This Investment Shift Also Contains A Second

By Maria Reyes

Technology is a way to do things. It is often thought of as being embodied in a piece of machinery, but can also be more subtle - such as "just in time" inventory, or better ways to organize agriculture. Machinery-based technology is often called "hard", while technology based on better management or systems is called "soft." Quite a lot of grow

• Language: English
• Publisher: Maria Reyes
• Release date: Feb 1, 2024
• ISBN: 9798869209238

Book preview

This Investment Shift Also Contains A Second

This Investment Shift Also Contains A Second

COPYRIGHT © 2023 BY MARIA REYES

ALL RIGHTS RESERVED

TABLE OF CONTENTS

CHAPTER 1 : BASED INDUSTRIALIZATION

CHAPTER 2 : EXPAND UNIQUE ITEMS.

CHAPTER 3 : ON THE ELECTRIC SEWERS

CHAPTER 4 : THAT THE COMPANY IS GROWING

CHAPTER 5 : ORGANIZATION OF WORK

CHAPTER 1 : BASED INDUSTRIALIZATION

Industrialization in high-cost industries often leads to stagnation, so what is the alternative? Many countries have succeeded with export-oriented industrialization. In this strategy, both foreign and domestic businesses search the world market for specific areas where they can compete and develop. Through exporting they learned how to respond to changes in demand, technology and quality. There is constant pressure to improve and innovate. Because the global market is so large, exporting businesses can gain economies of scale, even if they are only in a small domestic market. Consider Vietnam, with a current GDP one-third that of Singapore, with only a small domestic market for many industrial products. For example, the auto industry only sells 25,000 units per year, while to achieve profitable scale this number must be hundreds of thousands.

Exporters want domestic supplies, so clusters of small businesses often spring up to provide inputs. Marketing, repair and design services also developed. The result is a dynamic industrial sector that is both deep and broad, able to respond well to unexpected changes. This is what has helped South Korea and Taiwan respond to world oil shocks or recent financial crises better than inward-looking countries in Asia or Latin America. Hong Kong and Singapore also followed this direction and were very successful.

It is important to note that export-oriented industrialization also includes many industries producing for the domestic market. But it is import-competitive production without much protection. This requirement is of both AFTA, BTA and WTO. If Vietnam implements its commitments in the treaties, it must find ways to lower the costs of many existing products, while avoiding overinvestment in industries that require high protection.

(Saigon Times Daily March 24, 2003)

50. Technology Policy for Growth

Technology is a way to do things. It is often thought of as being embodied in a piece of machinery, but can also be more subtle - such as just in time inventory, or better ways to organize agriculture. Machinery-based technology is often called hard, while technology based on better management or systems is called soft. Quite a lot of growth can come from technology, as it allows each unit of capital and labor to be more productive. Constant upgrading of technology is increasingly necessary for industrial competitiveness and export growth.

Technology is usually not free. It is expensive to acquire, even if it is just a matter of selecting the best type. How does a nation of government create conditions so that firms want to and are able to select, adapt or even create productive technology? There are a few things one can do. First, develop a high quality educational system that provides large numbers of educated workers. Second, allow firms to compete using technology. Third, improve law and enforcement so that intellectual property is safe. (This helps to attract hi-tech foreign direct investment and also encourages local R&D.) Fourth, improve Internet speed and cost so that Vietnamese firms can easily find out about foreign technology. Fifth, help local business associations act on behalf of their members and conduct surveys of best-practice technology. In the future, further steps such as joint government-private funding of crucial R&D projects or specialized financing for hi-tech firms will also become important.

Note that only competitive firms tend to upgrade their technology. Monopolies might buy the best equipment, but then have little incentive to keep abreast of improvements. The key to the global economy is to tie in Vietnamese firms to others around the world, and this requires having knowledge of new technology and being able to apply it to particular products, quickly, and at a profit. While some state firms may learn to compete in such an environment, the experience of other nations is that private firms tend to lead as they face fewer constraints.

50. TECHNOLOGY POLICY FOR GROWTH

Technology is the way work is done. Technology is often thought of as a built-in part of every machine, but it can also be more subtle – like just-in-time inventory management or better organization in agriculture. Technology based on machines is called hard, while technology based on management or better systems is called soft. Technology contributes a lot to growth because it increases the productivity of each unit of capital and labor. Continuous technological improvement is increasingly necessary for export growth and the competitiveness of economic sectors.

Technology is often not free. It costs money, even if it's just the cost of choosing the best technology. How can countries and governments create the conditions so that businesses need and can choose, adopt or even create effective technology? There are several ways. First, develop a high-quality education system to provide more qualified workers. Second, allowing businesses to compete with technology. Third, improve laws and law enforcement mechanisms to ensure intellectual property rights (thereby helping to attract foreign direct investment with high technology content, while encouraging research and development activities). domestic). Fourth, improve the speed and price of Internet access so that Vietnamese businesses can easily learn about foreign technology. Fifth, help local business associations act on behalf of their members and survey the most effective technology. In the future, there will need to be important steps such as public and private funding of essential research and development projects, or special funding for high-tech companies.

Note that only every competing business tends to improve technology. Monopolists can buy the best equipment, but then have little incentive to keep up with advances. The key to the global economy is linking Vietnamese businesses with businesses around the world. This requires knowledge of new technologies, the ability to quickly and profitably apply them to specific products. Although some state-owned enterprises can learn to compete in such an environment, Experience from other countries shows that private enterprises often take the lead in this field because they face fewer bureaucratic obstacles.

(Saigon Times Daily April 7, 2003)

51. Soft Infrastructure

Everybody knows what hard infrastructure is - the roads, ports, water, telecom and electricity systems that allow other production to take place more easily and efficiently. While such investment is essential, it should be matched by soft infrastructure to achieve its full potential. For example, consider a new port that is built with a deep channel, good piers and cranes for loading containers. Such a port can cut the costs of trading. But if the loading and unloading charges are too high, or if the clearance procedures are very slow, this will add to costs. A big ship tens of thousands of dollars a day to rent, so one extra day costs spent waiting will add considerably to the costs of shipping containers. Bad soft infrastructure can destroy the potential of good hard infrastructure!

Another example comes from electricity systems. If a lot of electricity is stolen or not paid for, the ability of the company to expand or even to maintain its lines is reduced. Over time, there is an inadequate system - even if initial investment is adequate. Here again, poor management or policy can result in wasted investments. With water systems, this often shows up in large amounts of leakage of clean water from broken pipes, infiltration of dirty water, and a public health problem.

A third example comes from simply charging too much for some service. This is a problem when there is a monopoly provider. Although the situation is rapidly improving, for many years the international telephone charges in Vietnam were among the highest in the world. It was not that actual costs were so high, but that the telephone company chose to use international calls as a cash source for other purposes.

If good soft and hard infrastructure are combined, the result will be faster growth and a more effective use of investment.

51. SOFT INFRASTRUCTURE

Everyone knows what hard infrastructure is. Roads, ports, water supply, telecommunications and electricity systems help other manufacturing industries operate easily and efficiently. Those investments are necessary, often to fully develop potential, it is necessary to have adequate soft infrastructure. For example, a new port with deep channels, wharves and good cranes for loading and unloading containers can reduces trade costs. But if loading and unloading fees are too high or import-export procedures are too slow, costs will increase. Hiring a large ship costs tens of thousands of dollars per day, plus another day of waiting. The cost of shipping containers has increased significantly. Weak soft infrastructure can damage the potential of hard infrastructure.

Another example is the electrical system. If a lot of electricity is lost or money is not collected, it will be difficult for the electric company to expand or even maintain the power grid. Gradually, the electricity system will have a shortage even though the initial investment is adequate. Here it is also shown that poor policies or management can waste investments. For water systems, common weaknesses include large losses of clean water due to broken pipes, dirty water entering the system and public health problems.

The third example is simply that the service price is too high. This is when the supplier has a monopoly. Although the situation is improving rapidly, for many years Vietnam's international phone rates were among the highest in the world. It's not that the actual cost is that high, it's just that the phone company has chosen international phones as a source of money to use for other purposes.

If hard and soft infrastructure are both good, the result will be more efficient use of investment and faster growth.

(Saigon Times Daily March 15, 2004)

52. Competitiveness

A debate has arisen around the question of whether and how the competitiveness of a nation is different from that of a firm. According to the conventional concept of competitiveness, a firm is considered competitive when it can produce products similar to those produced by other firms but at lower prices or with higher quality and superior services associated with them, thus keeping its foothold in the market. Firms that cannot compete will be driven out of the market. Competition among firms within an industry is intense because competition will inevitably result in the demise of those firms which are unable to compete successfully; this kind of competition can be described as a zero-sum game.

Recently, this concept has been applied to national competition. However, there is hardly any consensus on the definition; the competitiveness of nation cannot be defined in the same way that of a firm. Obviously, international competition cannot drive one country out of business just like a firm if it fails in the marketplace. For that reason, some economists, including Paul Krugman, argue that there can be no concept of national competitiveness. Others like Michael Porter argue that a nation is competitive when it has institutions and policies in place that are supportive of high economic growth in the long-term. This requires continuous improvements in the economy's business climate, allowing and forcing firms operating in this environment to incessantly innovate and upgrade their technologies.

In reality, more organizations are working on rankings of economies and large firms are depending more on these rankings to make their investment decisions. This proves that national policy-makers, especially those in developing and emerging economies, must take into account the concept and measurements of national competitiveness.

52. COMPETITIVENESS

A current debate is whether there is any difference between corporate and national competitiveness. According to the traditional concept of competitiveness, a business is considered competitive when it can stand firm in the market by producing similar products at lower prices, or by providing Similar products with higher quality or service characteristics. A business that competes unsuccessfully will be pushed out of the market. Business competition in an industry is vital because it inevitably causes losses to unsuccessful competitors, and is called a zero-sum game.

Recently, people have expanded the concept of competitiveness to a country. The most difficult thing is that there is no consensus on this definition. The competitiveness of a country cannot be defined as the competitiveness of a business.

It is clear that international competition cannot put a country out of business if it is not as successful as the business in the market. It is for this reason that some economists, represented by Paul Krugman, believe that the concept of national competitiveness does not exist. Other economists, represented by Michael Porter, believe that a country is competitive when it has institutions and policies that support high long-term economic growth. This requires that the economy's business environment must be continuously improved to allow and force businesses operating in that environment to constantly improve their competitiveness.

In fact, more and more different organizations are building rankings of competitiveness between economies, and large companies also rely more on these rankings to make their investment decisions. This proves that national policymakers, especially in developing and emerging economies, cannot ignore the concept and measures of national competitiveness.

(Saigon Times Daily March 1,