By Deborah Wince-Smith and Frank-Jürgen Richter, Chairman, Horasis
Nations around the world are being challenged by historic changes in terms of their size, speed and scope. The political landscape is shifting beneath our feet, powerful new players are flexing their muscles on the world stage, the competitive playing field is ever more crowded, and game-changing business models and revolutionary technologies are disrupting many markets and industries.
Digitization and globalization have enabled emerging economics to connect to the world’s markets, businesses and jobs, and rapidly scale the economic development curve, raising competitive pressures on the advanced economies.
Looking to the future, a nation’s ability to leverage rapid advances in science and technology will be fundamental to its economic success. But, converting new technology into economic impact is inherently disruptive, both destroying and creating businesses, markets and jobs. This dynamic process is essential for reaping technology’s greatest benefits in terms of economic growth, productivity and opportunity.
With today’s breakneck pace of change and disruption the new normal, developing an economic engine for the 21st century is not so much a matter of transitioning from one steady state to another with a five-year strategic plan to get there.
Instead, nations need agile and resilient capabilities, capacities and processes that enable them to thrive no matter when, where or how a game-changing technology or global market shift rattles the economy and reshapes opportunity, tossing the best laid plans into the trash bin. That requires ecosystems that continuously knit together talent, research and technology, capital, business assets and entrepreneurship to turn the flow of new science and technology into value for the marketplace.
Around the world, where there are strong ecosystems, hubs of innovation rise and beehives of economic activity flourish. As many nations seek to build their ecosystems for innovation, they can learn from each other for the benefit of all nations. The Global Federation of Competitiveness Councils (GFCC), a global competitiveness movement and the world’s first network devoted to the exchange of knowledge and practices related to competitiveness, is an ideal mechanism for that learning.
Nations and their governments should commit to the GFCC Global Competitiveness Principles endorsed by more than 30 national competitiveness organizations. These principles offer an overarching framework for policies that foster innovation and healthy competition, and ease the allocation of resources to new opportunities and adaption to the dynamics of technological and economic change. These include creating a better business environment through transparent regulations and tax rules, making it easier to start a new business, open markets for trade and investment, strong intellectual property rights, and training to enable all citizens to reach their full potential.
This week, business and government leaders, investors, teachers, philosophers, philanthropists, artists, the media and others from more than 80 countries are convening in Portugal for the annual Horasis Global Meeting.
They will explore complex issues swirling around the world—from trade and inclusive globalization, the fidelity of economic systems and business practices to the effects of radical technological change, education and the changing nature of work—and envision new pathways to opportunity and new solutions to the challenges we face. This cross-industry, cross-sector, cross-discipline and cross-country convocation exemplifies the kind of conversations and collaboration we must have to shape a better, more prosperous future.
At the bottom-line, the source of a nation’s long-term prosperity is the productivity with which it can utilize its human, capital and natural resources to produce goods and services, a process that is strengthened through global competition.
As all nations improve their productivity, wages rise and markets expand, creating the potential for rising prosperity for all. There is no fixed pie of global demand to be divided, but almost unlimited human needs to be met by the world’s inventors and innovators, entrepreneurs and businesses.
Deborah Wince-Smith is President and CEO of the United States Council on Competitiveness
Frank-Jürgen Richter is Chairman of Horasis