Global competitiveness and technological developments | Management Optional Notes for UPSC PDF Download

Introduction

In the present business landscape, various challenges such as escalating unemployment, dwindling profits, rising costs, and an uncertain future demand strategic solutions. One alternative gaining prominence is the pursuit of global competitiveness. Simply put, this concept revolves around a nation's ability to create and maintain an environment that facilitates value creation for businesses and prosperity for its citizens. 

According to the World Economic Forum, a key metric for gauging this capability is a country's sustained high rates of growth in Gross Domestic Product (GDP) per capita. In essence, only nations boasting elevated levels of productivity can aspire to be domestically and globally competitive. The crux lies in their capacity to offer quality products and services at competitive prices, ensuring satisfactory returns. This competitiveness extends to various levels, encompassing individual firms, specific industries, and entire countries, involving a comparative analysis of their abilities and performances. In addressing contemporary business challenges, this focus on global competitiveness emerges as a pivotal strategy for fostering long-term growth, sustaining employment, and enhancing real income.

Importance of Global Competitiveness

Significance of Global Competitiveness Simplified

1. Boosting Productivity:

   • Enhances the efficiency and output of businesses.

2. Attracting Foreign Investments (FDIs):

   • Encourages foreign companies to invest in the country.

3. Improving Living Standards:

   • Aims to elevate the quality of life for the people.

4. Balancing Import-Export Trade:

   • Focuses on maintaining a equilibrium in a country's trade activities.

5. Ensuring Macroeconomic Stability:

   • Strives to achieve stability in the overall economy.

6. Promoting Economic Development:

   • Contributes to the overall growth and progress of the nation.

Essentials for Global Competitiveness

1. Economic Policies:

   • Economic policies encompass the strategies and measures employed by a government to manage the overall economy. These policies include monetary policy, fiscal policy, trade policy, and industrial policy. A conducive economic environment is essential for businesses to thrive and compete globally.

2. Government Oversight:

   • Governments play a crucial role in overseeing businesses and creating an environment conducive to competitiveness. This oversight involves ensuring fair competition, enforcing regulations, and providing necessary support and infrastructure for businesses to operate efficiently.

3. Business Costs:

   • The cost of doing business includes expenses such as taxes, labor costs, regulatory compliance, and infrastructure costs. To enhance competitiveness, it's essential to minimize these costs while maintaining quality and efficiency in operations.

4. Education and Skills:

   • A skilled workforce is critical for innovation, productivity, and competitiveness. Investing in education and skills development programs ensures that the workforce is equipped with the knowledge and skills required to adapt to technological advancements and meet the demands of a globalized economy.

5. Innovation and Research:

   • Innovation drives competitiveness by enabling businesses to develop new products, processes, and technologies that set them apart in the global market. Research and development (R&D) activities foster innovation and help businesses stay ahead of the competition.

6. Environmental Responsibility:

   • Sustainable environmental management is increasingly becoming a key factor in global competitiveness. Businesses need to adopt environmentally friendly practices to reduce their carbon footprint, minimize waste, and comply with international environmental standards.

7. International Standards:

   • Adhering to international standards and regulations is essential for accessing global markets and building trust with customers and partners worldwide. Compliance with quality, safety, and environmental standards demonstrates a commitment to excellence and enhances competitiveness.

8. Overall Productivity:

   • Productivity measures the efficiency of resource utilization in production processes. Improving productivity through technological advancements, process optimization, and workforce training is essential for enhancing competitiveness and profitability.

Government's Role

• Business-Friendly Practices:

  • Governments can promote competitiveness by implementing business-friendly policies, streamlining regulations, and reducing bureaucratic barriers that hinder business growth and innovation.

• Reducing Bureaucracy:

  • Simplifying administrative procedures and minimizing red tape can make it easier for businesses to operate, access resources, and engage in international trade and investment.

• Integrated Network:

  • Facilitating collaboration and partnerships between government agencies, private sector enterprises, academic institutions, and research organizations can foster innovation, knowledge sharing, and technology transfer.

• Accountability and Integrity:

  • Ensuring transparency, accountability, and integrity in public service and governance practices builds trust, promotes investor confidence, and creates a conducive environment for sustainable economic development.

Challenges for Manufacturers

• Global Issues:
  • Manufacturers face various challenges on the global stage, including intense competition, rapidly changing market dynamics, supply chain disruptions, and regulatory complexities.

Case of Nigeria

• Operational Problems:
  • Nigeria, like many other developing countries, faces challenges such as infrastructure deficits, limited access to financing, political instability, corruption, and inadequate institutional capacity, which hinder its competitiveness in the global market.

Strategies for Global Companies

• Knowledge Utilization:

  • Leveraging a diverse knowledge base, global networks, and internet technology enables companies to compete effectively against international rivals without significant capital investment or physical presence in multiple markets.

• Minimal Investment:

  • By harnessing digital technologies, outsourcing certain functions, and leveraging collaborative platforms, globally competitive companies can achieve growth and expand their market reach without incurring substantial upfront costs or extensive travel expenses.

Technology Development

Technology and Global Competition Simplified

1. Role of Technological Innovation:

   • In the era of knowledge development, technological innovation is seen as the key driver for gaining and sustaining a competitive edge.

2. Two Ways to Advance Technology:

   • Theoretical models highlight two methods: innovation (creating new technologies) and adoption (using technologies developed elsewhere).

3. Benefits of Technology Adoption:

   • Adopting technology from abroad significantly improves living standards and contributes to long-term growth by leveraging innovations achieved elsewhere.

4. Limitations of Technology Adoption:

   • While technology adoption promotes economic growth, it has its limitations. Progress in global business can lead to new goods, services, jobs, and capital, but there are challenges.

5. Productivity and Quality Improvement:

   • Applying technology enhances productivity and improves product quality. It also expands the range and geographic distribution of services.

6. Impact on International Trade:

   • Technology influences international trade patterns by affecting the comparative advantages of business sectors. It's not solely determined by economic conditions but can be influenced by various factors.

7. Globalization of Economy:

   • The global economy is rapidly integrating due to factors like political decisions favoring liberalization, market-oriented economies, free flow of capital, and rapid technological changes, especially in information and communication technology.

8. Trade Liberalization and Deregulation:

   • The closer integration of domestic and international markets is driven by trade liberalization and deregulation, leading to a more interconnected world.

9. Advancements in Electronics, Biotechnology, and Material Sciences:

   • Rapid developments in these fields result in new products and services that replace or entirely transform existing ones.

10. Factors Contributing to International Competition:

    • Multiple factors, including technological, political, and economic factors, contribute to the progress of international competition.

11. Global Nature of Industries with Technological Advancements:

    • Industries experiencing rapid technological advancements are inherently global. Production facilities can be located anywhere, leading to converging consumer demands across different countries.

In summary, technology plays a crucial role in global competition, with innovation and adoption driving advancements. While technology adoption brings benefits, it also poses challenges. The integration of the global economy is fueled by political decisions, technological changes, and trade liberalization. Advancements in key fields contribute to the emergence of new products and services. Various factors, including technology, influence international competition, making industries more interconnected globally.