Using Knowledge to Boost Competitiveness: Comments on Three Presentations

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Using Knowledge to Boost Competitiveness
Comments on Three Presentations

• Kiyohiko G. Nishimura
• Professor of Economics, University of
  TokyoExecutive Research Fellow, ESRI, Cabinet
  Office
• Member, Statistical Council

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Burgi-Schmelzs Paper

• Identify Success Factors in competitiveness
• Impact of Science and Technology
• Measurement of patents and RD share in GDP
• Impact of Human Capital
• Measurement Rate of Return on education
  (private/social)
• Suggest positive correlation between success
  factors and competitiveness
• Emphasize importance of the above measured
  indicators and others (CO2, health care, higher
  education) in guiding policies in
  Knowledge-based economies

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Rosteds Presentation

• Identify Total Factor Productivity (TFP) or
  Multi-Factor P (MFP) as one of the most important
  determinants of competitiveness
• Identify factors influencing TFP/MFP and search
  indicators representing them
• Human resources
• Knowledge accumulation and networking
• ICT capital stocks
• Entrepreneurship
• Identify the most important policy areas based on
  the results

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Murrays Presentation

• Identify adult skills a major determinant of
  competitiveness.
• Propose indicators of these crucial adult
  skills based on educational assessment and
  household survey methods
• Show some success of these indicators in
  explaining employability and wage differences
• Discuss remaining data problems as well as
  policy-implementation ones based on these
  indicators

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Three presentations

• A wealth of information is found about aggregate
  indicators of probable determinants of
  competitiveness
• A focus on cross-country performance differences
  and their determinants
• Crucial role of indicators (statistics) to guide
  public policy

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What can be added to them?Disaggregated/Micro-mic
ro Analysis

• Complexity
• Results based on simple correlation on an
  aggregate of some indicators of competitiveness
  or achievement and that of indicators of
  determinants are suggestive but not entirely
  convincing
• To entangle complexity, disaggregated analysis
  are needed industry-level and period-wise
• Even further disaggregation may be helpful
  firm-level and consumer-level analyses

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Determinants of Competitiveness

• Supply-side Push factors
• Total Factor Productivity (TFP) (level/growth)
• Improved labor inputs
• Innovation
• Demand-side Pull factors
• Consumer attitude (adjustability)
• Changing needs (aging, etc.)

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Heterogeneity is a key factor

• Wide difference among industries and periods
• Nishimura and Shirai, Can Information and
  Communication Technology Solve Japans
  Productivity-Slowdown Problem? Asian Economic
  Papers 2 (1) (2003), 85-139. TFP Growth

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Firm-Level Competitiveness Research

• Nishimura and Kurokawa Total Factor Productivity
  in Japanese Information Service Industries
  Firm-Level Analysis 2004, available at ESRI
  website.
• Census-like Government Statistics (all firms
  engaging information services)
• Activity-level calculation of Total Factor
  Productivity of firms
• Heterogeneity is properly accounted for (Panel
  Analysis with Firm-Specific Effect)

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Organizational structure matters

• To achieve high productivity, firms
  organizational structure should be changed
• Seemingly productivity-enhancing outsourcing has
  in fact negative effects on productivity
• Clear indication of a pitfall in best practice
  methodology/policy
• Large adjustment costs
• Employment adjustment costs on productivity
• Organizational adjustment costs on productivity

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Consumer and Knowledge-Based Economy

• Nishimura and Morita Alienation in the Internet
  Society Changes in Car Buyer Attitudes in the
  Japanese Automobile Industry, International
  Journal of Automobile Management and Technology 2
  (2) (2002) 190-205
• Conduct Interview-based Sample Surveys about
  Automobile Drivers in 1999 and 2001
• Respondents roughly represent the whole Japanese
  automobile drivers.
• The ratio of Internet users to all car owners was
  doubled between 1999 and 2001, from 16 to 32
• Examine the magnitude of Internets influence on
  car purchasing behavior
• Examine changes between 1999 and 2001
• Investigate not only Internet users but also
  non-Internet users

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Ailenation in Internet Society

• Surprisingly, the major change has occurred among
  non-Internet users, not in Internet users
• New, Internet-driven strategies of manufacturers
  and dealers ignore non-Internet users
• non-Internet users were increasingly disappointed
  and alienated
• losing interests in cars in general and human
  relations with salespersons
• Internet society is likely to leave consumers
  segmented and diversified. Some are not so happy.

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Conclusions

• Three papers a good start in a right direction
• Must be cautious to derive policy conclusions
  from their results Competitiveness in a
  knowledge-based economy is a very complex animal
  to investigate.
• More emphasis on micro-level research to enrich
  our understanding of competitiveness in
  knowledge-based economies