This is a revision presentation on international competitiveness designed for A level economics students.
Students will be expected to
Consider measures of competitiveness: For example: relative unit labour costs and relative export prices.
Understand factors influencing competitiveness such as the exchange rate; productivity; wage and non- wage costs; regulation.
Examine government policy to increase international competitiveness. For example: measures to improve education and training; incentives for investment; deregulation.
A2 Macroeconomics - Revision on the Balance of Paymentstutor2u
The balance of payments (BOP) records all financial transactions made between consumers, businesses and the government in one country with other nations.
The current account measures the difference between money and credit going in and out of an economy (through exports, imports and income paid on assets both home and abroad)
A2 Macroeconomics - Revision on the Balance of Paymentstutor2u
The balance of payments (BOP) records all financial transactions made between consumers, businesses and the government in one country with other nations.
The current account measures the difference between money and credit going in and out of an economy (through exports, imports and income paid on assets both home and abroad)
This revision presentation explains and illustrates the concept of protectionism. The presentation explains the factors that motivate protectionism and the methods employed, including tariffs, import duties, dumping, currency manipulation and the favouring of domestic firms and industries.
For many economists, the labour market is the most important market of all to study, analyse and evaluate. Like product markets for goods and services, labour markets can also fail. The main types of labour market failure are labour immobility including skills gaps, inequality, disincentives to be economically active, labour market discrimination and the effects of monopsony power of employers.
Inward FDI flows to developing economies in 2014 reached their highest level at $681 billion with a 2 per cent rise. Developing economies thus extended their lead in global inflows. China became the world’s largest recipient of FDI. Among the top 10 FDI recipients in the world, 5 are developing economies. What are the advantages and disadvantages of foreign direct investment for developing countries?
Pearson Edexcel International A Level Business (431) 1 Growing economies Powe...Revisionstation
This is part of the Edexcel International Business A Level teaching bundle available from Revisionstation.
a) Characteristics of developed, developing and emerging
economies.
b) Growing economic power of countries within Asia, Africa and other
parts of the world.
c) Implications of economic growth for individuals and businesses:
• trade opportunities for businesses
• employment patterns.
d) Indicators of growth:
• gross domestic product (GDP) and GDP per capita
• human development index (HDI).
This revision presentation is designed for students revising their A2 macroeconomics. It looks at the economics of currency markets and focuses in particular on different exchange rate systems and the debate over fixed versus floating currencies.
Barriers to Economic Growth and Developmenttutor2u
This is a revision presentation covering examples of barriers ti economic growth and development in emerging and developing countries. In their revision students should consider factors such as:
Poor infrastructure
Human capital inadequacies
Primary product dependency
Declining terms of trade
Savings gap; inadequate capital accumulation
Foreign currency gap and capital flight
Corruption, poor governance, impact of civil war
Population issues
This revision presentation explains and illustrates the concept of protectionism. The presentation explains the factors that motivate protectionism and the methods employed, including tariffs, import duties, dumping, currency manipulation and the favouring of domestic firms and industries.
For many economists, the labour market is the most important market of all to study, analyse and evaluate. Like product markets for goods and services, labour markets can also fail. The main types of labour market failure are labour immobility including skills gaps, inequality, disincentives to be economically active, labour market discrimination and the effects of monopsony power of employers.
Inward FDI flows to developing economies in 2014 reached their highest level at $681 billion with a 2 per cent rise. Developing economies thus extended their lead in global inflows. China became the world’s largest recipient of FDI. Among the top 10 FDI recipients in the world, 5 are developing economies. What are the advantages and disadvantages of foreign direct investment for developing countries?
Pearson Edexcel International A Level Business (431) 1 Growing economies Powe...Revisionstation
This is part of the Edexcel International Business A Level teaching bundle available from Revisionstation.
a) Characteristics of developed, developing and emerging
economies.
b) Growing economic power of countries within Asia, Africa and other
parts of the world.
c) Implications of economic growth for individuals and businesses:
• trade opportunities for businesses
• employment patterns.
d) Indicators of growth:
• gross domestic product (GDP) and GDP per capita
• human development index (HDI).
This revision presentation is designed for students revising their A2 macroeconomics. It looks at the economics of currency markets and focuses in particular on different exchange rate systems and the debate over fixed versus floating currencies.
Barriers to Economic Growth and Developmenttutor2u
This is a revision presentation covering examples of barriers ti economic growth and development in emerging and developing countries. In their revision students should consider factors such as:
Poor infrastructure
Human capital inadequacies
Primary product dependency
Declining terms of trade
Savings gap; inadequate capital accumulation
Foreign currency gap and capital flight
Corruption, poor governance, impact of civil war
Population issues
Evaluating Benefits and Costs of Globalisationtutor2u
This is a streamed version of a colour coded answer to a past exam question on the economics of globalisation. Each colour in the answer refers to a specific exam skill - knowledge, application, analysis and evaluation. I hope this approach might be interesting to students who want to configure their answer to get high marks in the A level exam. The crucial point is that contextual examples can make a huge different to the quality of your answer.
Tutor2u - Production, Productivity and Coststutor2u
This chapter considers some core concepts relating to production and productivity (they are not the same!) which will be useful in understanding the theory of market supply. Productivity is a measure of efficiency and changes in productivity have an important effect on the unit costs of supply. In this section we also briefly cover fixed and variable costs and the sources of some long run economies of scale which benefit bigger businesses as they expand. Specialisation is an important AS concept – be ready to apply it to the production possibility frontier for example.
This video of a live revision webinar for AS macro evaluates supply-side policies designed to improve macroeconomic performance and address structural policy problems. The main focus is on the UK economy.
This presentation by Chiara Criscuolo, Head of Division Productivity Innovation and Entrepreneurship Division, Science Technology, and Innovation Directorate, was made during the discussion “The Relationship between Competition and Innovation” held at the 140th meeting of the OECD Competition Committee on the 14th of June 2023. More papers and presentations on the topic can be found out at oe.cd/rbci.
This presentation was uploaded with the author’s consent.
Innovation Policy by Fergus Harradence BISTal Oron
A presentation by the deputy director for innovation policy, Mr. Fergus Harradence @ a talk organized by the Entrepreneurs Interactive Society, Imperial Business School
Can Australia find a business model to keep the good times going?
Prof. Thomas Clarke, Professor William Lazonick - 12 July 2012
Use the hashtag #utspeaks to further the discussion on twitter.
UTSpeaks is an annual free public lecture series presented by UTS experts discussing a range of important issues confronting contemporary Australia.
Insights on the performance of the UK's science and innovation systemTera Allas
Summary slide pack drawing out main conclusions of the BIS report on "Insights from international benchmarking of the UK's science and innovation system"
This presentation by UK’s Competition and Markets Authority was delivered during a workshop on “Methodologies to measure market competition” held virtually for competition authorities officials on 23 February 2021. More materials on the topic can be found at http://oe.cd/mmkts.
This presentation was uploaded with the author’s consent.
In this revision presentation we look at recent trends in UK trade union membership, consider how trade unions can affect both pay and employment and challenge the textbook view that union-negotiated pay increases inevitably have negative consequences for employment.
In this revision presentation we cover key examples of pure and quasi public goods and consider the arguments for and against an increase in government spending on public goods.
Poverty Reduction Policies in Low Income Countriestutor2u
This revision presentation covers some of the main causes of continued high levels of extreme poverty in low and middle income countries and considers a range of pro-poor government interventions designed to increase productivity and regular employment and waged income in formal labour markets.
You don’t need to produce a lot of evidence in your macroeconomics exams but knowing some basic and key facts and figures can make your answers stand out from the crowd! Here is a quickfire journey through twenty important economic numbers that won’t change before the exam – use them to support your answer and impress the examiner!
Microeconomics - Great Applied Examples for Examstutor2u
In this presentation, I have chosen loads of current examples that you might want to use as context in your microeconomics exams. We look at examples from different market structures, recent mergers and takeovers, the world's most valuable companies, the largest employer, unicorn business, de-mergers, the biggest initial public offerings (IPOs) and much else. Hopefully a useful video to go through to add some super examples into your revision notes.
This revision presentation considers the variety of stakeholders impacted by business activity. How will a change in objectives, such as a move from profit maximisation to revenue maximisation have an effect on different stakeholders?
This revision presentation looks at profit satisficing as an alternative objective for businesses. Why might firms satisfice? What are some of the possible consequences for economic welfare and efficiency?
In this short revision video, we look at the substantial productivity gap between the UK and many of the UK’s major competitor countries.
Paul Krugman, the Nobel Prize-winning economist said twenty fives years ago that “Productivity isn’t everything, but in the long run it is almost everything,”
In this presentation we consider the theory of wage-setting with a monopsony employer and the possible impact that a trade union might have on wages and employment. We also look at efficiency wage theory and mutual gains from pay bargaining between stakeholders.
Updated revision presentation on aspects of behavioural economics and topical issues where behavioural nudges are being used to change the choices of consumers and businesses.
Latino Buying Power - May 2024 Presentation for Latino CaucusDanay Escanaverino
Unlock the potential of Latino Buying Power with this in-depth SlideShare presentation. Explore how the Latino consumer market is transforming the American economy, driven by their significant buying power, entrepreneurial contributions, and growing influence across various sectors.
**Key Sections Covered:**
1. **Economic Impact:** Understand the profound economic impact of Latino consumers on the U.S. economy. Discover how their increasing purchasing power is fueling growth in key industries and contributing to national economic prosperity.
2. **Buying Power:** Dive into detailed analyses of Latino buying power, including its growth trends, key drivers, and projections for the future. Learn how this influential group’s spending habits are shaping market dynamics and creating opportunities for businesses.
3. **Entrepreneurial Contributions:** Explore the entrepreneurial spirit within the Latino community. Examine how Latino-owned businesses are thriving and contributing to job creation, innovation, and economic diversification.
4. **Workforce Statistics:** Gain insights into the role of Latino workers in the American labor market. Review statistics on employment rates, occupational distribution, and the economic contributions of Latino professionals across various industries.
5. **Media Consumption:** Understand the media consumption habits of Latino audiences. Discover their preferences for digital platforms, television, radio, and social media. Learn how these consumption patterns are influencing advertising strategies and media content.
6. **Education:** Examine the educational achievements and challenges within the Latino community. Review statistics on enrollment, graduation rates, and fields of study. Understand the implications of education on economic mobility and workforce readiness.
7. **Home Ownership:** Explore trends in Latino home ownership. Understand the factors driving home buying decisions, the challenges faced by Latino homeowners, and the impact of home ownership on community stability and economic growth.
This SlideShare provides valuable insights for marketers, business owners, policymakers, and anyone interested in the economic influence of the Latino community. By understanding the various facets of Latino buying power, you can effectively engage with this dynamic and growing market segment.
Equip yourself with the knowledge to leverage Latino buying power, tap into their entrepreneurial spirit, and connect with their unique cultural and consumer preferences. Drive your business success by embracing the economic potential of Latino consumers.
**Keywords:** Latino buying power, economic impact, entrepreneurial contributions, workforce statistics, media consumption, education, home ownership, Latino market, Hispanic buying power, Latino purchasing power.
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
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when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
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The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
2. Competitiveness on the EdExcel A2
Economics Syllabus (June 2016)
• Students will be expected to
1. Consider measures of competitiveness: For
example: relative unit labour costs and relative
export prices
2. Understand factors influencing competitiveness
such as the exchange rate; productivity; wage and
non- wage costs; regulation
3. Examine government policy to increase
international competitiveness. For example:
measures to improve education and training;
incentives for investment; deregulation
3. Does the UK’s deficit suggest we are uncompetitive?
The UK’s external trade position has worsened considerably in recent years. Since
2013 the quarterly current account deficit for the UK has averaged 5% of GDP
-7.0
-6.0
-5.0
-4.0
-3.0
-2.0
-1.0
0.0 2009Q1
2009Q2
2009Q3
2009Q4
2010Q1
2010Q2
2010Q3
2010Q4
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
2015Q3
2015Q4
Trade balance (%, GDP)
Current account balance
(% GDP)
4. Key Terms: International (External) Competitiveness
External competitiveness is the sustained ability to sell goods and
services profitably at competitive prices in a foreign country
• Cost (price) competitiveness
• Key metric: Differences in relative unit labour costs (ULCs)
• Non-price competitiveness
• Product quality, design, reliability and performance, choice,
after-sales services, marketing, branding and the availability
and cost of replacement parts
• Non-wage costs:
• Environmental taxes e.g. minimum prices on carbon emissions
• Employment protection laws & health and safety regulations
• Statutory requirements for employee pensions
• Employment taxes e.g. employers’ national insurance costs
5. Hourly Labour Costs in the European Union
Key Point
Hourly labour costs are not the
same as unit labour costs because
they do not take into account
differences in labour productivity
6. Unit Labour Costs in the European Union
80.0
85.0
90.0
95.0
100.0
105.0
110.0
115.0
120.0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Index of Unit Labour Costs for Selected EU Countries, 2010 = 100
Euro area (19 countries) Germany Ireland Greece Spain Poland United Kingdom
Note the progress that countries such as Spain, Greece and Ireland have made in reducing
their unit labour costs – largely through a (painful) internal devaluation in their economies
7. How to Reduce Relative Unit Labour Costs
Relative unit labour costs will rise when
• A country’s exchange rate appreciates
• Wage costs rise relatively faster than other nations
• Labour productivity growth is relatively slower
Options for reducing relative unit labour costs
• Monetary policy aimed at a currency depreciation e.g. a
managed floating exchange rate
• Wage controls e.g. wage freezes in the public sector
• Supply-side measures designed to raise labour
productivity / efficiency
8. Competitiveness Issue for UK: The Productivity Gap
Labour productivity can be measured by GDP per hour worked and per worker, and growth
in GDP per hour worked. This chart shows GDP per worker for G7 countries in 2015
86.0
100.0
106.0
111.0 114.0 115.0 119.0
138.0
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
Japan UK(=100) Canada Germany Italy France G7 exc. UK US
GDP per worker employed
9. UK Productivity Growth has disappointed since 2007
Real output per person employed in the UK and G7 (excluding the UK)
80.0
85.0
90.0
95.0
100.0
105.0
110.0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Index of Constant price GDP per hour worked, 2007 = 100
UK G7 exc UK
10. Why does the UK economy lag on productivity?
Low rate of new capital
investment in the UK
Banking crisis affecting
lending to businesses
Possible slowing rates of
process innovation
Persistent and deep skills
shortages in key
industries
Relatively low levels of
market competition
Low aggregate demand
& high spare capacity –
under-utilizing resources
11. Countries with Best Competitiveness in 2015-2016
5.76
5.68
5.61
5.53
5.5
5.47
5.46
5.45
5.43
5.43
5.41
5.33
5.31
5.3
5.28
0 1 2 3 4 5 6 7
Switzerland
Singapore
United States
Germany
Netherlands
Japan
Hong Kong SAR
Finland
Sweden
United Kingdom
Norway
Denmark
Canada
Qatar
Taiwan, China
Global Competitiveness Index Value (Max Score = 7)
10th
12. Global Competitiveness Index (World Economic Forum)
The Global Competitiveness Index uses indicators which include:
Indicator Brief comment on the indicator
Effectiveness of institutions Protection of property rights, rule of law, corruption
Quality of infrastructure Quality of transport, communications, energy etc.
Macroeconomic performance Inflation, fiscal balance, government debt, growth
Health and primary education Malaria incidence, prevalence of HIV, mortality rates
Higher education and training Quality of teaching and attainment e.g. in Maths
Efficiency of goods & labour markets Intensity of competition, tariffs, other barriers
Technological readiness Internet use, availability of latest technologies
Sophistication of business Supplier quality, business clusters,
Innovation Patent applications, research & development spend
13. 2015-16 Global Competitiveness Index (UK Rankings)
Indicator
UK ranking out of 144
countries
Overall
competitiveness
10th /144
Institutions
12th /144
(legal 6th)
Infrastructure
9th /144
(roads 29th)
Macroeconomic
environment
108th /144
(Government debt 123rd )
Labour market
efficiency
5th /144
(Quality of Maths & Science
43rd)
Technological
readiness
3rd /144
(Mobile broadband 16th)
Highlighted problems for businesses
• Access to finance for business
• Skills gaps in the workforce
14. Overview of Strategies to Improve Competitiveness
Competitive exchange rate – managed floating?
Competitive tax environment - getting the right mix
Investment in human capital
Increased research & development
Market competition to raise productivity
Stable macroeconomic environment
Investment in critical infrastructure + balanced growth
16. Competitiveness is affected by the exchange rate
65.0
70.0
75.0
80.0
85.0
90.0
95.0
100.0
105.0
110.0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
ERI
€ : £
$ : £
The exchange rate index (ERI) is a trade-weighted measure of sterling against a
basket of currencies – weighted by the share of UK trade with each country
17. Competitiveness – Importance of Human Capital
Returns to research and development and subsequent innovation depend
critically on the human capital base of countries, which determines their
capacity to recognize, assimilate, and apply new technologies
Skills Workplace training to increase people’s occupational mobility
Enterprise Programs for start-ups e.g. Start-Up Chile, Young Innovative
Companies in France, Entrepreneurship First (UK)
Mobility Housing market reforms to improve affordability and geographical
mobility
STEM Investment in improved access to and quality of teaching in STEM
subjects (Science, Technology, Economics!, Engineering and Maths)
18. Total Research and Development Spending, 2011–15
Total R&D spending include public and private sector R&D
Research and development expenditures are concentrated mostly in advanced economies and China,
followed by the large emerging market and middle-income economies (Source: IMF, April 2016)
19. Companies with the most US patents granted in 2015
This statistic shows how many patents had been assigned to businesses as of the end of 2015. IBM had
7,355 patents assigned to them at this time and was by far the leader in this respect.
7,355
5,072
4,134
2,900
2,835
2,627
2,455
2,242
2,048
1,956
1,938
1,838
1,774
1,757
1,627
0 1000 2000 3000 4000 5000 6000 7000 8000
International Business Machines Corp
Samsung Electronics Co Ltd
Canon KK
Qualcomm Inc
Google Inc
Toshiba Corp
Sony Corp
LG Electronics Inc
Intel Corp
Microsoft Corp
Apple Inc
Samsung Display Co Ltd
Taiwan Semiconductor Manufacturing Co
General Electric Co
Ricoh Co Ltd
Number of granted U.S. patents
20. Competitiveness – The Importance of Innovation
Innovation drives progress and, in economic terms, determines
productivity growth which in turn drives prosperity.
R&D Tax Credits (used
in Australia & South
Korea)
Patent Box Initiative –
10% corporation tax
(a UK Policy)
Public R&D and more
Funding for Higher
Education
Highly skilled migrants
policy e.g. skilled
coders
Nurturing an
entrepreneurial
culture
Increasing intensity of
competition within
markets
21. Innovation & Competitiveness – Creative Destruction
Innovation requires strong human capital, institutions and incentives
Three-
dimensional
printing
Big data Li-Fi
Driverless cars
Artificial
intelligence
Personalised
health
programmes
Gamification
Sharing
economy
Marketing
intelligence
Entrepreneurship is linked to the notion of creative destruction, described by
economist Joseph Schumpeter, whereby new enterprises enter the market and
encourage greater competition and innovation
22. Evaluating Fiscal Policy and Research / Innovation
Fiscal Support to Private Research and Development
(R&D), 2013 (Percent of GDP)
Subsidies lower the cost of research
Tax incentives can encourage
commercialisation of ideas
Lower employment taxes to
stimulate skilled migration
Lower capital gains taxes encourages
small businesses / start-ups
Special economic zones to attract research-
intensive businesses
Some options for fiscal policy incentives
23. Low capital investment can hold back competitiveness
Source: HDI report 2015, UNDP
Investment spending as a % of
GDP, average for 2005-2013
Gross fixed
capital formation
Gross fixed
capital formation
(% of GDP) (% of GDP)
China 47.3 Ghana 22.7
Mongolia 44.2 Norway 22.6
Ethiopia 35.8 Japan 21.7
Indonesia 31.7 Russian Federation 21.5
South Korea 29.7 Mexico 21.0
Bangladesh 28.4 Germany 19.8
Australia 28.3 Malawi 19.7
India 28.3 United States 19.3
Malaysia 26.9 South Africa 19.3
Singapore 25.9 Spain 18.5
Zambia 25.9 Brazil 18.2
Hong Kong, China (SAR) 23.9 Côte d'Ivoire 17.0
Uganda 23.8 United Kingdom 16.4
Vietnam 23.8 Ireland 15.2
Canada 23.7 Cuba 12.2
Chile 23.6 Greece 11.2
Key Evaluation Point: The quality of investment and the human capital
to use it productively is significant in the long run
24. Why Macro Stability Matters for Competitiveness
Price stability
• Lowers investor risk
• Relative export prices fall
• Reduces yields on long term
bonds for govt and businesses
GDP growth
• Size of market incentivizes
foreign direct investment
• Length of the pay-back period
for R&D is reduced
Financial stability
• Access to credit for SMEs
• Funding for infrastructure
spending (vital in long run)
-2.5
-2
-1.5
-1
-0.5
0
0.5
1
1.5
2
350
370
390
410
430
450
470
Q12003
Q12004
Q12005
Q12006
Q12007
Q12008
Q12009
Q12010
Q12011
Q12012
Q12013
Q12014
Q12015
Real GDP for the UK Economy
Growth, seasonally adjusted (%)
Levels, seasonally adjusted (£ billion)
26. Competitiveness – What Really Matters?
• Macro competitiveness has micro foundations
• Competitive markets and innovative businesses
• Skills, aptitudes and attitudes within the workforce
• Expanding opportunities for women entrepreneurs /refugees
• Recognition that infrastructure and innovation are crucial
• Increasingly – competitiveness will flow from smart
urbanization
• Competitive advantage comes from having
• Globally scaled businesses close to or at the technological frontier
• A culture of innovative business start-ups / social entrepreneurs
• A financial system that provides appropriate and affordable credit
for education, business research and funding for business expansion
• Reliance on currency depreciation / devaluation and wage
cuts is not a sustainable competitiveness strategy
• The most competitive countries have the highest minimum wages
• There is a continuous global battle for the most talented workers
• “Races to the bottom” e.g. in taxes and wages have limited impact
27. Policies to Improve International Competitiveness
Improving functioning of Labour Markets
• Investment in all levels of education and training
• Encouraging inward migration of skilled workers
• Improvements in management quality
Critical (Core) Infrastructure Investment
• Better motorways, ports, hi-speed rail, new sewers
• The Northern Powerhouse project
• Communications e.g. super-fast broadband, 4G networks
Supporting Enterprise / Entrepreneurship
• Improved access to business finance e.g. for start-ups
• Incentives for business innovation and invention
• Reductions in business red tape
Macroeconomic Stability
• Maintaining low inflation / price stability to help confidence
• A sustainable and more competitive banking system
• A competitive exchange rate v major trading partners
28. Analysis Diagram: Market Failure in Innovation
This is a good analysis
diagram to use to show the
under-investment in
research if R&D is regarded
as having positive
externalities.
The private optimum level of
research is at A where
MPB=MPC
Whereas from a society
point of view we would want
to take account of the
externalities. A corrective
incentive such as a subsidy
would help to lower the
private cost and expand
research to level B
29. Economic Growth using AD-AS Diagrams
General
Price Level
Real GDP
GPL1
AS1
Y1
AD1
Yp1
LAS1
A rise in a country’s
productive
potential is shown
by an outward shift
of long run
aggregate supply
(i.e. LAS1 to LAS2)
This means a higher
level of aggregate
demand can be
met because of an
increase in the
supply capacity
LAS2
AS2
AD2
Yp2Y2
The persistent weakness in productivity has puzzled economists and there are many alternative theories to explain it, including: weakness in investment that has reduced the quality of equipment employees are working with; the banking crisis leading to a lack of lending to more productive firms; employees within firms being moved to less productive roles; and slowing rates of innovation and discovery.