Global Competitiveness Report 2004-05: Sweden’s Business Competitiveness
Christian H.M. Ketels, PhD Institute for Strategy and Competitiveness Harvard Business School
GCR Launch - Sweden Chamber of Commerce, Stockholm 13 October 2004 This presentation draws on ideas from Professor Porter’s books and articles, in particular, “Building the Microeconomic Foundations of Prosperity,” in The Global Competitiveness Report 2004-05 (World Economic Forum, 2004); “Clusters and the New Competitive Agenda for Companies and Governments,” in On Competition (Harvard Business School Press, 1998); Clusters of Innovation Initiative (www.compete.org), a joint effort of the Council on Competitiveness, Monitor Group, and ongoing research. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of the author Additional information may be found at the website of the Institute for Strategy and Competitiveness, www.isc.hbs.edu
Global Competitiveness Report
•
•
Annual publication of the World Economic Forum since 1979; in recent years academic guidance from – Professor Michael E. Porter, Harvard Business School – Professor Jeffrey Sachs (until 2002)/Professor Xavier Sala-i-Martin (since 2003), Columbia University Covers 104 economies; based on statistical data and global Executive Opinion Survey of 8,729 respondents (84 per country)
Content • Core chapters present the Growth Competitiveness Index and the Business Competitiveness Index • Nine other chapters by leading researchers on key competitiveness issues • Extensive data sheets on all economies covered
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Copyright 2004 © Professor Michael E. Porter
Ranking Competitiveness
Business BusinessCompetitiveness Competitiveness
Growth GrowthCompetitiveness Competitiveness
The Theset setof ofinstitutions, institutions,market market structures, structures,and andeconomic economicpolicies policies supportive supportiveof ofhigh highcurrent currentlevels levelsof of prosperity prosperity
The Theset setof ofinstitutions institutionsand andeconomic economic policies policiessupportive supportiveof ofhigh highrates ratesof of economic economicgrowth growthininthe themedium medium term term(coming (comingfive fiveyears) years)
Michael MichaelE. E.Porter Porter
Xavier XavierSala-i-Martin Sala-i-Martin
Focus of this presentation GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Competitiveness and Prosperity
• The Business Competitiveness Index measures the level of prosperity (GDP per capita) that an economy can sustain
Prosperity Prosperity
• Sustainable prosperity is set by the underlying competitiveness of the economy, which is determined by the level of productivity and – over time – innovation achievable by companies
Productivity Productivity
• Countries can overperform or underperform true competitiveness for substantial periods of time
Innovative Innovative Capacity Capacity
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Copyright 2004 © Professor Michael E. Porter
Determinants of Productivity and Productivity Growth
Macroeconomic, Macroeconomic, Political, Political, Legal, Legal, and and Social Social Context Context for for Competitiveness Competitiveness
Microeconomic Microeconomic Foundations Foundations of of Competitiveness Competitiveness The TheSophistication Sophistication of ofCompany Company Operations Operationsand and Strategy Strategy
The TheQuality Qualityof ofthe the Microeconomic Microeconomic Business Business Environment Environment
• Nations or regions compete in offering the most productive environment for business • A sound macroeconomic, political, legal, and social context creates the potential for competitiveness, but is not sufficient GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
The Business Competitiveness Index, 2004 Measured Elements
Company CompanyOperations Operationsand andStrategy Strategy
National NationalBusiness BusinessEnvironment Environment
•• Nature Natureof ofFirm’s Firm’sCompetitive Competitive Advantages Advantages •• Extent Extentof ofInnovation Innovation •• Sophistication Sophisticationof ofProduction Production •• Sophistication Sophisticationof ofMarketing Marketing •• Sophistication Sophisticationof ofOrganizational Organizational Structures Structuresand andIncentives Incentives •• Extent Extentof ofInternationalization Internationalization
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•• Factor FactorConditions Conditions –– Physical PhysicalInfrastructure Infrastructure –– Administrative AdministrativeInfrastructure Infrastructure –– Human HumanResources Resources –– Technology TechnologyInfrastructure Infrastructure –– Capital CapitalMarkets Markets •• Context Contextfor forFirm FirmStrategy Strategyand andRivalry Rivalry –– Incentives Incentives –– Policies Policiesaffecting affectingcompetition competition •• Demand DemandConditions Conditions •• Related Relatedand andSupporting SupportingIndustries Industries
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Copyright 2004 © Professor Michael E. Porter
Business Competitiveness Index 2004 Relationship with GDP Per Capita Norway
United States
35,000 y = 1549.9x2 + 8603.4x + 11188
30,000
Iceland Canada
R2 = 0.8064 Ireland Italy
2003 GDP per Capita 25,000 (Purchasing Power Adjusted)
Taiwan Spain Greece Cyprus Malta Portugal Czech Rep
20,000
15,000
Hungary Slovak Rep. Poland
Argentina Croatia Uruguay Russia Bulgaria
10,000
5,000
Bosnia Paraguay Bolivia
0
Austria Belgium France
Denmark Switzerland Netherlands Finland UK Sweden Singapore
Ethiopia
Mexico Turkey Jamaica
Vietnam Ghana Kenya Malawi
New Zealand Israel
Slovenia
S Korea
Estonia Lithuania Chile
South Africa
Malaysia
Brazil Tunisia
China Jordan Indonesia
India
Business Competitiveness Index Source:Global Competitiveness Report 2004 GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Prosperity 40,000 Norway
United States
35,000 Netherlands
Ireland Denmark
30,000 Japan GDP per 25,000 capita (PPP adjusted) 20,000 in US-$, 2003
Switzerland
Italy Germany
Canada Iceland Finland UK Sweden New Zealand
Spain
Greece
Portugal
South Korea
Czech Republic
15,000
Hungary
Slovakia Poland
10,000
Mexico Turkey
5,000 0 0%
1%
2%
3%
4%
5%
6%
Compound annual growth rate of real GDP per capita, 1998-2003
Source: EIU (2004) GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Sweden’s Economic Performance
•
Swedish prosperity continues to be high but lags leading OECD peers
Key drivers of Swedish prosperity •
Key strength is Sweden’s high labor productivity, among the best in the world although the gap to the United States has widened in recent years
•
Labor input is also high – Sweden reports a high share of employees in the population that is still compensating for low and falling work hours
•
Key weakness is the high level of local prices in Sweden, among the highest in the world, that are reducing the benefits Swedes derive from high productivity
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Copyright 2004 © Professor Michael E. Porter
Sweden’s Economic Performance Other Indicators Or not so strong?
Strong
•
Sweden has a strong position in international patenting
•
Patenting is reflecting high R&D spending
•
FDI stocks and inflows are substantial
•
FDI inflows are at the level predicted given the structure of the Swedish economy
•
Sweden’s world export market share has stayed roughly stable over the last decade
•
Sweden has lost ground on world markets in some key clusters
•
Sweden continues to be home to a relatively high number of multinational companies
•
Increasing concerns and reports about relocations, not only by large companies
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Copyright 2004 © Professor Michael E. Porter
The Microeconomic Foundations of Economic Performance Using the Business Competitiveness Index
•
Overall level of sustainable prosperity that can be supported given a country’s current competitiveness
•
Strengths and weaknesses of a country’s business environment relative to its overall level of competitiveness
•
Developments in the overall competitiveness and the strengths and weaknesses of individual countries
•
Overall patterns in the competitive environment for locations in the world economy
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Copyright 2004 © Professor Michael E. Porter
Business Competitiveness Index 2004 Business Competitiveness Index Rankings Top Country Change Top 25 25
Note: Constant sample of countries GCR Press Conference 2004 10-13-03.ppt
11 22 33 44 55 66 77 88 99 10 10 11 11 12 12 13 13 14 14 15 15 16 16 17 17 18 18 19 19 20 20 21 21 22 22 23 23 24 24 25 25
United States Finland Germany Sweden Switzerland United Kingdom Denmark Japan Netherlands Singapore Hong Kong SAR France Australia Belgium Canada Austria Taiwan New Zealand Iceland Norway Israel Ireland Malaysia Korea South Africa 12
+1 -1 +2 -1 +2 0 -3 +5 0 -2 +8 -2 -2 +1 -3 +1 -1 0 -5 +2 -1 -1 +3 -1 +2
Copyright 2004 © Professor Michael E. Porter
Business Competitiveness Report 2004 BCI Rank Versus Value US Germany Denmark Sweden Japan Netherlands
High
Singapore
Finland US Switzerland Germany Denmark Japan UK Sweden Netherlands
Norway Israel Ireland Malaysia South Africa S Korea Estonia Spain Slovenia Chile Portugal India Brazil Italy Cyprus Greece China Indonesia
BCI Score
High Income Middle Income Low Income
Mexico Malta Kenya Romania Sri Lanka GhanaRussia Argentina Serbia Tanzania
Pakistan Vietnam
Venezuela
Bosnia Low
Paraguay 93
BCI Rank
1
Source:Global Competitiveness Report 2004 GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Business Competitiveness Report 2004 The Prediction Gap: High Income Countries $15,000
Current prosperity above sustainable level
Current prosperity below sustainable level
$10,000
$5,000
$0
-$5,000
17% of GDP
Ita N ly or w Ir e a y la nd M a C lta yp r G us re ec Ic e el an d Sp a Sl ov in e C nia an ad Au a st r U Por ia ni t u te d gal S ta Au tes st ra H on B lia e g K lgiu on m g SA Fr R an ce N Ko et h e r ea rla D nd en s m a T a rk Sw i w i tz an er la n Ja d pa n I Si sra n e N ga l ew p o U ni Ze re te d ala K in nd gd o Sw m e G de er n m a F i ny nl an d
-$10,000
Source:Global Competitiveness Report 2004 GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Business Competitiveness Report 2004 Explaining the Prediction Gap Factors Influencing the Prediction Gap •
Location – Prosperity of neighbors – Population with access to ocean
•
Governance – Government Accountability – Government Effectiveness
•
Natural resources (NR) – NR export revenues
Other • Transitory impact of macroeconomic or political climate • Structural factors with no simple relationship to prosperity, e.g. taxation, imbalance of competitiveness profile
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Actual GDP per Capita
Predicted GDP per Capita Copyright 2004 © Professor Michael E. Porter
Business Competitiveness Report 2004 Explaining the Prediction Gap: Examples Location
Governance
Natural resources
Other factors
Overperformer
Underperformer
Mix
Why is prosperity so high
Why is prosperity so low
What are the countervailing forces
China
Norway
India
Italy
Sweden
Germany
Note: Effect of each factor normalized by the average of all countries Source: Global Competitiveness Report 2004 GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
g K
on Si g S ng A ap R Ic ore Sl el ov a ak Es nd t o R n ep ia u Ta bli c iw Ire an M la Sw ala nd U i t ys U nite zer i a ni d la te S n d d ta K N ing tes et d N he o m ew rla Z e nd a s Po lan r tu d Au gal s N tria or w La ay C tvia an a Ja da Li p th an u Sl an ov ia Au en s ia D tr a en lia m F i ark G nla er n d m a F r ny an ce I ta Po ly Sw lan e d G de eo n U rgia kr ai n Br e Be az lg il iu m
H on
Business Competitiveness Report 2004 Explaining the Prediction Gap: Taxation
Positive
Incentive Effect
Complexity
Negative
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Source: Global Competitiveness Report 2004
17 Copyright 2004 © Professor Michael E. Porter
Global Competitiveness Report 2004 Business Environment and Company Sophistication The Thenational nationalbusiness businessenvironment environment has advanced beyond has advanced beyondcompany company sophistication sophistication
Company Companysophistication sophisticationisis more moreadvanced advancedthan thanthe the national business environment national business environment
Estonia Estonia Tunisia Tunisia Norway Norway Cyprus Cyprus Portugal Portugal Australia Australia Malaysia Malaysia Jordan Jordan Botswana Botswana Hungary Hungary New NewZealand Zealand Algeria Algeria Hong HongKong KongSAR SAR Chile Chile Singapore Singapore
Philippines Philippines Japan Japan Germany Germany Korea Korea Italy Italy Guatemala Guatemala Venezuela Venezuela Switzerland Switzerland Costa CostaRica Rica France France Brazil Brazil Poland Poland Honduras Honduras Argentina Argentina Sweden Sweden Sweden
Note: Sorted by strength of imbalance Source: Global Competitiveness Report 2004 GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Sweden’s Competitiveness Profile Strengths and Weaknesses
Macroeconomic, Macroeconomic, Political, Political, Legal, Legal, and and Social Social Context Context for for Competitiveness Competitiveness
Microeconomic Microeconomic Foundations Foundations of of Competitiveness Competitiveness The TheSophistication Sophistication of ofCompany Company Operations Operationsand and Strategy Strategy
The TheQuality Qualityof ofthe the Microeconomic Microeconomic Business Business Environment Environment
• Relative strengths in areas of innovation, investment, and organizational structures • Relative weaknesses in marketing and the presence along the value chain GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Company Operations and Strategy Sweden’s Relative Position 2004
Competitive Advantages Relative to GDP per Capita
Competitive Disadvantages Relative to GDP per Capita
Country Ranking, Arrows indicate a change of 5 or more ranks since 1998
Country Ranking, Arrows indicate a change of 5 or more ranks since 1998
Willingness to delegate authority
1
Extent of regional sales
16
Capacity for innovation
2
Extent of marketing
12
Production process sophistication
3
Value chain presence
10
Extent of staff training
3
Extent of incentive compensation
10
Company spending on research and development
4
Nature of competitive advantage
9
Extent of branding
4
Reliance on professional management 9 Breadth of international markets
8
Degree of customer orientation
6
Control of international distribution
6
Note: Rank by countries; overall Sweden ranks 4 (5 on Company Operations and Strategy, 19 on GDP pc 2003) Source: Global Competitiveness Report 2004 GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Sweden’s Competitiveness Profile Strengths and Weaknesses
Macroeconomic, Macroeconomic, Political, Political, Legal, Legal, and and Social Social Context Context for for Competitiveness Competitiveness
Microeconomic Microeconomic Foundations Foundations of of Competitiveness Competitiveness The TheSophistication Sophistication of ofCompany Company Operations Operationsand and Strategy Strategy
The TheQuality Qualityof ofthe the Microeconomic Microeconomic Business Business Environment Environment
• Relative strengths in technology and innovation, level playing field for competition, administrative infrastructure, physical infrastructure, and basic financial market conditions • Relative weaknesses in competition, human resources, advanced demand conditions, and basic cluster conditions GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Factor Factor (Input) (Input) Conditions Conditions
Factor (Input) Conditions Sweden’s Relative Position
Competitive Advantages Relative to GDP per Capita
Competitive Disadvantages Relative to GDP per Capita
Country Ranking, Arrows indicate a change of 5 or more ranks since 1998
Country Ranking, Arrows indicate a change of 5 or more ranks since 1998
Quality of scientific research institutions
2
Extent of bureaucratic red tape
23
Internet users per 10,000 people (2003)
3
Quality of math and science education
21
University/industry research collaboration 3
Local equity market access
18
Efficiency of legal framework
3
Air transport infrastructure quality
17
Ease of access to loans
4
Quality of public schools
15
Patents per million population (2003)
6
Quality of electricity supply
14
Availability of scientists and engineers
6
Venture capital availability
13
Quality of management schools
12
Reliability of police services
11
Cell phones per 100 people (2003)
11
Overall infrastructure quality
10
Telephone/fax infrastructure quality
9
Administrative burden for startups
9
Note: Rank by countries; overall Sweden ranks 4 (6 on National Business Environment, 19 on GDP pc 2003) Source: Global Competitiveness Report 2004 GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Context Contextfor for Firm Strategy Firm Strategy and andRivalry Rivalry
Context for Firm Strategy and Rivalry Sweden’s Relative Position
Competitive Advantages Relative to GDP per Capita
Competitive Disadvantages Relative to GDP per Capita
Country Ranking, Arrows indicate a change of 5 or more ranks since 1998
Country Ranking, Arrows indicate a change of 5 or more ranks since 1998
Intellectual property protection
1
Intensity of local competition
39
Tariff liberalization
2
Extent of locally based competitors
33
Hidden trade barrier liberalization
4
Decentralization of corporate activity
24
Cooperation in labor-employer relations
5
Centralization of economic policy-making 22
Favoritism in decisions of government officials
5
Prevalence of mergers and acquisitions
20
Effectiveness of anti-trust policy
19
Business costs of corruption
6
Efficacy of corporate boards
17
Effectiveness of bankruptcy law
6
Foreign ownership restrictions
13
Regulation of securities exchanges
10
Protection of minority shareholders’ interests
9
Note: Rank by countries; overall Sweden ranks 4 (6 on National Business Environment, 19 on GDP pc 2003) Source: Global Competitiveness Report 2004 GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Demand Demand Conditions Conditions
Demand Conditions Sweden’s Relative Position
Competitive Advantages Relative to GDP per Capita
Competitive Disadvantages Relative to GDP per Capita
Country Ranking, Arrows indicate a change of 5 or more ranks since 1998
Stringency of environmental regulations
Country Ranking, Arrows indicate a change of 5 or more ranks since 1998
6
Government procurement of advanced technology products
19
Buyer sophistication
13
Laws relating to ICT
12
Presence of demanding regulatory standards
11
Note: Rank by countries; overall Sweden ranks 4 (6 on National Business Environment, 19 on GDP pc 2003) Source: Global Competitiveness Report 2004 GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Related Relatedand and Supporting Supporting Industries Industries
Related and Supporting Industries Sweden’s Relative Position
Competitive Advantages Relative to GDP per Capita
Competitive Disadvantages Relative to GDP per Capita Country Ranking, Arrows indicate a change of 5 or more ranks since 1998
Country Ranking, Arrows indicate a change of 5 or more ranks since 1998
Extent of collaboration among clusters
6
Local availability of components and parts 21
Local supplier quality
6
Local supplier quantity
20
Local availability of process machinery
14
State of cluster development
9
Local availability of specialized research and training services
8
Note: Rank by countries; overall Sweden ranks 4 (6 on National Business Environment, 19 on GDP pc 2003) Source: Global Competitiveness Report 2004 GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Business Competitiveness Index Sweden’s Position over Time Rank 1
5
1998 1999 2000 2001 2002 2003
10
2004
15
BCI Rank
Company Operation & Strategy Rank
National Business Environment Rank
• Sweden’s overall BCI index value has dropped slightly (32 advancing/39 falling indicators), balanced across all elements of competitiveness Note: Constant sample of countries Source: Global Competitiveness Report 2004 GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Swedish Competitiveness 2004 Key Observations Level of competitiveness • High and should support higher prosperity • Prosperity held back by taxes and imbalance between company sophistication and business environment quality Strengths and weaknesses • Strengths in areas related to technology and innovation, level playing field for competition, administrative infrastructure, physical infrastructure, and basic financial market conditions • Weaknesses in areas related to competition, human resources, advanced demand conditions, and basic cluster conditions Trend • Slightly positive development in the last few years • But 2004 seems to have been a lost year for competitiveness upgrading GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Appendix
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Copyright 2004 © Professor Michael E. Porter
Prosperity 40,000 Norway
United States
35,000 Netherlands
Ireland Denmark
30,000 Japan GDP per 25,000 capita (PPP adjusted) 20,000 in US-$, 2003
Switzerland
Italy Germany
Canada Iceland Finland UK Sweden New Zealand
Spain
Greece
Portugal
South Korea
Czech Republic
15,000
Hungary
Slovakia Poland
10,000
Mexico Turkey
5,000 0 0%
1%
2%
3%
4%
5%
6%
Compound annual growth rate of real GDP per capita, 1998-2003
Source: EIU (2004) GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Decomposing Prosperity Prosperity Prosperity
Domestic Domestic Purchasing Purchasing Power Power
• Consumption taxes • Level of local market competition • Efficiency of local industries
Income Income
Labor Labor Productivity Productivity
Labor Labor Utilization Utilization
• Skills • Capital stock • TFP GCR Press Conference 2004 10-13-03.ppt
• • • • 30
Working hours Unemployment Participation rate Population age profile Copyright 2004 © Professor Michael E. Porter
Productivity 80,000 70,000
Netherlands
60,000 Spain
50,000
United States Norway Austria Italy FranceBelgium Finland Switzerland Canada Sweden Denmark UK Germany Iceland Japan
Ireland
Greece
New Zealand
GDP per employee 40,000 (PPP adjusted) in US-$, 30,000 2003
South Korea Hungary Czech Rep. Slovakia
Portugal Mexico Turkey
20,000 10,000 0 -1%
0%
1%
2%
3%
4%
Compound annual growth rate (CAGR) of real GDP per employee, 1997-2002
Source: EIU (2004), Groningen Growth and Development Centre and The Conference Board (2004) GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Swedish Labor Productivity Growth Versus the U.S. Relative Real GDP per Employee (US=100) 77
Real GDP per Employee (1990 prices) $50,000 US $ $45,000
76
Relative
$40,000
75
$35,000
74
$30,000 73 $25,000 72 $20,000 71
$15,000
70
$10,000 $5,000
69
$-
68 1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
Source: Groningen Growth and Development Centre and The Conference Board (2004) GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Labor Utilization Selected Countries Annual Hours Worked per Employee, 2003
2,400
2,200
2,000
Lithuania Latvia Estonia
Poland Slovak Republic Slovenia US Spain Hungary Japan Canada Portugal UK Ireland Finland
Czech Republic 1,800
1,600
Sweden France
1,400
Denmark Germany
Austria
Norway
1,200
1,000 -2.0%
-1.5%
-1.0%
-0.5%
0.0%
0.5%
Growth of Annual Hours Worked per Employee, CAGR, 2000-2003 Source: Groningen Growth and Development Centre and The Conference Board (2004), authors’ calculations GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Domestic Purchasing Power of Income Selected European Countries Purchasing Power Parity Factor, 2003 3.5
3.0
Higher local prices relative to the United States
Lower local prices relative to the United States
2.5
2.0
1.5
1.0
0.5
St at es Au st ria Fi nl an d G er m an y N or wa y D en m ar k Sw ed en
K U
ni te d U
Li Sl th ua ov ak ni a R ep C ze ub ch lic R ep ub li c La tv ia H un ga ry Es to ni a R us si a Po la nd Sl ov en ia Sp ai n
0.0
Source: Groningen Growth and Development Centre and The Conference Board (2004), authors’ calculations GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Innovation Annual U.S. patents per 1 million population, 2003
400 350
United States
300 Japan
250
Taiwan (11.3%, 234)
200 Sweden
Switzerland
150 100
Finland
Germany Canada
Netherlands UK
50
South Korea
France New Zealand
0 0%
Norway
Australia
Italy
2%
Singapore (28.9%, 102)
Denmark Austria Ireland (17.5%, 42)
Hungary
Spain
4%
6%
8%
Compound annual growth rate of US-registered patents, 1998 - 2003
10%
= 10,000 patents granted in 2003
Source: US Patent and Trademark Office (www.uspto.gov). Author’s analysis. GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
R&D Spending Effectiveness US Patents in 2003 per 1 Mio. R&D Spending in 2001 (or latest available)
0.40 0.35 0.30 0.25 0.20 0.15 0.10 0.05
Ja
pa
n Sw itz US er G l an er d m C a ny an a F i da nl an S N d K ew o Ze rea a D lan N enm d et he ark rla S w n ds ed A u en st ria Be UK lg iu Ire m la nd It Fr aly a A u nc st e ra N lia or w H ay un g Ic ary el an d S C ze p a i S l ch n R ov a k e p. R P o ep rtu . g P o al la nd
0.00
Source: OECD, USPTO, author’s calculation GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Comparative Inward Foreign Investment OECD Countries FDI Stocks as % of GDP, Average 2000-2002 80%
Ireland (84%, 130%) Netherlands
70% 60%
Czech Republic
50%
New Zealand 40%
Switzerland UK Portugal Australia Canada Spain France Poland Finland Mexico Germany Norway
30% 20% 10%
Greece
Sweden Denmark Slovakia
United States Italy
0% 0%
10%
20%
30%
40%
50%
60%
FDI Inflows as % of Gross Fixed Capital Formation, Average 2000-2002
Source: UNCTAD (2004) GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Comparative Inward Foreign Investment Inward FDI Performance versus Potential Rank Difference: FDI Performance – FDI Potential, 2001
40
20
0
-20
-40
-60
Sp ai n D en m ar k La tv Sw ia ed en Li th ua ni a Po la nd H un ga ry G er m an Fi y nl an d Au st ria N or wa y R us si a
K U
C
ze ch
R
ep u
bl Sl i c ov ak i Es a to ni a
-80
Source: UNCTAD (2004), author’s analysis. GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Sweden’s Export Performance World Export Market Shares World export share in %
1.8% 1.6% 1.4% 1.2% Goods Services Total
1.0% 0.8% 0.6% 0.4% 0.2% 0.0% 1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
Source: WTO (2004), Institute for Strategy and Competitiveness (2004) GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Swedish Cluster Portfolio Goods Exports, 1992-2002 Change in Swedish World Export Market Share, 1992 - 2002: -0.2%
9% 8% Forest Products
7% 6% 5%
Metal Manufacturing
3% 2% 1%
Production Technology
Furniture
4%
Communications Equipment Prefabricated Enclosures
Pharmaceuticals
Aerospace Engines
Swedish World Export Market Share, 2002: 1.46%
0% -2.5%
Fish & Fishing Products Entertainment Products
Automotive
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
Compound annual growth rate of Swedish world export market share, 1992 – 2002 Source: UNCTAD Trade Data. Author’s analysis. GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
Multinational Companies’ Home Base Business Week 1000 •• •• •• •• •• •• •• •• •• •• •• •• •• ••
United United States States United United Kingdom Kingdom Canada Canada Germany Germany Sweden Sweden Spain Spain Finland Finland Norway Norway Denmark Denmark Ireland Ireland Austria Austria Portugal Portugal Poland Poland Hungary Hungary
423 423 73 73 37 37 35 35 15 15 10 10 55 55 44 44 33 33 22 11
Note: Business Week ranks by Market Value Source: Business Week (2004), author’s analysis. GCR Press Conference 2004 10-13-03.ppt
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Copyright 2004 © Professor Michael E. Porter
