INDIAN INSTITUTE OF TECHNOLOGY ROORKEE

Technology Management

Chapter – 7 ( Competitiveness)

Prof. S. Rangnekar
Professor
DoMS, IIT Roorkee
2
Global Competitiveness Index 2018

3
4
5
India 58th (62.0)

• India is up five places, largest gain among G20 economies.

• India is able to accelerate on the pathway to innovation (rank

31st, score 53.8), due to quality of its research institutions.

• High degree of entrepreneurship (61.1, 23rd), business

dynamism is hampered by administrative hurdles.

• While Indian companies can access the 3rd largest market in

the world (100.0 on the Market size pillar), the country would
benefit from increased trade openness (136th) to drive
productivity growth.

6
• More investments will be necessary to spur innovation
beyond hubs of excellence and diffuse economic growth
more broadly.

• This includes continuing to widen the adoption of ICT

technologies (28.0, 117th) and improving the quality and
conditions of human capital across the country, taking
advantage of an extremely young population.

• India currently ranks 108th on the Health pillar and 96th on

the Skills pillar of the index.

7
Pillars of Competitiveness( World Economic Forum)

8
• Video

9
Competitiveness

Competitiveness is the process by which one entity strives to outperform another.

Whether the entity is a person, a corporation, or a country, the goal is to win.
Competition between business rivals within and outside the boundaries of a country
has intensified in recent times.

To be competitive, several factors must exist:

 Ability

 Desire to win

 Commitment or perseverance

 Availability of certain resources

10
The new buzz words for Competitiveness
S.no. Knowledge Attitude Skill Enhancement Habit Enhancement
Enhancement Enhancement

11
What makes a nation prosper?

• A nation’s standard of living (wealth) is determined by the productivity with

which it uses its human, capital, and natural resources. The appropriate
definition of competitiveness is productivity.
• Productivity depends on the value of products and services (e.g. uniqueness,
quality) and 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 reflects what both domestic and foreign firms choose to
do in that location (location of ownership is secondary)
• The productivity of all “local” industries is of fundamental importance to
competitiveness, not just that of traded industries
• Devaluation does not make a country more “competitive”, rather it reveals a lack
of fundamental competitiveness

12
National Competitiveness “policy
clusters”
External Regulatory Public sector
Competitiveness Competitiveness Competitiveness
1. Openness to 1. Attractiveness 1. Investment in
international trade of the domestic infrastructure
business 2. Security
environment
3. Education
2. Regulation
supportive of
efficient markets

Dangers: ideological bias (“liberalisation”) lack of economic analysis

Source: Weymouth and Feinberg
13
13
How can governments nurture competitiveness?

• Establish a stable and predictable macroeconomic, political, and

legal environment
• Improve the availability, quality, and efficiency of general
purpose inputs, infrastructure, and institutions
• Set overall rules and incentives governing competition that
encourage productivity growth
• Facilitate cluster development and upgrading
• Create an explicit, ongoing process of economic change and
competitive upgrading which informs citizens and mobilizes the
private sector, government at all levels, educational and other
institutions, and civil society.

14
14
Determinants of competitiveness
(Porter)
• Macroeconomic
competitiveness:
– Social infrastructure
and political
institutions
– Macroeconomic
policies
• Microeconomic
competitiveness:
– Quality of business
environment
– State of development
of clusters
– Sophistication of
company operations
and strategy
15
The Competitiveness Pyramid

16
Social‐competitive innovation pyramid
(Molteni, 2006)

17
Contd…

Level 1: social‐competitive synthesis

Can we satisfy social expectations by integrating them into corporate strategy, i.e. making them a means
to corporate development?

Level 2: in‐context action

Can we change the rules of the game by imposing new modes of behaviour on the whole sector ?

Level 3: sustainable social cost

Can the economic performance of a company allow the necessary costs to satisfy social expectations? If
the answer is yes, we could say we are talking about sustainable social cost.

Level 4: acceptable compromise

Compromise between social objectives and short‐term performance objectives that are at least acceptable
to everyone involved.

Level 5: temporary sacrifice of social expectations

If a reasonable compromise cannot be found, then the temporary sacrifice of social expectations that
were originally identified may be necessary. This is not a complete refusal to satisfy social expectations
other than those legally necessary.
18
Development factors in Social Competitive
Synthesis (Molteni, 2006)

19
Management of Technology and Global
Competitiveness

• Create an economic growth

policy.
• Provide an infrastructure to
support technological
At the enterprises, the facilitation of
commerce & trade and
macro planning for human resource
development.
• Encourage cooperation between
level, government, industry, and
education and research
countries institutions.
• Support technological
innovation and develop plans to
must be enhance creativity and support
R&D activity.
able to: • Promulgate necessary
unburden some legislation and
but

regulation measures to protect

the environment and strengthen
social structure.

20
The Ten Golden Rules of Competitiveness

Rule I : Create a stable and predictable legislative and

administrative environment.

Rule II: Ensure speed, transparency and accountability in the

administration as well as ease of doing business.

Rule III:Invest continually in developing and maintaining

infrastructure both economic and social.

Rule IV: Strengthen the middle class.

Rule V: Develop privately owned medium enterprises

21
Contd...

Rule VI:Maintain a balanced relationship between wage level,

productivity and taxation.

Rule VII: Develop a local market by promoting private savings and

domestic investment.

Rule VIII: Balanced aggressiveness in international market.

Rule IX: Counterweight the advantages of globalization with the imperatives of

proximity to preserve social cohesion and value system.

Rule X: Always return the tangible signs of successful competitiveness to the

people by providing a higher level of prosperity for all

22
Factors of the Comparative Strength of a Nation’s
Technical Enterprise (Lee and Reid, 1991):

Synergy
between
Scale of
basic
domestic
research
markets
and
and the
Ability to downstrea
Strength Presence Strength of openness
cultivate m
of the Quality of of a large information of global
individual technical
national technical pool of technology markets as
creativity activities
research education. technical infrastructu engines
and such as
enterprise. talents. re. for
initiative. design
innovatio
and
n and its
productio
commerci
n
alization.
capabilitie
s.

23
Contd…

Ability to continually
Collaboration between National savings and the
modernize plant and
industries and universities level of investment in
equipment in private
and the government. industrial modernization.
industry.

The development of the

National policy supporting necessary human, physical,
initiatives to enhance financial, regulatory, and Public support of generic
adoption, adaptation, and institutional infrastructures and domestically developed
diffusion of technology and to attract individuals, technologies.
related know-how. companies, and institutional
entities.

24
Competitiveness Enhancing Manufacturing
Technologies
The Competitiveness- enhancing Manufacturing
technologies are
Machine Tools

Flexible Manufacturing

Computer Aided- Design

Automated Inspection

Material Handling Robots

Automated Warehouse Equipments

25
The Case of Japan
Japan is a classic example of a country that was able to change the map of
international competitiveness. Factors contributing to Japan’s success include

 Thoughtful strategic planning

 The planned transfer of technology
 Targeting of niche products and markets
 Teamwork and excellent execution
 Commitment and the desire to win.

26
The Case of Singapore

Singapore faced three main problems:

1. Small domestic market,

2. Limited natural resources
3. Limited supply of indigenous human
resources.

Singapore used three strategic approaches to overcome these problems:

1. Serving as a regional business service hub for other nearby nations.

2. Engaging in niche specialization.
3. Acting as a home base and R&D hub for global firms.

27
Case: Emergence of The Tigers

Global competition intensified in the mid-1980s with the

emergence of a host of newly industrialized countries
(NICs) that became known as “the Tigers.”

Korea, Taiwan, Singapore, and Hong Kong led the way in

developing their economies.

They were followed by a number of other Asian and

Latin American countries that relied on foreign
investment and the transfer of production and mature
technologies to fuel their countries’ economic growth.

28
Competitiveness and Human Resource

The
philosophical
constructs
Cooperation High Employee
underlying the
among quality involvemen Leadership
human-
business, education t and at all Team Work
resource
labour and and Empowerm Levels
aspects of the
Government training ent
competitiveness
of Germany
and Japan are

Hence, The Competitiveness of a Nation largely depends on the skills and

capabilities of its People i.e. Human Resource acts as the driver to gain competitive
edge.
29
Competitiveness : The Game of Nations

Nations of the world are engaged

in an economic game.

It can develop its strategies of

playing the game. The rules of
They compete for resources
the game are set through
and for the means to harness
international bodies. They are
their resources into production
set based on intensive
endeavors.
discussions, negotiations, and
agreements.

The game of nations is like a

football game. All nations are
Each nation has its team,
invited to participate. Each
consisting of its citizens. It
nation’s goal is to win. The
has its coaches, the leaders of
trophy is wealth creation and
its government .
an increased standard of
living.

30
Competitiveness of Firms: The Micro Level

• Develop a culture to appreciate value of technology

• Understand the dynamics of the process of
To become technological innovation
• Monitor and forecast technological changes
or to remain • Develop and adopt effective methodologies to
measure the impact of new technologies.
competitive, • Facilitate the implementation of new technologies
• Prepare, train, and hire the proper workforce to
firms must implement new technology.
• Develop an organizational structure for effective
be able to : implementation of technological changes.
• Develop an appropriate reward system for
employees and managers.

31
Thanks

32