National Competitiveness Research

Our Approach

One of the most effective approaches toward understanding competitiveness is Porter’s (1990) Diamond Model (Moon, 2018). This was then extended by later scholars into two directions. One is the Double Diamond Model (Rugman and D'Cruz, 1993; Moon, Rugman, and Verbeke, 1995, 1998), which extends the scope of national competitiveness including both domestic and international dimensions. The other is the 9-Factor Model (Cho, 1994), which distinguishes the sources of national competitiveness to include both physical and human factors.

Based on these two extensions, a new comprehensive model was introduced by integrating them into one framework (Cho and Moon, 2013a, 2013b; Cho, Moon, and Kim, 2008, 2009; Cho, Moon, and Yin, 2016). The new model was named as the Double Diamond (DD)-Based 9-Factor Model, which is the underlying analytical framework of our National Competitiveness Research. For this survey, we measure the competitiveness of more than 60 countries and regions using the DD-Based 9-Factor Model. The scope of national competitiveness encompasses both domestic and international contexts, and the source of national competitiveness is composed of both physical and human factors. Physical factors include four elements, consisting of Factor Conditions, Demand Conditions, Related Industries, and Business Context, while human factors include four other elements – Workers, Politicians & Bureaucrats, Entrepreneurs, and Professionals (see figure 1). The eight factors of national competitiveness in the DD-Based 9-Factor Model are composed of 16 sub-factors, which are further made up of 104 criteria. About half (63) of the criteria are hard data, and the other half (41) are soft data conducted in this research.

Reference

  • Cho, D. S. 1994. A dynamic approach to international competitiveness: The case of Korea. Journal of Far Eastern Business, 1(1): 17-36.
  • Cho, D. S. and Moon, H.C. 2013a. From Adam Smith to Michael Porter: Evolution of Competitive Theory. Extended ed. Singapore: World Scientific Publishing.
  • Cho, D. S. and Moon, H.C. 2013b. International Review of National Competitiveness: A Detailed Analysis of Sources and Rankings. Cheltenham, UK: Edward Elgar.
  • Cho, D. S., Moon, H. C., and Kim, M. Y. 2008. Characterizing international competitiveness in international business research: A MASI approach to national competitiveness. Research in International Business and Finance, 22(2): 175-192.
  • Cho, D. S., Moon, H. C., and Kim, M. Y. 2009. Does one size fit all? A dual double diamond approach to country-specific advantages. Asian Business and Management, 8(1): 83-102.
  • Cho, D. S., Moon, H. C., and Yin, W. 2016. Enhancing national competitiveness through national cooperation: The case of South Korea and Dubai. Competitiveness Review, 26(5): 482-499.
  • Moon, H. C. 2018. The Art of Strategy: Sun Tzu, Michael Porter, and Beyond. New York: Cambridge University Press.
  • Moon, H. C., Rugman, A. M., and Verbeke, A. 1995. The generalized double diamond approach to international competitiveness. In A. Rugman, J. Van Den Broeck, and A. Verbeke (Eds.), Research in global strategic management: Volume 5: Beyond the diamond (pp. 97–114). Greenwich, CT: JAI Press.
  • Moon, H. C., Rugman, A. M., and Verbeke, A. 1998. A generalized double diamond approach to the global competitiveness of Korea and Singapore. International Business Review, 7(2): 135-150.
  • Porter, M. E. 1985. Competitive Advantage: Creating and Sustaining Superior Performance. New York: Free Press.
  • Porter, M. E. 1990. The Competitive Advantage of Nations. New York: Free Press.
  • Rugman, A. M. and D’Cruz, J. R. 1993. The “double diamond" model of international competitiveness: The Canadian experience. Management International Review, 33(2): 17-40.

MASI Application

This report consists of a series of tools for analyzing national competitiveness. The methodology collectively known as Measure-Analyze-Simulate-Implement (MASI) is foundationally applied in the NCR to address the policy implications for enhancing national competitiveness. The MASI approach includes the following four steps:

  • Measure: Double Diamond (DD)-Based 9-Factor Model for measuring national competitiveness.
    The National Competitiveness Research , the 3-Year Moving Average Methodology is applied to the sub-factor level. This approach is to reduce the abrupt variations, which might arise due to a possible external shock during a certain year.
  • Analyze: 3×3 framework for classifying country/region groups and comparing countries/regions with similar competitiveness structure.
    The research classifies more than 60 countries/regions based on their size and competitiveness in order to yield realistic analysis results. Countries/regions are first classified into large, medium, or small according to their size by combining the population and land size, and into strong, intermediary, or weak based on their competitiveness using the indicators calculated with the DD-Based 9-Factor model, and ultimately are classified into 9 segments (3X3). This classification enables the relative comparison of competitiveness of countries within the same group.
  • Simulate: Applying business strategy (e.g., Porter’s (1985) two generic strategies of cost or differentiation strategy) toward guiding an appropriate strategic choice for competitiveness enhancement.
    Different weights are applied to different variables in the DD-Based 9-Factor model. For instance, in Cost Strategy, competition is based on natural resources and low labor cost, therefore "factor conditions" and "workers" in the model are given more weight; whereas for Differentiation Strategy, where competition is based on high cost and high value added, "demand conditions" and "professionals" are given more weight. Countries/regions are able to identify their competitiveness structure and appropriate strategy  through this stimulation.
  • Implement: Practical strategies for enhancing national competitiveness, using Optimal Strategic Mix and Term-Priority Matrix at macro and micro level, respectively.
    Optimal Strategic Mix is used to show appropriate policies in accordance with the stage of economic development from the macro level. Once the strategic implications are clarified, a series of concrete strategies suitable for each country at different stages of economic development should be followed. Such an approach will enhance the level of national competitiveness. Term-Priority Matrix can be utilized to suggest strategy guidelines for different terms and priorities at the micro level. Once countries/regions identify both strong and weak criteria, they can formulate the strategy planning for further competitiveness enhancement by combining the Terms and Priorities of policies into a single matrix.

NCR Reports and Guide

research

We have been publishing the National Competitiveness Research annually since 2001. The research introduces a theoretical background on national competitiveness and provides the indexes for more than 60 countries and regions around the world. Alongside this, it provides policy recommendations for governments that can help enhance competitiveness at the national level as well as support companies to formulate their international strategies. Please explore our past competitive rankings and the User Guide below.


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Benefits for the respondents

This survey contains 41 questions which are divided into seven categories.
For those who complete the survey, the following benefits will be available.

  1. Immediate access to the recent rankings of national competitiveness (2014-2018), country profiles for 62 countries/regions in 2014-2015, and the NCR User Guide.
  2. A link to access the main results of the 2019 National Competitiveness Research specially prepared for the survey respondent after the Report is published.
  3. The extended 2019 competitiveness profile for selected countries/regions (as in the Survey).
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