HUBS 1 Source: World Competitiveness Year Book 1997

HUBS 2 WHAT IS WORLD COMPETITIVENESS? Competitiveness is the ability of a country to create added value and thus increase national wealth by managing assets and processes, attractiveness and aggressiveness, globality and proximity, and by integrating these relationships into an economic and social model.

HUBS 3 The main components of this definition are the following: n An Economic and Social Model n Assets and Processes n Attractiveness and Aggressiveness n Globality and Proximity n Added Value n National Wealth n An Economic and Social Model n Assets and Processes n Attractiveness and Aggressiveness n Globality and Proximity n Added Value n National Wealth

HUBS 4 An Economic and Social Model In theory, every nation is free to define its own economic and social approach to managing competitiveness. However, in reality, regional and international agreements limit the margin of manoeuvrability that nations have. Economic policies and business rules are being harmonised world-wide with a strong emphasis on market economics. From a social point of view, nations have preserved more sovereignty. In theory, every nation is free to define its own economic and social approach to managing competitiveness. However, in reality, regional and international agreements limit the margin of manoeuvrability that nations have. Economic policies and business rules are being harmonised world-wide with a strong emphasis on market economics. From a social point of view, nations have preserved more sovereignty.

HUBS 5 Assets and Processes Competitiveness may stem from inherited assets such as natural resources, land and population size (e.g. Brazil, Australia, India), and/or from processes that determine their present ability to create added value (e.g. Japan, Switzerland, Singapore). The industrial revolution in Britain was a vital process which transformed the country's natural assets, coal and iron, into added value. Competitiveness may stem from inherited assets such as natural resources, land and population size (e.g. Brazil, Australia, India), and/or from processes that determine their present ability to create added value (e.g. Japan, Switzerland, Singapore). The industrial revolution in Britain was a vital process which transformed the country's natural assets, coal and iron, into added value.

HUBS 6 Attractiveness and Aggressiveness Determining a nation's competitiveness can only be done by testing it in international markets. Nations approach the process of internationalisation by being attractive and/or aggressive.

HUBS 7 Attractiveness and Aggressiveness Some nations focus on attractiveness, i.e. creating a domestic environment that is conducive to foreign direct investments being made inside their country, through trade, partnerships with foreign enterprises, etc. (e.g. Ireland, Thailand).

HUBS 8 Attractiveness and Aggressiveness Other nations emphasise aggressively striving to enter international markets by making direct investments outside their country through exports (e.g. Korea, Japan).

HUBS 9 Globality and Proximity This relationship defines the amount of international presence a nation is seeking. Nations manage two types of economies: one that is close at hand (proximity), and one that is far- reaching (globality).

HUBS 10 The economy of proximity The economy of proximity - consisting of traditional activities such as plumbers and butchers, social activities such as doctors and teachers, administrative activities such as government and justice, and consumer supporting activities such as after-sales services and customisation - provides added value close to the end user.

HUBS 11 The economy of globality The economy of globality - consisting of international activities that the factors related to production need not necessarily be actually near the end user. Pursuing this option affects decisions regarding the degree of exposure, regulation and, eventually, social volatility of the economy. The economy of globality - consisting of international activities that the factors related to production need not necessarily be actually near the end user. Pursuing this option affects decisions regarding the degree of exposure, regulation and, eventually, social volatility of the economy.

HUBS 12 Source: World Competitiveness Year Book 1997

HUBS 13 Added Value Economists typically calculate added value by using a country's gross national product (GNP) or gross domestic product (GDP). A more subtle method such as taking the GNP or GDP adjusted to purchasing power parity (PPP), now calculated by the World Bank and the OECD, also accounts for the impact created by the general level of domestic prices. Economists typically calculate added value by using a country's gross national product (GNP) or gross domestic product (GDP). A more subtle method such as taking the GNP or GDP adjusted to purchasing power parity (PPP), now calculated by the World Bank and the OECD, also accounts for the impact created by the general level of domestic prices.

HUBS 14 Added Value Other methods discount inflation, currency fluctuation, etc. GNP and GDP are, however, inadequate as a means of measuring because they do not include all aspects of added value. For example, they do not differentiate between revenues generated by the depletion of non- renewable assets such as oil and revenues generated by processes such as manufacturing. Other methods discount inflation, currency fluctuation, etc. GNP and GDP are, however, inadequate as a means of measuring because they do not include all aspects of added value. For example, they do not differentiate between revenues generated by the depletion of non- renewable assets such as oil and revenues generated by processes such as manufacturing.

HUBS 15 National Wealth National wealth is the end result of competitiveness. It is composed of inherited assets, such as natural resources, and created assets which are built up over the years by a competitive process. Nowadays, the national wealth of many industrialised nations is mainly the result of competitiveness that occurred over a number of years in the past. National wealth is the end result of competitiveness. It is composed of inherited assets, such as natural resources, and created assets which are built up over the years by a competitive process. Nowadays, the national wealth of many industrialised nations is mainly the result of competitiveness that occurred over a number of years in the past.

HUBS 16 Analysis Competitiveness: A national environment is described through 250 criteria grouped into 8 factors. Competitiveness: A national environment is described through 250 criteria grouped into 8 factors.

HUBS 17 I Domestic Economy F Value added F Capital formation F Final consumption F Economic sectors F Cost of living F Economic forecasts F Value added F Capital formation F Final consumption F Economic sectors F Cost of living F Economic forecasts

HUBS 18 II Internationalisation F Balance of payments F Exports of goods and services F Imports of goods and services F Exchange rate F Foreign direct investments F National protectionism F Openness F Balance of payments F Exports of goods and services F Imports of goods and services F Exchange rate F Foreign direct investments F National protectionism F Openness

HUBS 19 III Government F National debt F Government expenditures F Fiscal policies F State efficiency F State involvement F Justice and security F National debt F Government expenditures F Fiscal policies F State efficiency F State involvement F Justice and security

HUBS 20 IV Finance F Cost of capital F Availability of capital F Stock markets dynamism F Banking sector efficiency F Cost of capital F Availability of capital F Stock markets dynamism F Banking sector efficiency

HUBS 21 V Infrastructure F Basic infrastructure F Technological infrastructure F Energy self-sufficiency F Environment F Basic infrastructure F Technological infrastructure F Energy self-sufficiency F Environment

HUBS 22 VI Management F Productivity F Labour costs F Corporate performance F Management efficiency F Productivity F Labour costs F Corporate performance F Management efficiency

HUBS 23 Source: World Competitiveness Year Book 1997

HUBS 24 VII Science & Technology F R+D expenditures F R+D personnel F Technology management F Scientific environment F Intellectual property F R+D expenditures F R+D personnel F Technology management F Scientific environment F Intellectual property

HUBS 25 Source: World Competitiveness Year Book 1997

HUBS 26 VIII People F Population characteristics F Labour force characteristics F Employment F Unemployment F Educational structures F Quality of life F Attitudes and values F Population characteristics F Labour force characteristics F Employment F Unemployment F Educational structures F Quality of life F Attitudes and values

HUBS 27 Source: World Competitiveness Year Book 1997

HUBS 28 Source: World Competitiveness Year Book 1996

HUBS 29 UK: Overall Performance Source: World Competitiveness Year Book 1997

HUBS 30 France: Overall Performance Source: World Competitiveness Year Book 1997

HUBS 31 Japan: Overall Performance Source: World Competitiveness Year Book 1997

HUBS 32 USA: Source: World Competitiveness Year Book 1997

HUBS 33 USA: Source: World Competitiveness Year Book 1997

HUBS 34 China: Overall Performance Source: World Competitiveness Year Book 1997

HUBS 35 Russia: Overall Performance Source: World Competitiveness Year Book 1997