Chair of Global Economy & Foreign Affairs

Olga V. KorneikoPhd, Senior Lecturer

Course :The Competitiveness of national economies

Lecture 1: Introduction. Framework of Competitiveness

VSUES

You are highly encouraged to take notes during the lecture!

The questions:

Why do nations compete?What kind of problems do national economies have to

resolve to improve their international Competitiveness?

Do competitive firms come from competitive nations ?How do we measure Competitiveness?Are there any differences between firm

Competitiveness and national Competitiveness?What determines Competitiveness of nations today?

And what will determine it in the future?

The questions for you:

What do you know about Competitiveness?

What do you think it means?

What famous names come to your mind when you hear the term Competitiveness?

Competitiveness is still one of the most

misunderstood concepts.

What do you mean by Competitiveness?

1983 -1987

The term Competitiveness

appeared more than 5700 times.

Competitiveness

Competitiveness on macroeconomic level

1) Competitiveness as productivity;

2) Competitiveness as capacity to create well-being;

3) Competitiveness as ability to sell on external markets.

Competitiveness on macroeconomic level

1) Competitiveness as productivity;

2) Competitiveness as capacity to create well-being;

3) Competitiveness as ability to sell on external markets.

Michael Porter and World Economic Forum:

• The national Competitiveness as a set of

factors, policies and institutions that

determine the level of the productivity of a

country.

United States

• Population: 313,232,044 (July 2011 est.) • GDP per capita: $ 48,112 (2012)• GDP: $15,290,000,000,000• Number of Billionaires: 442

Rankings of National Economic Competitiveness

• Rank 2 from the International Institute for Management Development (2012)

• Rank 7 from the World Economic Forum (2012-2013)

Why is the US competitive?

Structural featuresUS companies are highly sophisticated and innovativeExcellent university system Flexible labor marketLargest sheer size of its domestic economy in the world

Competitiveness on macroeconomic level

1) Competitiveness as productivity;

2) Competitiveness as capacity to create well-being;

3) Competitiveness as ability to sell on external markets.

European Competitiveness Reports (European Commission):

• Competitiveness as high and rising

standards of living of a nation or a

group of nations with the lowest

possible level of involuntary

unemployment, on a sustainable basis.

Competitiveness money money??

Most people think

that rich countries are competitive and poor countries aren’t.

Poorest Countries in the WorldCountries GDP per capita

1. Congo $400

2 Liberia $500

3 Zimbabwe $500

4 Burundi $600

5 Somalia $600

6 Eritrea $700

7 Central African Republic $800

8 Niger $800

9 Madagascar $900

10 Malawi $900

Richest Countries in the WorldCountries GDP

1. United States $15,290,000,000,000

2 China $11,440,000,000,000

3 India $4,515,000,000,000

4 Japan $4,497,000,000,000

5 Germany $3,139,000,000,000

6 Russia $2,414,000,000,000

7 Brazil $2,324,000,000,000

8 United Kingdom $2,290,000,000,000

9 France $2,246,000,000,000

10 Italy $1,871,000,000,000

Countries with the Most BillionairesCountries Number of Billionaires

1. United States 422

2 China 66

3 Russia 65

4 Germany 57

5 India 52

6 United Kingdom 30

7 Turkey 28

8 Hong Kong 25

9 Canada 24

10 Japan 22

Brunei Capital: Bandar Seri Begawan

Population: 408,786GDP per capita: $50,000GDP: 21240000000.000

Rank 1 in terms of Macroeconomic environment Rank 28 from the World Economic Forum

Saudi ArabiaCapital: Riyadh

Population: 26,534,504GDP per capita: $24,500GDP: 691500000000.000

Rank 18 from the World Economic Forum

Competitiveness on macroeconomic level

1) Competitiveness as productivity;

2) Competitiveness as capacity to create well-being;

3) Competitiveness as ability to sell on external markets.

• Competitiveness is a country’s share on the world markets.

Country's share of arms on the world market :

OPEC -Organization of the Petroleum Exporting Countries

• The countries of OPEC had a high positive trade balance in the 1970s, though they were not highly economically developed .

Russia is the world leader on export

• oil products, natural gas, nitric fertilizers, cast iron, steel semi-finished products, nickel, aluminum, the round wood — the 1st place in the world on each of goods;

• oil, arms, the timber, the mixed fertilizers, ammonia — the 2nd place;

• coal, newsprint, synthetic rubber, potash fertilizers — the 3rd place

Russia Capital: Moscow

Population: 142,517,670GDP per capita: $17,000

GDP: 2414000000000.000 Rank 69 from the World Economic Forum

China Racing Ahead of U.S. in the Drive to Go Solar

Paul Krugman is an American economist. Nobel Memorial Prize in Economics (2008)

Krugman sees the Competitiveness of the national economy as a dangerous obsession

Competitiveness on microeconomic level

1. States and companies should be viewed equally .

2. The productivity of an economy is the sum of the productivity of firms in the economy.

3. You can't have a competitive economy unless firms are competitive.

How Native Fijian People started Fishing Business

Operating expenses include:

vehicle expenses (fuel, oil for boat)license feesmaintenance and repairs (fishing gear) crew salary suppliesutilities, such as telephoneinsuranceproperty taxes etc

Fiji Capital: Suva (on Viti Levu)

Population: 890,057GDP per capita: $4,700

GDP: 4186000000 (2012) 3818121194 (2011)

Competitiveness is the degree to which a nation can, under free and fair market conditions, produce goods and services that meet the test of international markets while maintaining or expanding the real incomes of its citizens.•конкурентоспособность определяется тем, насколько нация может в условиях свободной и честной конкуренции производить товары и услуги, которые отвечают запросам международных рынков, одновременно сохраняя на прежнем уровне или увеличивая реальные доходы своих граждан.

 

TODAY IS THE FIRST DAY OF OUR COURSE

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Excited and confident?

Or maybe a little confused?

If you think you might have problems, don’t worry.

We’ll try to resolve these problems together

Now I’d like to hear your FEEDBACK.

Write down a short feedback about the lecture

Send me an e-mail at olga30300@mail.ru

THANK YOU FOR YOUR ATTENTIONolga30300@mail.ru

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