May 17th, 2012, by: Natalia Gimpel
The recent findings of the two yearly PISA survey by the OECD to the performance of math, science and reading comprehension skills students of 15 years old students in 65 countries stressed the importance of quality of education systems for their future competitiveness. With the transition to knowledge driven economies high quality education systems are becoming one the main assets to ensure a sustainable supply of talent and thereby attracting companies to set up operations.
Relationship between quality of the education system and percentage of GDP spend on education (based on the Global Competitiveness Survey 2011-2012 by the World Economic Forum and the CIA World Factbook 2011; Global-Arena.com analysis)
Size of budgets for education is less important…
According to the PISA survey 2009 students from countries like Korea, Finland, Singapore, Canada, New Zealand, Japan, Australia and The Netherlands perform best on the PISA indicators. Furthermore, students from Hong Kong and Shanghai rank on top too. The PISA ranking suggests that in particular advanced economies score above average, but additional research shows that there is no guarantee between national wealth or total expenditures on education and the student’s performance. Among high-income economies, the amount spent on education is less important than how those resources are used. We see these findings confirmed by our analysis of most attractive business environments, talent supply and high growth opportunities.
… having highly qualified and dedicated teachers seems more decisive
According to the OECD one of the most decisive factors determining the performance of students on the PISA tests is the quality and dedication of teachers. Countries that perform well in PISA test attract the best students into the teaching profession by offering them higher salaries and greater professional status.
Quality of education also key to attract global talent
Besides ensuring a sustainable domestic talent supply, high quality education systems also attract foreign talent. Good examples are the leading US and UK universities, such as Harvard, Yale, Oxford and Cambridge. Since decades they are able to attract talent from al over the globe. From that perspective offering high quality education facilitates creates an extra influx of talent and strengthens the talent supply.
Arjen Goetheer, CIO Global-Arena.com
Article tags: Business, Competition, Competitive advantage, Economic growth, Education, Education quality, global-arena, OECD, Talent, Talent environment, Talent supply
Posted in: Australia, business environment, business locations, Competition, Education quality, Finland, global-arena.com, Harvard Business School, New Competition for Growth, New Zealand, OECD, PISA test, Singapore, Talent, Talent environment, Talent supply, The Netherlands
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May 9th, 2012, by: Natalia Gimpel
Austerity or government investments to achieve growth? According to Ms. Christine Lagarde, Managing Director of the IMF, a mix of both is needed to achieve balanced growth. Only a well paced country specific fiscal adjustment combined with labour and product market reforms are the solution to overcome the current economic and financial instability and achieve economic and labour market growth. Lagarde explained the challenges the world faces today and emphasised that a joint effort of advanced and developing countries is required at a lecture organised by the Swiss Institute for Foreign Research (SIAF) at the University of Zurich
Global growth is estimated about 3,5% in 2012
The IMF estimates the global economy will grow with 3,5% this year. However, there are big differences: advanced economies are expected to grow 1,5% in 2012, with a mild recession in Europe, whereas developing countries are doing much better with growth of about 5 ¾% in 2012. These figures are far below those of the last years causing a global rise of unemployment and in particular hitting young people and might cause social and political instability, in particular in developing countries.
Estimated GDP growth in percentages for the next five years (IMF World Economic Outlook Database April 2012, Global-Arena.com analysis)
Reforms needed to regain competitiveness
Lagarde stressed that the measures and pace differ for each country in order for them to return to growth and that the focus shouldn’t be on short term fiscal measures themselves, but on achieving the fiscal goals in due course. Besides fiscal austerity Lagarde emphasised that these measures should be combined with structural reforms. The US needs to implement it’s housing reform, like Iceland and Ireland already did. Southern European countries should reform their labour and product markets to regain competitiveness by lowering their minimum wages, and by increasing competition in markets such as transportation and construction. On the other hand export driven economies like China should strengthen their domestic consumption market to rebalance the global economy. At the same time a collective effort is needed to reform financial markets should be reformed and a global safety net should be created.
Arjen Goetheer, CIO Global-Arena.com
Article tags: Austerity, China, Foreign direct investment, global-arena, Growth, IMF, Labour market, Lagarde, Reform, unemployment, United States
Posted in: Austerity, China, Competition, Developed economies, Economic growth, EU, global-arena.com, Iceland, Ireland, Labour market, New Competition for Growth, Structural reforms, US
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May 8th, 2012, by: Natalia Gimpel
In today’s global economy the development of clusters receives much attention from policy makers. The most important reason for this growing interest is that clusters foster high levels of productivity and innovation, supporting companies to compete globally. Research shows that the stronger the cluster, the higher the survival rate of new businesses, the more dynamic the process of new business formation, the more likely new industries within the cluster emerge and the higher the job growth in new business (Delgado, Porter & Stern, Clusters, Convergence, and Economic Performance, 2010). Although cluster initiatives date from the early 90’s, many governments still struggle with the question how to support and strengthen their clusters effectively. To exchange new insights over 400 cluster policy makers and business representatives gathered to discuss this topic at the three day European Cluster Conference in Vienna.
Location still matters
In theory, location should no longer be a source of competitive advantage. However, despite the process of ongoing globalisation, rapid transportation, and ICT enabling businesses to source any thing from any place at any time, in practice location still remains central to competition. According to Porter “geographic, cultural, and institutional proximity provide businesses with special access, closer relationships, better information, powerful incentives, and other advantages that are difficult to tap from a distance” (Porter, 1998). With the transition to a more complex, knowledge-based, and dynamic world economy, location is even becoming more decisive.
Competitive business environment to attract inward investment
The most direct way policy makers can stimulate and promote their cluster development is via the creation of a competitive business environment. Policy initiatives should therefore be focused on:
- stimulating linkages between all the players in the ecosystem: from specialised suppliers and service providers, to research institutes, start-ups and manufacturers by facilitating and organising informal networking;
- offering world class knowledge with state of the art research facilities; and
- creating a high market demand.
The clusters which succeed most in offering these environments, such as Silicon Valley, Baden-Wurttemberg and Bangalore, will not only be the most competitive, but also be most successful in attracting inward investment and thereby strengthen their competitiveness and contribute more to economic growth. Furthermore, these clusters become more and more attractive for talent since they offer a vibrant environment to work, with opportunities for ongoing development and education as well as career and networking opportunities.
Arjen Goetheer, CIO Global-Arena.com
Article tags: Baden-Wurttemberg, Bangalore, Business environment, Economic growth, European Cluster Policy, Inward Investment, Michael Porter, Silicon Valley
Posted in: Baden-Wurttenberg, Bangalore, business environment, Clusters, Competition, EU, global-arena.com, Globalisation, Harvard Business School, Innovation, Inward investments, Michael E. Porter, New Competition for Growth, Policy, Silicon Valley, Talent, Talent environment
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April 27th, 2012, by: Natalia Gimpel
Big multinationals, as well as smaller international companies and industry associations stressed the importance of immigration for their competitiveness at the 22nd International Europe Forum Conference “Immigration in Dispute” in Luzern (Switzerland) on April 23rd. They all are looking for global talent to fulfil their job openings, since local labour markets don’t meet their requirements. However, immigration is in many countries a societal and politically sensitive topic. The question how to deal with this was discussed extensively.
Global competition for talent
Despite the use of talent scouts to spot talent globally, pharmaceutical giant Roche often needs at least 12 months to fulfil critical job openings. Global HR Director Silvia Ayyoubi explained that the company, in close collaboration with local authorities, international schools and MBA programmes developed a comprehensive policy not only to be able to attract global talent, but also to retain them. Not only big corporations face the difficulties of finding the best candidates for the job openings. Hospitals, international operating construction firms and high tech companies also experience them. Due to ageing the problem is expected to increase and according to academics the only way to ensure the supply of talent is sustainable immigration.
Tightening immigration limits growth opportunities and damages the country’s image
However, due to lacking objective information and societal discontent, immigration has increasingly become a highly sensitive political subject. Not only in Switzerland, also in France and The Netherlands the debates are increasingly intense and migration policies are tending to tighten. This development not only makes it much harder for companies to attract global talent, but it also damages the country’s image as an attractive place to work.
Demand driven immigration policies could be a solution
To ensure economic growth politicians should therefore look for ways to develop sustainable immigration policy frameworks that meet societal discontent and enable companies to stay competitive on the long term. On the one hand politicians need to explain carefully to their voters that the immigration of highly skilled foreign employees is not only a economic necessity, but contribute to their welfare and show that the influx is beneficial for society since the country has not had to invest in these immigrants. On the other hand they need to promote their attractiveness as a destination of talent by offering a environment in which talent is welcome and can integrate easily. The immigration policy of Sweden seems to be an interesting example. To meet economic and societal needs of a foreign workforce the Nordic country developed a complete demand driven immigration policy allowing companies to attract skilled employees abroad without intervention of the government.
Over the last five years the attractiveness of many countries for retaining and attracting talent has changed significantly. The figures in the chart above show that some countries, in particular African countries such as Ghana, Senegal and Nigeria, improved their attractiveness, while others, such as many Central and Eastern European countries faced a decline in attractiveness and therefore need to fear a so-called brain drain. The chart is based on the item Brain Drain (Does your country retain and attract talented people?) of the Global Competitiveness Survey of the World Economic Forum and uses a 7 point scale (1= best and brightest normally leave to other countries; 7= there are many opportunities for talented people within the country).
Arjen Goetheer, CIO Global-Arena.com
Article tags: African countries, Ageing, Brain drain, Business, Central and Eastern European countries, Competetion for Talent, Competitive advantage, Immigration, Roche, Sweden, Talent environment, Talent supply
Posted in: Brain drain, business environment, business locations, Central Europe, Competition, Eastern Europe, Ghana, Immigration policy, New Competition for Growth, Nigeria, Roche, Senegal, Sweden, Talent, Talent environment
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March 20th, 2012, by: Natalia Gimpel
Talent tends to be, like capital, more and more mobile. According to academics such as Richard Florida and futurologists like Daniel Altman, this group will be looking for lifestyle hubs to live, work and venture and leaving the expensive ones where environmental climate and crime are problematic. Due to technological progress allowing people to work anywhere anytime, the question is which countries offer not only a competitive business environment with high growth opportunities, but also offer the most attractive environment for talent to work. With the fast growth of expanding multinationals from emerging countries the competition in attracting talent and assuring a sustainable supply of a skilled labor force has entered a new level for internationally operating businesses. In their location decision making processes, besides a competitive business environment with excellent innovation capabilities, the supply of talent and skilled labor are becoming more decisive than before. Global-Arena.com’ latest comparative advantages benchmark to global high growth opportunities shows that while emerging economies offer high growth market potential in terms of GDP growth rates and favourable demographics, they offer less attractive talent environments.
Entertainment, comfortable climate, low cost, open culture and personal growth opportunities
Talented graduates full of ambition and not willing to wait for possible future career opportunities at home and therefore more than ever look globally. Due to the continuing process of globalisation with its advanced ICT infrastructure, integrated social and economic relations and affordable air connections, global talent is seeking the best places to live, work and venture. Like the group of financially self-sufficient professionals this group prefers to work in so-called lifestyle hubs: places where they can live the lives they’ve imagined or even designed themselves. In their location decision making processes the most decisive factors are the supply of things to do, weather conditions, quality of life, globalised societies and personal growth opportunities.
Emerging economies offer high market potential with attractive career opportunities…
To provide indepth insights Global-Arena.com in association with Experian developed an interactive and comprehensive comparative advantages benchmark study for global growth opportunities assessing not only the growth drivers and competitiveness of business environments, but also including the attractiveness for global talent. The analysis reveals that in particular emerging economies such as Qatar, China, India, Azerbaijan, Singapore, Tanzania, the United Arab Emirates and Bahrain show the most favourable economic growth forecast figures for the coming years and will be in a good position to attract most business investments to expand these markets. For many international business as the strategic focus will be on these countries and therefore offer attractive career opportunities for global talent.
… but lack attractive talent environments
However, when the indicators infrastructure capacity, quality of available education institutes for ongoing education, quality of life (including supply of things to do, environmental performance, cost of living, human standards and homicide rates) and extent of globalisation are taken into account, the analysis shows that countries such as the United States of America, France, Switzerland, Germany, the United Kingdom, The Netherlands and Sweden offer the most attractive environment for global talent (see global map with the most attractive talent environments). Strongly Western oriented high growth countries such Singapore and China Hong Kong SAR show comparable levels of globalisation, but rank lower on aspects like cost of living and the of availability of things to do (restaurants, shops, activities, natural and cultural heritage sites). Bigger emerging countries like China and India show less favourable environmental quality, whereas many of the South American and African high growth countries rank low mainly due to high homicide rates.
Find out which destinations are most preferred by talent or how attractive your country
Which countries offer the most attractive talent environment? Click here to adjust the sliders of the interactive analysis to set your own preferences and find out which country offers the best match or get insights into which comparative advantages your country hsa in attracting global talent.
Arjen Goetheer, Chief Innovation Officer, Global-Arena.com
Article tags: China, Competitive advantage, Economic growth, Emerging markets, global-arena, High Growth markets, India, United States
Posted in: business environment, China, Competition, Cost of living, Developed economies, Education quality, Emerging economies, Environmental performance, EU, global-arena.com, Globalisation, Homicide rate, Infrastructure capacity, Innovation, Life style hubs, Living standards, MIPIM 2012, Natural and cultural heritage sites, New Competition for Growth, Open culture, Quality of life, Restaurants, Talent, Talent environment, Things to do
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March 13th, 2012, by: Natalia Gimpel
According to a recent article by Michael E. Porter and Jan W. Rivkin the question “Where should we locate?” has never been more prominent in the minds of executives than today. Identifying global growth opportunities and assessing the competitiveness of locations is top priority for businesses as well as for governments. Since the old laws of economic growth and competition have changed permanently with the rise of high growth emerging economies and the financial crisis, The New Competition for Growth has started. In the new set of growth dynamics, besides a competitive business environment, innovation capabilities and a sustainable supply of talent and skilled labor are becoming most important in location decision making processes. Today Global-Arena.com in association with its strategic partners launched its campaign “The New Competition for Growth” at MIPIM 2012 in Cannes and presented as part of a new series of benchmark studies its comprehensive comparative advantages benchmark to global high growth opportunities. The benchmark reveals that although emerging economies such as China and Qatar shows the most promising market potential, the United States of America and Switzerland are the ones with most competitive business environments.
The New Competition for Growth
With the rise of emerging economies such as Brazil, China and India as new global economic powers the international competition for attracting and retaining high value investments has increased intensively. Besides the competition at national level, also the competition between the expanding multinationals from emerging countries and the ones from developed countries entered a new level in attracting talent and assuring a sustainable supply of a skilled labor force.
As part of its campaign “The New Competition for Growth” Global-Arena.com (in association with its strategic partners Experian, SILC-Global, CEIBS, PWC and CLS) is expanding its capabilities and thought leadership to support executives in their search for global high growth opportunities, enabling effective decision making processes.
Emerging markets show most attractive market potential…
Using demographic and economic indicators to forecast the market potential, the study reveals that emerging economies such as Qatar, China, India, Azerbaijan, Singapore Tanzania, United Arab Emirates and Bahrain rank highest (click here to view the map). These countries show high levels of annual GDP growth rates (in particular Azerbaijan, Qatar, China and India) combined with positive demographic change rates. Compared to these high growth countries Western countries (with exception of Luxembourg, the United States, Israel and Australia) show a less favourable performance.
… but most developed economies still outperform on most competitive business environment
Despite the excellent forecast for market potential the emerging economies are currently not the ones with the most competitive business environments. When the indicators total tax rate, innovation capabilities and the quality of governance are taken into account the analysis shows that Switzerland offers the most competitive business environment. This result is not unexpected since Switzerland also holds the first position in the annual World Economic Forum’s Global Competitiveness Report 2011-2012. Other developed economies with competitive business environments are Finland, Denmark, Canada, Luxembourg, Sweden, The Netherlands and Israel (click here to view the map). However, high growth economies such as Singapore, Qatar, China Hong Kong SAR and Taiwan already show comparable levels of competitive business environments and are increasingly closing the gap with the developed economies.
Find out where you should locate or how your country performs
Which high growth countries offer the most competitive business environments for your business? Click here to adjust the sliders of the interactive analysis to set your own preferences and find out where you should locate or get insights in which comparative advantages your country has.
Arjen Goetheer, Chief Innovation Officer Global-Arena.com
Article tags: China, China Europe International Business School, Economic growth, Emerging markets, India, Qatar, United Arab Emirates, United States
Posted in: business environment, business locations, China, Competition, Developed economies, Emerging economies, EU, FDI trends, global-arena.com, MIPIM 2012, New Competition for Growth, Switzerland
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February 16th, 2012, by: Natalia Gimpel
Attracting international companies to locate R&D activities in their home country is top priority for all European investment and promotion agencies. In particular attracting new R&D facilities is of interest since these investments are seen as key to generate growth and high skilled job creation. By promoting their unique innovation capabilities, such as presence of leading universities, unique research facilities, availability of a highly skilled workforce, presence of clusters of excellence and special tax regimes for innovation the European agencies compete not only each other, also other developed countries are competitors. New in this competition for growth are the emerging economies. According to the Innovation Union Scoreboard 2012 published by the EU last week, competition will increase significantly. South Korea already outperforms the EU on innovation performance and China is closing the gap with the EU.
South Korea already ahead of EU
With the annual scoreboard the EU measures its innovation performance. The scoreboard compares the EU countries and its main competitors based on 24 indicators key for stimulation innovation. Of the emerging economies South Korea is best performing on innovation according to the scoreboard 2012 (see Figure 1). In particular the Asian Tiger is outperforming the EU 27 on private R&D expenditure and patent applications.
When will China outperform the EU?
With respects to the BRICS (Brazil, Russia, India, China and South Africa), China is the only one to close the innovation gap with the EU continuously in the last five years (see Figure 2). The scoreboard shows that the EU is still performing better than China in most indicators. The exception is exports of medium and high- tech products, in which China further increased its lead the last years. However, China has decreased its innovation gap on many elements, in particular the numbers of public-private co-publications, numbers of patent applications, license and patent revenues from broad, numbers of international co-publications and private R&D expenditures. Since China has a very strong track record in meeting or even exceeding many of its targets in previous five year plans and boosting R&D and innovation in focus areas like energy, automotive, IT infrastructure and biotechnology, which are key in the 12th Five Year-Plan (2011-2015) we may expect that China will strengthen is innovation performance increasingly the following years. The improvement of its innovation capabilities combined with China’s enormous economic opportunities and Europe’s financial crisis will increase the competition with EU countries for attracting private R&D facilities in the targeted focus industries. These developments make clear that if Europe wants to maintain its competitiveness it needs to boost its efforts to stimulate and speed up innovation.
Arjen Goetheer, CIO Global-Arena.com
Article tags: BRIC, China, Emerging markets, European Union, Five-Year Plans of the People's Republic of China, Four Asian Tigers, India, South Korea
Posted in: business locations, China, Competition, EU, Innovation, New Competition for Growth, South Korea
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December 22nd, 2011, by: Natalia Gimpel
The Aviation industry is feeling the impact of the current global economic slowdown. That is having an immediate effect in the logistics sector; the airfreight volumes have fallen sharply and are not expected to recover soon. This has an impact on developments centered on logistics. Many plans are halted waiting for better times. Despite of that, other plans are based on a more diversified portfolio than logistics alone, and we still see major developments in progress in places like Berlin Brandenburg, London Gatwick and Zurich Kloten.
The vision of Dr. John Kasarda, as he lays down in his book “Aerotropolis, the way we will live next”, is not yet in full deployment, but there is a strong trend to select business locations on their connectivity by air, as we did in former days by ships, railroads and cars. Many of our current Metropolises originated from those junctions.
Airports try to arrange transport to the final destination of business travelers in a hassle-free manner, but success is limited and congestion always a risk. So more and more companies chose to shorten the total trip time by setting up operations at, or very close to, the airport. By modeling these locations as business parks we create a successful business environment, further enhanced by themed clustering. This also encourages Business Service providers to set up at these locations.
The outlook for air travel remains positive, of course motored by developing economies, but also Western airports expect continued growth. In the Far East there are good examples of newly constructed airports with room for economic development integrated in their design, in Europe we also find that at Berlin Brandenburg (new airport with integrated business area’s) and Paris Charles de Gaulle (as the result of the visionary design made decades ago). Places like Copenhagen, Amsterdam and Munich have ample room for similar developments. In the USA Detroit and Dallas-Fort Worth also focus on developing the airport as the motor for wide spread economic development.
If projects meet market’s demands, there is a huge interest in business locations combining excellent connectivity by air with good business environments.
By Ruud Storm, Founding Partner at Global-Arena.com and Captain Boeing 737 NG at KLM
Article tags: Aerotropolis, Dallas–Fort Worth metroplex, Economic development, Gatwick Airport, Paris-Charles de Gaulle Airport
Posted in: business locations, Metropolitan, Uncategorized
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September 22nd, 2011, by: Natalia Gimpel
According to a recent survey presented at the International Economic Development Council (IEDC) Annual Conference this week in Charlotte (NC), USA, more Economic Development professionals are embracing Social Medias to promote their business locations at regional level as well as at national and international level.
The survey, which involved 307 professionals in the Economic Development sector, was carried out by IEDC and Development Counsellors International (DCI). The findings indicate that a growing number of economic development agencies are implementing Social Media. 63% of the professionals confirmed that their organization is using social media since less than one year, while 30% of them said that they have been using social media for 1 to 2 years now. A good number of the professionals recognized that social media will become increasingly important in the coming three year.
The results in numbers:
- 57 % of the 307 interviewed responded that their organization use social media within their communication efforts.
- 77% of the staff members managing social media are full time and have other responsibilities.
- 41% use social media to communicate frequently or very frequency at regional level, while 30% uses social media with the same frequency to communicate nationally and internationally.
- LinkedIn and Facebook, in this order, are considered the most valuable social media to communicate inside and outside their regions.
- Social Medias are used, within the region to communicate: organization news (28%), Project wins/ Expansions/ Retentions (21%), support for local businesses (19%), and local events (18%).
- Economic Development organizations that were mentioned as using social medias in the most effective way are: Indy Partnership, Metro Orlando Economic Development Commission, Metro Denver Economic Development Corporation, and Gwinnett Chamber.
Global Arena recognizes these findings in its own experiences. The fact is that more economic development organizations (EDOs) and investment promotion agencies are looking for new ways of promoting their business locations online. From our personal experiences offering Location Marketing Solutions, we can say that American economic development agencies having taken a proactive step in this matter during the past 12 months. European and Asian investment promotion agencies (IPAs) are still holding a step back regarding the importance of promoting their business locations online.
In the context of IEDC and DCI survey results, Global Arena encourages IPAs worldwide to take the leadership and spread the word regarding what the regions and business locations have to offer to investors. If IPAs and EDOs don’t communicate the competitiveness and business advantages of their regions for investment attraction, who will?
Article tags: Charlotte North Carolina, Facebook, global-arena, International Economic Development Council, LinkedIn, Social media, United States
Posted in: business locations, FDI business, FDI trends, Surveys
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September 1st, 2011, by: Natalia Gimpel
The engine for Israel’s competitive advantage and growth is not technology, it is creativity. So says Mr Margalit founder and chairman of Jeruzalem Venture Partner.
If you think about it, Israels technology sector cannot rely on its own market (the army) nor on its neighboring countries and markets for its growth. Companies have to be global by design. Some say that Israel’s success depends on a well funded scene of hyper smart elite entrepreneurs that can rely on a broad well educated mass of workers. To continue its growth Israel’s technology sector and entrepreneurial scene had to solve two problems; First, it had to become less dependent on ties with the army and; second, it had to transform its technology focus from clever technology to customer focussed innovation that moves global consumers.
Going forward, in the current economic climate, Israel must also be able to deal with less foreign funding for their entrepreneurial scene.
What is most interesting is that Israel’s entrepreneurial scene shows the power of FDI coming from leading global corporations buying startup companies. A lot of major Cities are focused on developing intellectual capital and talent but they lack focus on funding that was so instrumental to Israel’s technology success.
What do think are great examples of Cities that have balanced talent supply, technology transfer and venture funding?
To read more about this topic, please visit the article Israel: Invention tension, by Tobias Buck, published in Ft.com.
Article tags: Business, Competitive advantage, Israel, Technology, Venture capital
Posted in: Uncategorized
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