Meet the new buzzword, competitiveness. Who will be the next Indiana Jones that succeeds in lifting the mysterious veil concealing the myth of competitiveness? This is the new quest for the Holy Grail.
Politicians have been waxing lyrical about the golden path to achieve better GDP growth, but really and truly the journey is long and rewards elusive. Globalisation has sharpened competition. As a general comment, one can state that due to the effect of globalisation, organisations in all spheres must compete to deliver added export value. Many ask what Malta can do to lift itself out of the comparatively low standing in the global competitiveness index. The answer is simple: there is a lot of do both at company and at state level. We have achieved a lot since Independence but more is needed.
Certainly there is no magic solution to ease the hard work needed to improve operational efficiency and perk up our comparative low standing. It is best to stop and ask ourselves what constitutes competitiveness. To answer this question one can define it as a quality usually equated with solving macroeconomic issues (such as changes in interest rates, inflation or taxes) or microeconomic issues (such as low quality of entrepreneurship and excessive bureaucratic regulations on business). Both macro and micro issues need to be effectively tackled in the best way possible.
To respond effectively to the exigencies of a global market, firms need to develop a range of export capabilities in the areas of technology, marketing, management, human resources, finance, and continuously upgrade them over time. However, building business competitiveness − particularly for export markets − also has to involve both government and trade support institutions in a collective effort. Only this way can a coherent competitiveness strategy, tailor-made to national circumstances be born. This has a major influence in the creation of business competitiveness in a globalised environment.
More then ever, there exist powerful factors that are driving globalisation such as falling trade barriers, fast-paced technological advances, declining communications and transport costs, international migration, and highly mobile investment. The cliché goes that firms are facing never-ending demands urging them to improve their value chain. At this stage one can comment that adding “Value “is the ability to meet or exceed the needs of customers, and do so efficiently. Firms have to deliver value to their customers by way of services or products and countries have to deliver value as business locations. Reading textbooks about competitiveness, we remember them telling us that a close and active business-government partnership is the linchpin of a well-managed national competitiveness strategy. Traditionally, business focuses on increasing profits, while government formulates and implements strategy. United they can foster higher GDP growth, reduce debt and achieve better employment prospects.
Yet, accessing new resources and markets while mitigating the risks of intensive competition calls for a new kind of relationship between business and government. In this context, promoters of TuneMalta wish to play a modest role in running a reliable competitiveness strategy. This initiative is co-funded by a grant to improve competitiveness paid out of the European Regional Development Fund. (ERDF) This forms part of the Competitiveness Grant Scheme being an enterprise support incentive under the Malta Enterprise Act.
As a vehicle to promote competitiveness TuneMalta has conceptualised a number of initiatives including an interactive website, holding of conferences, seminars, adverts, videos, newsletters, webinars and podcasts which we hope when fully implemented will succeed to change the status quo of its members. If resources are not a problem, we suggest a number of ways that preferred partners could employ to boost their international competitiveness such as:
• Rationalisation of output to get rid of high cost plants
• Relocating to places where labour costs are lower
• Process and product innovation
• Incorporating the latest ICT technology
• Sourcing competitive services/supplies from abroad (as appropriate)
• Seeking out new market opportunities via trade conferences, newsletters etc
• Improving relationships with suppliers and customers
• Investing in higher intellectual property to improve deliverables.
• Technical advisory (evaluation and comparison of new products and technologies, consultancy, feasibility studies)
• Support in drawing up specific R&D projects, in collaboration with R&D centres, that build shared team with high level competences, and in accessing to financing opportunities
• Managerial coaching: help businesses to understand the key areas where they can find the best competences and skills from universities and where they have the best opportunities to create and maintain a competitive advantage
• Support from the research laboratories in developing projects, field experimentation and testing
• Assistance in networking and BtoB internationalisation
• Networking: One-To-One knowledge sharing, clustering, partnership development, deal groups creation, etc
The scope of creating such a tool is to help members reach the objectives of the renewed Lisbon strategy which aims to stimulate growth and employment in Europe. One of its targets is the launching of a Competitiveness and Innovation Framework Programme CIP. This has been adopted to cover the six-year period 2007-2013. The programme supports measures to strengthen competitiveness and innovation capacity in the European Union. In this context TuneMalta has over the past year developed a strategy making full use of information technologies, better use of media facilities and exchange of information on Constructive Strategies. Without appearing to be blowing our own trumpet, one can safely state that the promoters of TuneMalta hope to persuade users that it is only a means to achieve an end but is not an end in itself. It is a concept that acts as a tool in the hands of its preferred partners enabling them to take advantage of new horizons and markets. It comes as no surprise that the challenge facing business entities is how to design and implement supportive policies and strategies to tackle competitiveness. As stated earlier, TuneMalta has been specifically formulated to act as a catalyst so as to maximize success in business by the use of innovative techniques. The promoters of the website came up with the novel idea of hosting preferred partners (free of charge) enlisted from various sectors wishing to share ideas and cross-fertilize their marketing plans by the exchange of views and contacts. As the tempo of exchange traffic increases so does the possibility of valuable information which can flow unhindered between participants. This is one way how participants can gain from the use of TuneMalta, which aims to expand its reach to cater for the international community. The promoters have extensive experience in offering their expertise to diverse sectors such as consultancy on remote gaming, legal concepts of gaming regulation, taxation models for gaming operations, international tax advice for a number of sectors, attracting hedge funds domiciliation, captives, PCC ‘s and ICC ’s to Malta etc. For a broader picture of past events enter www.maltaconfer-ence.com.TuneMalta site has been developed by Icon, a premium web designer in Malta, which harnessed the latest Internet technology, together with state-of-the-art technology in its software architecture. Icon’s devotion to creative excellence and intelligent business strategy has produced almost a decade of award-winning projects, technologies and solutions. It makes comprehensive use of Web2 technologies, such as podcasts, blogs, public video and image links, third-party content sites, and more. These techniques will soon be available in TuneMalta to maximise its effectiveness via links to other sites, such as Facebook, Twitter etc. Such linkages are instrumental to encourage members to talk to each other in a fast and confident mode. Typically, we see how data exchanged is encrypted for maximum security and confidentiality. By providing a user friendly IT delivery platform across many sectors, any preferred partner who signs up can freely access a wealth of rich data accessible in the Competitive Strategies corner. There are daily RSS feeds from FT, CNBC, BBC World, HedgeWeek and EGR. A daily ticker will start showing exchange rates for major currencies. Although it remains a difficult task to meet the requirements of such a diverse spectrum of users TuneMalta aims to add a number of customized packaged applications (provided free of charge by reliable third party providers). It tries to inculcate a culture among its participants to use latest concepts covering a variety of business topics in the newsletter. It goes without saying that only through systematically building business competitiveness can preferred partners achieve success in the export field. This leads to another aspect that is sometimes termed the Cinderella of SMEs … ie that of building a coherent and sustainable strategic plan. This plan covers the overall direction of the business. It is primarily a marketing tool but it also involves decision-making about production and operations, finance, human resource management and environment issues.
To conclude, members are encouraged to follow a code of ethics which helps governing morality and acceptable behaviour as this assures a level playing field. An ethical producer has to be concerned with what is practised by all firms (upstream and downstream) in the supply chain. Finally, one cannot omit fine tune operational skills being the “core competences” such that a preferred partner is encouraged to nurture for a sustainable growth strategy. For example, core competencies are those capabilities that are critical to a business achieving a higher competitive advantage. The starting point for analysing core competencies is recognising that fierce competition is as much a race for competence mastery as it is for market position and power. So ideally, the goal is to focus your attention on competencies that really produce a competitive advantage. One hopes that this article has managed to lift the veil covering the myth of competitiveness.
The writer is a partner in PKF,
an audit and business advisory firm
[email protected]
www.tunemalta.com