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Connected Government

DEFINING NATIONAL COMPETITIVENESS

20 May 2011

National Competitiveness is a term that can be defined on a number of levels. At its most basic level, a country’s competitiveness requires a good use of human and natural resources for a country to achieve some goal. The goals that a country chooses are a reflection of the philosophy of the country, but they typically have two things in common: productivity and efficiency. A country can achieve a better competitive position through its ability to introduce productivity and efficiency into its use of these human and natural resources. Ultimately, the competitiveness focus of a country is intended to drive some higher order benefit – from improved quality of life to longer life expectancy – but the common language for such goals tends to focus on increasing the inflow of capital to the country, in the form of exports or foreign direct investment.

In short, national competitiveness represents a country providing a foundation that enables its human and natural resources to attract global attention – either as a trade partner or as a prime location for foreign direct investment. To drive the best long-term outcomes for a country, the focus should be on plans that are sustainable over the long term. This approach will ensure the competitive advantage will not run out (i.e., depleting the rainforests) or otherwise hurting the long-term viability of the country’s competitive advantage (i.e., continually exporting top-talent, hampering the potential for home-grown innovation or educating the next generation of talent). As stated above, a focus toward delivering differentiated, value-added services can be a source for such sustained competitive advantage, and helps ensure a sustainable economic driver in contrast to undifferentiated resource exports.

A MODEL OF A MODERN NATION

A framework that we had dubbed a “Model of a Modern Nation” contains four areas that represent basic services that a country’s government typically provides for its citizens, and these are:

• Education: Opportunity and prosperity are achieved and maintained primarily through sustainable economic growth, which is driven in large part by the collective ability to cultivate new ideas and transform them into innovative business models, products, and services. Individuals who possess critical thinking and digital literacy skills and who pursue lifelong learning encounter an entirely different life path than the ones available to those without an education.

• Health: A healthy population is critical for national competitiveness in a number of important ways. A healthy workforce is more productive over a longer time horizon—an important objective for countries facing the challenge of an aging population. And countries that are able to minimise healthcare costs as a percentage of GDP can invest the savings in other areas that foster economic growth.

• Public Safety: Communities have high expectations of their public safety agencies, such as police, fire, and emergency response departments, as well as the court system. Pressure to operate more efficiently and increase staff productivity is compounded by the growing challenges of terrorism, organised crime, and illegal online activity.

• Transparency: Government transparency allows citizens to become more engaged in important political, social, and economic discussions and enables greater collaboration between the public and private sectors. Technology can help governments become more transparent, efficient, and effective in delivering services, thereby improving their interaction with citizens and businesses and improving the country’s overall economic competitiveness.

However, as countries seek to improve the quality of service of the basic functions listed above, technology offers clear opportunities to improve quality of service while reducing cost. As technology solutions are planned and implemented, it is critical that the following four areas are considered carefully and policy is implemented that reflects both the objectives and philosophy of the country:

• Security: A growing number of public- and private-sector organisations are adopting cloud computing to increase efficiency, gain cost savings, and realise other benefits. But as individuals, businesses, and governments increasingly rely on the cloud to exchange data and conduct transactions, security has become a top concern.

• Privacy: Cloud computing offers individuals and organisations innovative services, potential cost savings, and many other attractive benefits. Although cloud services such as email and instant messaging have been around for nearly 20 years, new privacy challenges are emerging as more data move to the cloud. Many laws that were designed to protect individuals’ personal information are no longer adequate, and users are increasingly concerned about whether the data they create, share, or store through cloud services will remain private and secure.

• Data Sovereignty: As governments incorporate cloud computing services into their operations and consider public policy issues associated with the cloud, the issue of data sovereignty has proven to be especially challenging. Data sovereignty considerations generally revolve around the geographic location or locations in which individuals’ information is stored and accessed. Some jurisdictions have laws that require government data to remain within specific geographic boundaries because of concerns about data control and risk mitigation. In other countries and regions, approaches to data sovereignty are influenced by cultural norms or philosophical beliefs.

• Openness: Governments today are taking advantage of transformative technologies – from the Internet and innovative mobile devices to social networking and cloud computing – to deliver services and information more efficiently, transparently and collaboratively. This technological evolution is driven in part by a strong desire for more openness – by technologies working together, vendors paying attention to their customers, and governments listening to their citizens. This desire for more openness comes from the fact that businesses and governments today have diverse and complex needs that no single IT company alone can address. There is a need for different kinds of software to work together - to foster industry growth and innovation, provide greater customer choice, and help to maximise return on IT investments.

Indonesia is a prime example of a country in the Asia Pacific region that is currently taking steps to address the pressing issue of intellectual property rights (IPR). On 26 April 2011, the Indonesian President Susilo Bambang Yudhoyono, at the National Convention on IPR held at the State Palace to mark the World Intellectual Property Day, encouraged Indonesians to respect IPR and promote innovation in a bid to boost the country’s economic growth.

He was quoted in a 26 April 2011 The Jakarta Globe article as saying: “This is for the sake of justice and the welfare of property rights owners. We should not let people’s creations be pirated, thus depriving them of any benefit.” In addition, President Yudhoyono recognises too the deep significance of a positive IPR environment in raising the country’s competitiveness vis-à-vis the region’s other emerging markets stating: “If we respect, acknowledge and protect IPR, we could be more competitive.”

Indeed, Indonesia has a strong opportunity to further grow its local software economy by fully leveraging on IPR since it already boasts a fledging local creative sector. Undoubtedly, coupled with a positive IPR environment, this will put the country in a good stead to further improve the investment climate and attract more foreign direct investments. In particular, a new Washington State Unfair Competition Law states that it is illegal for manufacturers anywhere in the world that uses illegal IT in its operations to sell its products in the state. By ensuring that Indonesian manufacturers adopt legal software, a level playing field is then created in the country that will help businesses in the ecosystem thrive regionally.

As a country is able to drive a transformation of the factors listed above, the objective of making efficient and productive use of the human and natural resources is the next logical area of focus, especially as it relates to value-added products and services:

• Workforce Development: A nation’s workforce is a renewable, sustainable resource that is critical to economic growth. Given the global economic challenges and the increasing demand for knowledge workers, cultivating an adaptable, skilled, and literate workforce should be a national priority for all countries. Workforce programs should be tailored to the needs of the information economy and should emphasise training strategies that increase citizens’ employability.

• Job Creation: Creating an environment that offers all citizens the opportunity to realise their potential through meaningful employment is a key element of a successful economy. Job creation is fueled by a variety of factors, including access to capital, innovation, education, skills development, reduction of barriers to business creation, intellectual property protections, and a business and regulatory environment that encourages entrepreneurship.

• Environmental Sustainability: Mitigating the impact that humans have on the planet has become one of the defining challenges of the 21st century. The global focus on reducing carbon emissions and making better use of natural resources is intensifying, and the theme of environmental sustainability is increasingly influencing economic activity, consumer choices, and government regulations and systems. As national governments grapple with minimising their environmental impact, they must continue to provide services to their citizens and ensure that their country’s economic growth is sustainable. Meeting these challenges requires innovation, more streamlined processes, and deeper insight into resource use and waste streams—advances that technology can help make possible.

The question remains, how best to prioritise these factors to ensure long-term success? No country can magically improve every pillar overnight, given we all operate in the real world where resource constraints and tradeoffs are a part of every decision. For countries that have celebrated a history of strong competitive positions that pre-date the global indices such as the World Bank and the World Economic Forum, much of the above has evolved organically over many years. However, for the rest of the world, the factors above can be optimised to help drive advancement in the key industries in which the country can truly differentiate itself on a global level.

Countries that compete successfully on a global scale often specialise in a discrete set of industries in which, through use of indigenous resources, investment, or both, they have developed world-class capabilities. These industry clusters often receive support from both the public and private sectors and are factored into long-term goals for education, workforce planning, R&D, and investment. Industry clusters can form the foundation from which new and successful industries emerge, and increasingly, those industries are heavily knowledge-based and are sustained by a pipeline of skilled workers.

Indeed, Software Park Thailand, an organisation under the National Science and Technology Development Agency (NSTDA) of Thailand, is already moving in this direction in propelling the country’s software industry. According to Ms Suwipa Wanasathop, Director of Software Park Thailand: “Software Park plays an important role in helping independent software vendors and startups make a success of their business and we are always striving to promote the local information technology industry within the international arena. For instance, our Incubation Center which helps Thai software developers test their ideas and take them beyond the initial development phase, as well as the Microsoft BizSpark program will make sure that developers receive all the support they need in order to keep the Thai software industry going from strength to strength.”

THE DUAL ROLE OF GOVERNMENTS TODAY

It is important to note that the government of a country can play at least two distinct roles in the framework laid out earlier above: a public policy role and a project/programmatic role. Each of these functions has the potential to help shape the competitive position of the country. Innovation, entrepreneurship and economic growth require both a policy foundation that sets up the operating mechanisms for a country as well as a certain amount of initial activity to ensure the system is primed to enable ongoing development atop a stable platform for growth.

On the public policy front, a country’s government is uniquely positioned to operate a number of layers that lay the foundation upon which business operates. From setting foreign trade policy to reflecting a country’s philosophy toward privacy in its cloud standards, the government has a broad spectrum in which it can enact policy without directly needing to spend any funds. Of course executing a customs system would require some level of investment, but the policy could be set without necessarily needing to implement anything. However, a country does have the potential to innovate at this layer, particularly in the technology areas of Security, Privacy, Data Sovereignty and Openness, and if managed appropriately, these innovations can set the stage for further innovation by its citizens.

With a solid public policy foundation, a number of domestic and international entities could help the economy develop through programs. While a government may have vested interests in the success of its own programs, it is frequently most successful in executing in partnership with a non-governmental organisation, an intergovernmental organisation, an international financial institution or private industry. Through public-private partnerships, government can implement projects that simultaneously focus on a number of pillars listed above that will help it achieve its objectives while using local and international funds to prime the system to enable local entrepreneurship.

Technology is a tool that can clearly and significantly help drive the effectiveness and efficiency of projects in the areas above. For example:

• In Education, cloud computing can help with communication and collaboration among students, faculty and staff.

• In Health, electronic medical records can help make it easier for a medical team to take a holistic approach to patient care, and make faster, earlier diagnoses. Cloud computing can help improve the quality of patient care and reduce costs. A gesture-based natural user interface that enables users to control a program with physical movement could make it easier for surgeons to manipulate diagnostic imagery without the need to scrub out of surgery.

• Cloud computing services can help public safety agencies meet its demands by enabling them to share information, coordinate activities, analyze data, and manage tasks using a flexible, cost-effective, and secure technology infrastructure.

• Technology can help with transparency by giving citizens real-time access to data related to decision-making and spending. Such visibility can even help build new business ecosystems that take advantage of publicly available government data.

• IT can also help a country go green. First, cloud computing is an inherently environmentally friendly choice – Microsoft’s cloud services focus on the environment from focusing on renewable energy sources to operational economies of scale. In addition, innovative software solutions can help measure and manage carbon emissions and resource use, increase energy efficiency, improve environmental modeling, and facilitate scientific research into renewable energy.

Using the framework above can help a country set priorities and drive change across the economic landscape. When appropriately applied, technology is an effective tool to help support efforts to drive efficiency and productivity, but can also be used to help aggregate information and communications into a format that can unlock new opportunities. Such opportunity can represent meaningful advances in the sustained competitive advantage for a country, which will in turn translate into economic growth.

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