1. ‘Corporate Performance and Competitiveness – the role of skills’ Prof. Ken Mayhew, Director of SKOPE (Skills, Knowledge & Organisational Performance)

2. MASSIVE GOVERNMENT CONCERN ABOUT PRODUCTIVITY AND COMPETITIVENESS HM TREASURY: 1,318 references to competitiveness on its website 1,197 references to productivity MACRO PERSPECTIVE ORGANISATIONAL PERSPECTIVE POLICY

3. COMPETITIVENESS LESTER THUROW (cited by President Clinton): “Advanced nations are in a ‘win-lose’ competition for world markets”. (1992) EUROPEAN COMMISSION: White Paper on Growth, Competitiveness and Unemployment. Competition from newly industrialising economies was the most important reason for the upward trend in European unemployment rates.

4. PRODUCTIVITY A COMPONENT OF COMPETITIVENESS AN INDICATOR Of LIVING STANDARDS

5. BUT “Economists, in general, do not use the word ‘competitiveness’. Not one of the textbooks in international economics I have on my shelves contains the word in its index. So why are there so many councils on competitiveness, White Papers on competitiveness and so on? Why have most people who think about international trade come to use ‘competitiveness’ as perhaps the central concept of their world view?” Paul Krugman, 1996

6. COMPETITIVENESS FOR THE COUNTRY SHORT RUN KEY VARIABLE IS THE REAL EXCHANGE RATE THIS IS A FUNCTION OF NOMINAL EXCHANGE RATE RELATIVE PRODUCTIVITY RELATIVE LABOUR COSTS

7. COMPETITIVENESS FOR THE COUNTRY LONG RUN OECD DEFINITION The degree to which a country can, under free and fair market conditions, produce goods and services which meet the test of international markets, while simultaneously maintaining and expanding the real incomes of its people over the longer term

8. OLD-FASHIONED DISTINCTION IN INTERNATIONAL TRADE THEORY – STATIC: Price competitiveness Non-price competitiveness MODERN DISTINCTION – DYNAMIC: Low unit cost route High value added route THE HIGH VALUE ADDED/SKILLS VISION

9. WHY TAKE THE HIGH VALUE ADDED ROUTE? SUSTAINABILITY INCOME DISTRIBUTION NOT JUST ABOUT TRADEABLES

10. WHERE DO SKILLS FIT INTO THE PICTURE? UK’s alleged deficiencies: the role of international audits But skills are a function of purpose If the UK follows the low value added route, the demand for skills will be low If the UK follows the high value added route, the demand for skills will be higher

11. WHAT WE KNOW AND WHAT WE DON’T KNOW LOW SKILLS EQUILIBRIUM? THE RELATIONSHIP BETWEEN COMPETITIVENESS ROUTE AND SKILLS THE RELATIONSHIP BETWEEN SKILLS AND ORGANISATIONAL PERFORMANCE?

12. WHAT DOES ALL THIS MEAN FOR INDIVIDUAL ORGANISATIONS? CHOICE OF STRATEGY AGAINST WHOM ARE YOU COMPETING ENTRY INTO FOREIGN MARKETS ADJUSTMENT TO IMPORT COMPETITION FALLING TRADE COSTS ASSOCIATED WITH A REALLOCATION OF RESOURCES TO THE MORE PRODUCTIVE FIRMS

13. THE IMPLICATIONS FOR NATIONAL POLICY SUPPLY OF SKILLS ENCOURAGING THE HIGH ROAD LEVERAGE ON INDIVIDUAL ORGANISATIONS MNEs AND SPILLOVERS HORIZONTAL VERTICAL THE NEW PROTECTIONISM

14. IMPLICATIONS FOR POLICY AT THE REGIONAL LEVEL HOW MUCH POLICY DISCRETION? HOW MUCH CORPORATE DISCRETION? SKILLS SUPPLY MNEs KNOWLEDGE-BASED INDUSTRY HOW TO INFLUENCE COMPANIES CLUSTERS THE CLIMATE OF OPINION COORDINATION AND RESOURCES

15. THE REAL HORROR STORY!