Competitiveness in the 21st century: Reflections on the Growing Debate about Globalization

Abstract

INTRODUCTION The 21st century is here and our prognostications about the future are being realized. Nowhere have our predictions been more optimistic than in our discussions of global competitiveness. Competitiveness is, by definition, inextricably linked to globalization, because it is assessed for nations (as well as for firms) in a global context. While the benchmarks for national competitive advantage would be other nations, firm-level competitiveness is assessed in the context of competitors in a global industry. While these points are better illustrated in Figures 1 & 2, we wish to remind the reader that in our discussions we have used the terms (i.e., competitiveness, globalization) interchangeably, often referring only to one, while implying both. [ILLUSTRATIONS OMITTED] Researchers, managers and public policymakers have predicted that tomorrow's global economy will be entrepreneurial based and environmentally sensitive. They also expect our growing global economy to have room for all, ensuring a greater focus on human development and progress. Countries, whether developing or already advanced, are also expected to give the cultivation of knowledge and intellect greater attention than ever. This is, of course, a great idyllic vision of things to come. No one should be left out of tomorrow's global economy; there should be no poverty, disease, human dislocation, homelessness or hopelessness. But in fact, the gap between dreams and reality remains wide. Globalization creates bountiful opportunities for nations and their citizens, but it creates formidable challenges that induce political and cultural tensions. Few have been willing to explore the challenges that globalization poses. And, nobody wants to deliver bad news. However, much is at stake, and an open dialogue is important to guide decision-makers and promote effective policy-making. There are already several discordant voices that are attempting to draw attention to the downsides of globalization and western-based notions of competitiveness. The violent clashes that occurred in the World Trade Organization (WTO) meetings in Seattle and, more recently, the International Monetary Fund (IMF) and World Bank annual Spring meetings in Washington, D.C., are notable examples. There are of course, other less visible forces and voices that have sought to highlight the need to craft different models of globalization than those widely adopted in the U.S. and elsewhere in the West. This article addresses the darker side of globalization and the challenges it places on national institutions, firms, and individuals. We believe that awareness of these challenges can be useful in mapping effective strategies that ensure that the predicted gains from tomorrow's economy come to fruition. We are avid proponents of both globalization and competitiveness and recognize their critical importance for the changing global economy. However, our intent is to make sense of the debate and propose effective and sustainable ways of promoting globalization and competitiveness. Based on existing portrayals, our framework on competitiveness (laid out in Table 1) discusses it at three different levels--namely that of the nation-state, that of the firm, and finally that of the individual. For each of these levels, we discuss the defining concepts, the dimensions associated with competitiveness, the factors that have been predicted to influence competitiveness, and the benefits and the downsides resulting from increasing competitiveness. We then offer two related developmental frameworks (shown in Figures 1 & 2) that portray the sequence of events leading to enhanced firm and national competitiveness. We then lay out a set of guiding principles that advocate the need for balanced, variegated approaches to enhancing competitiveness, while emphasizing the need for institution-building and entrepreneurship. The conclusion section reiterates the gist of our message regarding global competitiveness and its implications. …