kingdom
7 Australia
8 Israel
9 Germany
10 France
11 Austria
12 Taiwan
13 Japan
14 New Zealand
15 Korea
16 Italy
17 Spain
18 Hungary
19 Greece
Group 2
1 Netherland
2 Singapore
3 Denmark
4 Switzerland
5 Belgium
6 Thailand
7 China
8 Chile
9 Poland
10 Philippines
11 UAE
Group 3
1 Mexico
2 India
3 Panama
4 Czech Republic
5 Jordan
6 Kuwait
7 Indonesia
8 Saudi Arabia
9 Guatemala
10 Vietnam
11 South Africa
12 Dominican Republic
13 Oman
14 Turkey
15 Peru
16 Egypt
17 Nigeria
18 Kenya
19 Bangladesh
20 Cambodia
21 Iran
Group 4
1 Malaysia
2 Columbia
3 Brazil
4 Russia
5 Croatia
6 Morocco
7 Pakistan
8 Sri Lanka
9 Argentina
10 Ukraine
11 Venezuela
Absolute & Relative Created Competitiveness (10-year Ave.) (2)
46
Group1 Group 2
Group 4 Group 3
A
B
C D
stages of
economic growth
Link pin country
between A and B group
Link pin country between
B and C group
Link pin country between
C and D group
BRICS economies in
status quo
BRICS economies in
downfall
Remarkable
Emerging Economies
-Note-
Increase Rate of Created Advantage (% / 10-year average)
Ind
ex
Va
lue
of
Cre
ate
d a
dva
nta
ge (
10
- ye
ar
ave
rag
e)
BRICS economy
standing at a cross road
Absolute & Relative Created Competitiveness (10-year Ave.) (3)
BRICS
BRICS
BRICS
BRICS
BRICS
Contents
Fundamental Source of Economic Growth
Conclusion
Theory, Methodology, and Results
Comparison of Three National Competitiveness Reports
47
National/Corporate Goal
Conclusion
Source for Growth - Inherited vs. Created
Policy Tools - Simple vs. Comprehensive
Policy Direction - Blue Ocean vs. Benchmarking + alpha
48
Thank you
49