Is a “competitive” nation a nation whose exchange rate makes the prices of its commodities competitive in international markets? Germany and Japan have remarkably raised their standard of living – and have experienced prolonged periods of hard currency and rising prices. Is a “competitive” nation a nation with a largely positive trade balance? Switzerland has roughly balanced trade; Italy has a chronic trade deficit – both countries are enjoying a sharp increase in national incomes. Is a “competitive” nation a low-labor-cost nation? Both India and Mexico have low wages and low labor costs – but neither seems to be an attractive industrial model. As competitive markets lower prices, resources are freed up that a consumer can spend on other goods and services. For example, instead of having to spend the excess of their money on the right X, they now have money that they can also spend on service Y. This strengthens business and employment in more industries in the economy. We selected a sample of industries for each country that represented the main groups of competitive industries in the economy. The industries studied accounted for a large part of each country`s total exports: more than 20% of total exports to Japan, Germany and Switzerland, for example, and more than 40% to South Korea. We looked at some of the most famous and important international success stories – German high-performance cars and chemicals, Japanese semiconductors and VCRs, Swiss banks and pharmaceuticals, Italian footwear and textiles, American commercial aircraft and films – and some relatively obscure but highly competitive industries – South Korean pianos, Italian ski boots and British biscuits.
We also added a few industries because they seemed paradoxical: Japanese demand for Western typewriters, for example, is almost non-existent, but Japan has a strong export and foreign investment position in the industry. We have avoided industries that were heavily dependent on natural resources: these industries are not the backbone of advanced economies, and the ability to compete with them is more explainable with classical theory. However, we have included a number of more technologically intensive industries related to natural resources, such as newsprint and agrochemicals. Ironically, it is also strong domestic competition that ultimately puts pressure on domestic companies to examine global markets and makes them harder to succeed. Especially when there are economies of scale, local competitors force each other to look outward in foreign markets in order to achieve greater efficiency and profitability. And after being tested by fierce domestic competition, the strongest companies are well equipped to win abroad. While Digital Equipment can stand up to IBM, Data General, Prime and Hewlett-Packard, it doesn`t seem so intimidating to compete with Siemens or Machines Bull. While there are undoubtedly examples of entrepreneurs striving to start new businesses in environments where competition is stifled and there are monopolized markets, there are many other examples of potential entrepreneurs who have simply never tried to achieve their vision.
Why would an aspiring business owner take a financial risk and try to start a business when their competitor receives subsidies and tax breaks from the government? Why try something new when competitors have been given monopoly power? The example of Japanese car manufacturers also illustrates two additional conditions for a sustainable competitive advantage. First, a company must take a holistic strategic approach. It must sell its product worldwide under its own brand through the international marketing channels it controls. A truly holistic approach may even require the company to set up manufacturing or R&D facilities in other countries to benefit from lower wage rates, maintain or improve market access, or take advantage of foreign technologies. Second, creating more sustainable benefits often means that a company needs to make its existing advantage obsolete – even if it`s still an advantage. Japanese car manufacturers have recognized this; Either they would make their advantage obsolete, or a competitor would do it for them. According to Michael Porter`s analysis, the only important factor in creating national competitiveness is productivity. This means that labor and capital must be arranged in such a way that labor can produce maximum production with minimal capital investment. Therefore, neither human nor natural resources are decisive factors for national competitiveness in themselves. However, how productively they are used is the most important determinant that puts one nation in better economic shape than the other.
In a world of increasingly global competition, nations have become more important, not less important. As the basis of competition has shifted more and more towards the creation and assimilation of knowledge, the role of the nation has increased. Competitive advantages are created and maintained through a highly localized process. Differences in national values, culture, economic structures, institutions and histories contribute to the success of the competition. There are glaring differences in competition patterns between countries; No nation can or will compete in any or even most industries. Ultimately, nations succeed in certain industries because their home environment is the most forward-thinking, dynamic, and challenging. A new theory must go beyond comparative advantage to achieve a nation`s competitive advantage. It must reflect a rich idea of competition that includes segmented markets, differentiated products, technological differences and economies of scale. A new theory must go beyond costs and explain why companies in some countries are better than others to create benefits based on quality, functionality and new product innovations. A new theory must assume that competition is dynamic and evolving; It must answer the following questions: why are some companies based in certain countries more innovative than others? Why do some countries offer an environment that allows companies to improve and innovate faster than their foreign competitors? It is also important to understand that national competitiveness may only apply to a few industries. This means that although Germany has a strong economic backdrop, there are several industries in Germany that are not really competitive internationally. Here, the country must decide to focus on its core competencies.
If some goods are produced more efficiently outside the country, it may be preferable for a nation to import them. The Japanese government understands this role better than anyone else – including the fact that nations are going through phases of competitive development and that the proper role of government changes as the economy progresses. By stimulating early demand for advanced products, confronting the industry with the need to launch cutting-edge technology through symbolic cooperation projects, introducing awards that reward quality, and pursuing other policies that strengthen the powers of diamonds, the Japanese government is accelerating the pace of innovation. But like government officials around the world, Japanese bureaucrats can make the same mistakes at worst: they try to manage the industrial structure, protect the market for too long, and give in to political pressure to protect inefficient retailers, farmers, traders, and industrial enterprises from competition. In each country, the study consisted of two parts. .