Global Competitiveness Executive Class at Excel Soft:
Prof Dr. Sudhi Rao, PhD from prestigious Rensselear Polytechnic institute USA and corporate stints in JP Morgan, Honeywell etc took an executive class for managers at Excel soft on the topic “Global Competitiveness”. This is the first time, Myra is interfacing with industry to mentor managers in Industry. Global competitiveness is being offered as elective course at Myra. Since the session is of 3 hours duration, Prof Dr. Sudhi power packed entire semester course material into a deck of slides with industry wide examples.
Session started with definition of Competition and multiple dimensions to competition. Michael Porter’s famously quoted “sustained record of success against open competition” as competitiveness. Long ago, when countries, organization and individuals excelled in a field, they are proved to be leaders in the field. But no longer is that norm valid, as for the survival, apart from excellence being competitive and innovative is more important and is new mantra to be on the field playing the game.
“Competitiveness is defined at country level, organizational level and at individual level. Individual level dynamics are less studied academically and needs much through investigation in order to get more comprehensive picture” Prof Dr.Sudhi quoted. Competitiveness at all the three levels is part of unique curriculum being offered by Prof DR.Sudhi at Myra, as elsewhere only one frame work is being taught.
“Competitiveness is measured by “Productivity”. Productivity is normalized across the economies as dollar amount earned per hour, in order to account for anomalies in different industries. Competitiveness is the most meaningful measure of excellence and excellence has to sustain in order to be competitive”- Prof quoted. Also mentioned is the fact that better innovation will lead to better productivity and hence overall growth in competitiveness.
Certain concepts of college level economics keep coming again and again while attending sessions like this and Prof emphasized on having some basic grip on these basics in order to understand underlying nuances better. Professor gave an example of “Value chain analysis”, explaining how the USA based Microsoft squeezes more revenue, being more productive for its design work despite China being manufacturer of Microsoft mouse. (For every mouse worth $39.95 being manufactured, Microsoft grabs $37.60, where Chinese manufacturers of mouse will have only meagre share of $2.35)
Competitiveness is best explained through different frame works, which will have different classifications of variable, parameters measured through metrics and validated through comparison of past events or against other bench mark reports/measures such as GDP. All these reports greatly aid in decision making. Few of these reports included: Global competitiveness report by World Economic Forum, Comparative Advantage of Nations and Cluster Frame work by Michael Porter, Ease of doing business report by World Bank, Index of Economic Freedom by Heritage foundation, and Global Innovation Index by WIPO etc.
Competitiveness at country level was best explained using World Economic Forum’s “Global Competitiveness Report”, which was based on 12 pillars. Based on these pillars, the nations were divided into factor driven, efficient driven, innovation driven, factor to efficient transition phase, efficient to innovation phase countries.
One of the executives raised an interesting question here asking the speaker to dwell more on the idea that teams with highly competent individuals fail to perform, to which Dr. Sudhi replied “they fail because of lack of proper institutional measures and our tendency to rate individuals, humans higher than institutions themselves”.
Clustering is important frame work to understand competitiveness at firm level. Michael porter proposed cluster frame work and extensively studied clusters across the globe. Institute for Strategy and Competitiveness at Harvard works extensively basing on this frame work to study how entities are shaping the global economy, how entities are making nations more productive. Prof Dr.Sudhi gave examples of: fast food and entertainment cluster in America, Automobile cluster in Germany. Interestingly Professor gave an example of India and its rise in Automobile arena. Indian conditions of space constraint, fuel efficiency drive innovation in Indian Automobile industry and made Automobiles in A list of exports of India. Ability to sell product at global scale is key factor in this frame work. Speaker also gave insights about evolution from comparative advantage to competitive advantage. Other cluster examples in the talk included Diamond cluster in Surat. More detailed analysis were presented on Bangalore Bio Tech cluster explaining in length and detail Porter’s diamond frame work of Cluster.
Talk also included prescriptions made by Porter to companies and governments. On the basis of same theory, speaker suggested that in order to be competitive and gain advantage one should start a firm with in a cluster, create pressure for innovation, improve domestic demand factors, and establish early warning systems, selective cooperation with rivals, selective globalization and deregulating competition. Also said that governments has to focus on factor creation, avoiding intervention in factors market, enforcing product standards, prevent monopolies.
Next level of competitiveness emphasizes about competitiveness at individual level and Speaker said that World is Flat book fore saw the importance of this long back when Friedman explained about Globalization 3.0 as era of individuals. Speaker explained ten flatteners and triple convergence concepts in length and detail. Great Synthesizers, Great Explainers, Great Leveragers, Great Adoptors, Green people, Math Logic individuals, Passionate personalizers, Great Localizers concepts were explained with examples. Few of them included Uber leveraging the gap in taxi aggregation along the value chain, how the professor himself needs to be competitive in order to be great explainer, Harsha Bhogle being passionate personalizer. Individuals are meant to be untouchables by virtue of their jobs and skill sets, otherwise they face risk of extinction in age of competition.
Anomalies in metrics employed across the frame works were explained in order to gain over all big picture.
Suggested readings included:
- World is Flat by Friedman.
- World Economic Forum’s Global Competitiveness report 2015-16.
- Clusters and New Economics of Competition by Michael Porter.