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What makes a country competitive?
What makes a country competitive?
Columns
Grace Virtue  
July 19, 2015

What makes a country competitive?

The murder and mayhem in the country recently reminded me of the late 1970s when terror stalked the land and every day was a new nightmare pummelling the psyche of an already traumatised nation.

Politicians and the quest for power was behind most of that. The country has stubbornly refused to fully examine that period or to hold accountable some of those widely believed to have been involved in unsavoury activities. Perhaps, when they are all safely dead a commission of inquiry will be installed to ask of others what we could have asked directly of the individuals themselves.

Why does it matter? Because the extreme devaluing of human life — Jamaican life — began or was seriously aggravated during that period. It was made acceptable to take people’s lives simply to get them out of the way. A life was rendered no more valuable than a vote or a plate of curried goat. A part of the struggle we face today is how to reset the switch on the sanctity of human life, and how to teach conscience to a swathe of the population that has none.

With or without acknowledgement or accountability, how far have we come since then? What answers have we arrived at to the questions of the causes of chronic violence? What solutions have those answers led to? Since the start of the year, more than 600 people have been murdered in a small country constantly at war with itself. How does this impact the country’s competitiveness in the global marketplace?

So much has changed in the world over the past 40 years. This includes the diminution of whatever geo-political strategic relevance we might have had during the Cold War years when Washington, or the Soviet Union, was willing to court our friendship to advance their agendas in the Caribbean or the Third World. The Soviet Union ceased to exist more than 20 years ago, and yesterday the Cuban flag was raised in Washington, DC, for the first time in 54 years, as the country of 11 million people, located 90 miles from Jamaica, normalises relationships with the United States. What has not changed is our propensity to kill each other; none of our dominant institutions — family, education system, security system, church, or other agents of civil society — have been able to make any real impact on the social conditions that breed, in excess, sociopaths and other degenerates.

In the face of rapid changes, we continue to struggle with social degeneration. At the same time, we dream of attracting well-thinking investors from safer shores to put their money in our economy to help us achieve growth. I wonder sometimes if what we are looking for is altruism — people to invest in our country just to be kind; or because it is beautiful, produces great athletes, gave birth to reggae music and throw great parties.

Are these our competitive advantages? We speak English too, in some contexts, but Cuba is Spanish-speaking, and that will in no way negate its appeal to any section of the world.

Michael Porter, director of the Institute for Strategy and Competitiveness at the Harvard Business School, says national competitiveness is created, not inherited. He defines the competitive advantage of a nation as its capacity to entice firms (both local and foreign) to use the country as a platform from which to conduct business. At a basic level, the country must be relatively safe for its citizens and the investors it hopes to attract. It must have efficient systems, like public transportation and others, relevant to the kind of industries we hope to attract. Beyond that, Porter establishes what he calls the four diamond of national competitiveness: the existence of resources (human resources and research and information infrastructures); a business environment that invests in innovation; a demanding local market; and the presence of supporting industries. Where are we on any of these measures?

Switzerland, a central European country of approximately eight million people, consistently ranks among the most competitive in the world. Over the past 40 years, its homicide rate has varied between 46 and 110 cases per year. Among the competitive advantages it has created for itself are: “stable, transparent and effective institutions; sound and healthy public finances; an attractive tax regime; excellent infrastructure and connectivity; a world-class education system; relatively peaceful relations among social actors within a flexible labour market; the highest level of business sophistication; and, most importantly, an exceptional capacity for innovation”, according to the World Economic Forum (WEF) Global Competitiveness Report 2014-2015.

Innovation is the main source of long-term growth in advanced countries and Switzerland, with the highest international patent application rate per inhabitant in the world, is among the most innovative. “After decades of visionary policies and smart investment, Switzerland has created a conducive ecosystem that favours innovation. Talent is at the heart of this ecosystem and powers it. Several indicators in our competitiveness index show that Switzerland makes good use of human capital — its greatest asset,” said the report.

Switzerland ranks first for the quality of the education system, the collaboration between employees and employers, as well as for “the capacity to retain and attract talent”. It has a dual vocational and education training system which promotes and values apprenticeship. The most striking result of this is its effect on youth unemployment which is at eight per cent in Switzerland, compared to 25 per cent in Europe and 50 per cent in some countries.

In the next two decades or so, I predict our neighbour, Cuba, will rival Switzerland in innovation, particularly in technology, biomedicine and pharmaceuticals. The foundation is already laid; all it will take is continued persistence and clarity of purpose.

We need to figure out our competitive advantages, a process which must include separating public relations from operations, and we must figure out how to make education work better to reduce deviance, promote productivity and build a more cohesive society.

Grace Virtue, PhD, is a social justice advocate.

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