We are living in a connected world, where political and geographic frontiers take a back seat to economic networks and linkages. Some may claim that this has always been the case. However, they would have to admit that the technical, social, and economic connectivity of our times magnify this reality. Just to give an example, in terms of telecommunications, the world behaves as one platform, one stage. The technological growth curve that powers these phenomena follows an exponential curve. Not to mention advances in transportation and the democratization of the world. These technical and socio-political waves have made Adam Smith’s claim – “off all baggage, man is the most difficult to transport” – obsolete. Smith would be surprised to learn that the number of people that live and work away from their country of origin increased from 154 million in 1990 to 175 million in 2000. Money also travels from one country to another, today, literally at light speed as financial transactions cross the globe. And, of course, both consumers and companies see the world as one plaza, one giant bazaar where goods and services are exchanged with little or no obstacles.
Against this background, competitiveness takes on a new meaning. Competitiveness is the capacity of a region to identify or formulate new problems; the capacity to solve these problems; and, hence, the capacity to create and offer products, services, solutions, and experiences that add value in the global market. The reference to regions is not accidental. With few exceptions, global investors pursue peculiarities, characteristics, and social and economic advantages of a region. The region may be contained within a country, as in the case of the east coast of China; or it can span multiple countries, as in the case of the Baltic region.
Another consideration of the new global economy is that the economic development of a region does not depend on natural resources or on great territorial extension. The source of wealth in the new economy is knowledge. To compete, regions need to research and create new knowledge that can contribute to the creation and commercialization of new products, services, and experiences. This shift in the source of wealth challenges many premises of the old industrial economy. Education can not be viewed as a finite process one engages into to prepare for a life-long job. The new economy has equipped our diplomas with expiration dates of, in the best of cases, two years. Education becomes a continuous, life-long process.
Technology has had a decisive impact on the new economy. If you are not familiar with terms such as WiFi, GPS, and RFID, global competitors are ready to deprive you from economic development. In the same spirit, entrepreneurs who find themselves improvising when they hear terms such as Lean Enterprise, 6 Sigma, and CRM, will have an enormous difficulty building their competitive business case. To be considered as a “5 star” region, we have to master the technological platforms that define the crux of today’s and tomorrow’s economic activity.
Last but not least, as companies need to embrace agility, adaptability and innovation. As one of the main engines of the global economy, corporations need to conquer uncertain times with their creativity and ingenuity, casting away the bureaucratic and inflexible structures of the late 20th century.
The new economy invites us to adopt new roles. Government should orient its activity to empower individuals, invite capital from the rest of the world, become the host and facilitator of the development of new technologies and development platforms, eliminate barriers to the flow of capital, minimize bureaucracy and develop a path to competitiveness based on the region’s strengths.
Companies need to capitalize on the convergence of markets and technologies. To do so, they need to utilize multiple-sensory systems to capture the voice of the customer. Companies also need to turn innovation into their first priority; and innovation needs to cover as broad areas as products, services, business models, customer interface, and approaches to attract, hire, develop, and compensate people.
As individuals, we need to learn to constantly adapt. We also need to become administrators of our own future, we need to expose ourselves to the global economy by visiting the world, and we need to exercise social leadership to invent the future.
The global economy is not the product of a conspiracy to dominate the world. The global economy emerges as a result of the thought, decisions, and actions of all of us in this planet. We can harvest the benefits the global economy brings to the table. If we do what we must, we can become on the best “5 star hotels” of economic development on the planet.
Copyright 2006 QBS, Inc.