Published on The Malta Independent¸ issued 20th February 2011
Meet the new buzzword¸ competitiveness. Who will be the next Indiana Jones that succeeds in lifting the mysterious veil concealing the myth of competitiveness? This is the new quest for the Holy Grail.
Politicians have been waxing lyrical about the golden path to achieve better GDP growth¸ but really and truly the journey is long and rewards elusive. Globalisation has sharpened competition. As a general comment¸ one can state that due to the effect of globalisation¸ organisations in all spheres must compete to deliver added export value. Many ask what Malta can do to lift itself out of the comparatively low standing in the global competitiveness index. The answer is simple: there is a lot of do both at company and at state level. We have achieved a lot since Independence but more is needed.
Certainly there is no magic solution to ease the hard work needed to improve operational efficiency and perk up our comparative low standing. It is best to stop and ask ourselves what constitutes competitiveness. To answer this question one can define it as a quality usually equated with solving macroeconomic issues (such as changes in interest rates¸ inflation or taxes) or microeconomic issues (such as low quality of entrepreneurship and excessive bureaucratic regulations on business). Both macro and micro issues need to be effectively tackled in the best way possible.
To respond effectively to the exigencies of a global market¸ firms need to develop a range of export capabilities in the areas of technology¸ marketing¸ management¸ human resources¸ finance¸ and continuously upgrade them over time. However¸ building business competitiveness – particularly for export markets – also has to involve both government and trade support institutions in a collective effort. Only this way can a coherent competitiveness strategy¸ tailor-made to national circumstances be born. This has a major influence in the creation of business competitiveness in a globalised environment.
More then ever¸ there exist powerful factors that are driving globalisation such as falling trade barriers¸ fast-paced technological advances¸ declining communications and transport costs¸ international migration¸ and highly mobile investment. The cliché goes that firms are facing never-ending demands urging them to improve their value chain. At this stage one can comment that adding “Value “is the ability to meet or exceed the needs of customers¸ and do so efficiently. Firms have to deliver value to their customers by way of services or products and countries have to deliver value as business locations. Reading textbooks about competitiveness¸ we remember them telling us that a close and active business-government partnership is the linchpin of a well-managed national competitiveness strategy. Traditionally¸ business focuses on increasing profits¸ while government formulates and implements strategy. United they can foster higher GDP growth¸ reduce debt and achieve better employment prospects.
Yet¸ accessing new resources and markets while mitigating the risks of intensive competition calls for a new kind of relationship between business and government. In this context¸ promoters of TuneMalta wish to play a modest role in running a reliable competitiveness strategy. This initiative is co-funded by a grant to improve competitiveness paid out of the European Regional Development Fund. (ERDF) This forms part of the Competitiveness Grant Sch