By Kate Pierson
In life we are taught that winning is not everything and that in the face of competition, mustering up a ‘do my best’ attitude and playing with this spirit, irrespective of the outcome, is what really counts.
Whether its emulous characteristics befriend your own aspirational nature, or have you seeking security in the sanctuary of the sideline, the concept of competition is ingrained in human existence.
Cemented in tradition, competitiveness has been crystallised in local, national and international events and practices. And while the nature of competition has meant that it has always been an attention seeker, it is a hot topic in New Zealand at present for all the wrong reasons as everyone is asking, ‘Have New Zealanders lost their edge?’
The IMD Swiss Business School’s annual World Competitiveness Yearbook certainly seems to think so. A leading trio of Singapore, Hong Kong and the United States have secured spots at one, two and three in this survey of businesspeople and policymakers in 58 developed or emerging economies.
As a widely watched indicator for the quality of a country’s governance and investment environment, the survey measured countries against 327 different criteria. In New Zealand, the survey was conducted for IMD by the NZ Institute of Management.
The overall survey results indicated that despite its cataclysmic losses throughout the past two years, the US has stayed on top due to the sheer size of its economy, strong business leadership and unrivalled supremacy in technological innovation. Given the Singaporean economy grew by more than 13 percent in the first quarter of 2010, it’s no real surprise it takes top spot.
It seems Taiwan at number eight and Malaysia at 10, are also benefiting from strong demand in Asia, in addition to the implementation of highly efficient policies. Switzerland, at four, has been characterised by strong economic fundamentals such as low deficit, debt, inflation and unemployment.
New Zealand on the other hand has dropped to 20th place as the Middle Eastern Emirate of Qatar has replaced us at number 15 and our Australasian counterpart has left us far behind after being introduced to spot number five. The big island from ‘Down Under’ was deemed the most competitive venue of commercial activity by the survey.
Despite these startling figures, recipients of the competitiveness survey have also been advised that results were impacted by unusual volatility caused by:
- Economic growth
- Exchange rates
- Financial assets
- Trade and investment flows
- Employment figures.
BusinessNZ chief executive Phill O’Reilly agrees a part of New Zealand’s decline on the competition scale comes down to the volatility of the world economy. “These results also relate to high government debt and people out of work, which impacts productivity, weak capital markets and export performance,” he explains.
Rationalisations aside however, what do we do to regain our dwindling economic dynamism? “It comes down to the ease attached to starting a business, ease of developing that business and of course the government infrastructure spend,” O’Reilly says.
“Efficient government spending means not driving money into wasteful welfare schemes — not to say that all welfare scheme are wasteful, but New Zealand needs to be investing in productivity enhancing assets such as ports and motorways.
“That means it really comes down to how the government operates and the nexus and linkage between that and how our businesses operate.” O’Reilly believes we have issues around our productivity capacity in New Zealand, as we have a low capital intensity compared to others.
He also maintains that we we need to look to countries like Singapore who are extraordinarily pro-growth and that look and feel like us and we need to read into, and understand them so we can learn from them.
“We face a dual problem where we are the most isolated developed economy in the world,” O’Reilly says. “In Switzerland, businesses can drive for an hour to export and Singapore and Hong Kong are so close to big export markets they are almost back to their growth trend again. In New Zealand, our businesses need to starting thinking international not domestic.”
O’Reilly’s advice for staying competitive in our business landscape:
- Try to get as capital intensive as possible whilst ensuring this is consistent with the nature of your business, ie the acquisition of modern machinery
- Upskill staff and management — ensure your business has better skills than your competitors
- Think of exporting from day one — think of your business as an exporter and what it would take to be one.
For more information on the IMD and its annual surveys, visit www.imd.ch
