The role of institutions in enhancing international competitiveness

Dr Densil A. Williams, Mona School of Business

Competitiveness at the micro and macro levels is important to any nation. National competitiveness is concerned with making sure that the environment is enabling for enterprises to operate. The firm's competitiveness is concerned with operating at international standards of cost, service quality, financial performance, among other things, in addition to winning market share over competitors in competitive markets. Indeed, competitiveness is important if firms are to ensure their long-term survival and, also, if the nation is to ensure the improved living standard of its citizenry.

In a world economy where uncertainty is the only certainty, it is important for both national policymakers and business executives at the firm level to put into place strong fundamentals to drive the growth and development of economic sectors and private enterprises. Institutional support will be critical to getting these fundamentals right. Strong institutions are needed to carry out research and innovation in order to inform the policy discourse about which fundamentals are crucial for delivering optimal growth.

An important supranational institution that has been helping countries in this regard for the last three decades is the World Economic Forum through its flagship publication, The Global Competitiveness Report. The report provides detailed assessments of the productive potential of a nation based on data collected from executives in more than 130 countries. The Executive Opinion Survey, which is administered by institutes which are partner to the World Economic Forum (the Mona School of Business is the partner in Jamaica), provides the basis for the analyses and recommendations put forward the in highly influential report which is published annually.

According to Klaus Schwab, the executive chairman of the World Economic Forum: "The report is a contribution to enhancing the understanding of the key factors determining economic growth and to explaining why some countries are more successful than others in raising income levels and opportunities for their respective populations; hence it offers policymakers and business leaders an important tool in the formulation of improved economic policies and institutional reforms."

Crucial input

There is no doubt that the input of business executives through the Executive Opinion Survey is crucial for the publication of the report. Therefore, it is important that business executives take this task seriously as the data they provide will help to inform policy recommendations for growth and reform of economic sectors and private enterprises.

The report provides a rich source of data for business executives and economic policymakers to compare their performance with others from across the world. It contains detailed profile of more than 130 economies and also provides and an extensive section with data tables of global rankings of the countries contained in the report. This information will help business executives and economic policymakers to understand how others are performing relative to their business or the economy as a whole.

Indeed, such information is invaluable as economic policymakers or business executives will know which countries to benchmark in order to improve their own level of competitiveness at the firm level or at the level of the economy. Competitiveness is everybody's business. Michael Porter, a renowned authority on competitiveness puts it nicely - "everything matters for competitiveness".

The interpretation behind Porter's pronouncement is that government, private sector and, non-governmental sectors that are not for profit will have to play their part in enhancing the competitiveness of their local economies. They can start by providing valuable insights through the Executive Opinion Surveys in their domestic location. This information will feed into the general report where analyses and recommendations will be made and then fed back to the different stakeholders who can use them into the formulation of business and economic policies and strategies.

The World Economic Forum is an independent international organisation committed to improving the state of the world by engaging leaders in partnerships to shape global, regional and industry agendas. www.weforum.org.

Mona School of Business is a partner institute of the World Economic Forum and the Executive Opinion Survey is conducted annually in conjunction with the Private Sector Organisation of Jamaica. For further information, contact Ms Pat Doucre- 977-6035, 9777174.

It is important that business executives take their task seriously as the data they provide will help to inform policy recommendations for growth and reform of economic sectors and private enterprises.