Entrepreneurship, Innovation, and Competitiveness Professor Michael J. Enright Enright, Scott & Associates University of Hong Kong Hong Kong Institute.
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• The global economy is a tough environment and it promises to become only tougher in the future.
• Many of today’s problems have arisen because individuals, companies, and nations have tried to borrow, rather than earn their prosperity.
• More and more countries are entering international competition in more and more industries.
• Globalization and the rise of the “Flat World” are making enhanced competitiveness vital for all nations.
• The simple fact is that individuals, companies, and nations have to improve their competitiveness if they are to achieve a prosperity that is sustainable.
• “Competitiveness equals productivity. Productivity should be the central goal of economic policy.” - Michael Porter
• “Productivity isn’t everything, but in the long run it is almost everything.” - Paul Krugman
• “Competitiveness is the set of institutions, policies, and factors that determine the level of productivity of a country.” – WEF
• A New Competitiveness Index, The ESA Productivity Competitiveness Index (EPCI)TM
– GNI / Pop(15-64) with highest value scaled to 100– One year snapshot and 3 year rolling average– Coverage 172 countries 1990-2014– Simple, performance only, measures productivity
• Competitiveness reports are extremely useful as sources of data– WEF, IMD, CASS, IFC, WB KEI, HF, FI, UBS, Mercer, GEM, etc.
• But one must use the right comparisons and benchmarks– Versus the “world’s best” is relevant for only a few countries– Need to use the right benchmarks and sequencing
• ESA benchmarks – Past performance /Comparators / Competitors / Customers – What countries can we learn the most from?
• ESA takes the benchmarks and compares across a huge range of variables to find the gaps, opportunities, advantages, disadvantages
• ESA then prepares a detailed, country-specific, step-by-step roadmap to achieve improvement
• Generates value through developing and leveraging knowledge, IP, and intangible assets
• The K-I-C economy includes– Science and technology-based business– Innovative service sectors / Creative and cultural industries– Use of advanced technology in “low-tech” and “mid-tech” industries– Brand development– Improved processes– New business models / marketing, distribution, management systems
• Any industry can be knowledge-intensive, innovative, creative
• Those that leverage the K-I-C economy benefit from the “Flat World,” those that don’t face difficult price competition
• Entrepreneurs (and intrapreneurs) do the work of the K-I-C economy
• They combine new products, or new services, or new ways of doing things with productive resources and market demand
• Entrepreneurship involves the epitome of the K-I-C economy
• Entrepreneurial activities are the most knowledge-intensive, innovative, and creative activities carried out by the firm
• This is why the factors that influence entrepreneurship are so crucial to developing a K-I-C economy, enhancing productivity, and improving competitiveness
• An extremely valuable perspective on competitiveness
• Related to the original Competitive Advantage of Nations Study at Harvard Business School (1990)– Focus on attitudes towards entrepreneurship and innovation– Use of factor-driven, efficiency-driven, innovation-driven, (wealth-
driven) stages of development
• Related to IFC Ease of Doing Business, WB Knowledge Economy– Basic requirements /Efficiency enhancers– Knowledge and innovation economy
• Adds variables specifically related to entrepreneurship obtained through extensive surveys– Early-state entrepreneurial activity– Entrepreneurial employee activity– Social entrepreneurial activity