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Wealth of the Nation: The Missing Links Suvit Maesincee The Rich Nations No Longer Dominate Global Production Share of Global GDP* % The US and Britain took 50 years to double their real incomes per head 75 Developed Economies 50 Today China is achieving that in a single decade Emerging Economies 25 1820 70 1913 50 73 2005 * At purchasing power parity Source: The Economist Jan 21st-27th 2006 The Geopolitics of 2026 • By 2026 , China’s economy will be bigger than the US • India’s will be much larger than that of any individual European country •The press will be full of articles about “Asian Value’ and the “Beijing Consensus” •There will be a fierce global scramble for oil, water and skilled labor •As economic might shifts from the north and west to the south and east, so will the cultural power •Ancient civilizations like China and India will become more self-confident and will project their own ideas on to concept such as democracy, freedom and the rule of law Source: The Geopolitics of 2026, The Economist 2006 Asia Expected to Be a Bigger Part of World By 2015 Forecasted Share of World GDP 2015 100 80 Asia 60 40 Non-Asia 20 0 China India Other Asia Source: The Economist December 2th, 2005, investaustralia.com USA Japan Rest of the world Western Total EU Three Clusters of Nations Mature/Stable Market Economy Sustained Economy Survived Economy Stagnant/Chaotic Economy Suffered Economy Political Disorder Source: Modified from Tanaka Akihiko Mature/Stable Liberal Democracy Globalization like a force of gravity • It is unavoidable • It is better to think how to make use of it • View it as an opportunity to speed-up the nation wealth building process Managing Flow In an Era of Globalization, a Healthy Economy Relies on Ability to Build Stock and Managing the Flow Well Poor Low High Building Stock Current Level of Stock New Level of Stock Wealth of The Nation Redefined Wealth of the Nation = Opportunities Parameter Openness X Strategy Attractiveness X Capability Competitiveness Wealth of The Nation Redefined Assumption About Environment Assumption About Scope of Business Assumption About Competencies Global Forces & Trends Openness • • Opportunities Threats Nation’s Competitive Position Attractiveness Nation’s Competitive Advantage Competitiveness • • • • Value Creation Differentiation Strengths Weaknesses Wealth of The Nation Redefined Parameter Openness Attractiveness Competitiveness Scorecard US Japan India Thailand X X X X X X X X X X X X • Business Attractiveness • Geographical Attractiveness • Cultural Attractiveness • People Attractiveness X X X X X X X X X X X X X X X X •Comparative Advantage •Competitive Advantage •Competencies X X X X X X X X X X X X • Free Flow of Goods & Services • Free Flow of Capital • Free Flow of Talents Wealth of The Nation Redefined Openness Openness US India Attractiveness Competitiveness Attractiveness Openness Openness Japan Attractiveness Competitiveness Thailand Competitiveness Attractiveness Competitiveness Wealth of the Nation--The Missing Links Sufficiency Economy Globalization People Centricity Sustainable Development Wealth of the Nation Desired Wealth of the Nation Nation-State Company People Nation’s Competitiveness Competitive Advantage Competencies In the Past Nation 1 Nation 2 Nation 3 Nation-State Vertical Tie-Up Company People Horizontal Free-Up From Now On Globalization Nation 1 Nation 2 Nation 3 Nation 1 Nation 2 Nation 3 Nation-State Company People • Vertical Tie-Up • Horizontal Free-Up • Vertical Free-Up • Horizontal Tie-Up From Now On Nation 1 Nation 2 Nation 3 Nation-State e.g. OLPC Company e.g. iPod People e.g. Korean Wave From Now On Nation 1 Nation 2 Nation 3 Issues Nation-State • Unilateral • Bilateral • Multilateral Company • Local • Regional • Global People • Privatize • Commonize • Socialize People is the Key Development Energy for the Nation’s Wealth Building in the 21th Century Empower People People-Centric Development Strategy Liberalize Potentials Pursuit to Prosperity • Invest in People • Equal Opportunities • Entrepreneurial Culture • Distributed Creativity • Peer Production • Democratization of Information People is the Key Development Energy for the Nation’s Wealth Building in the 21th Century Empower People Competitive Landscape Liberalize Potentials • Optimal Openness • Attractive Sector • Dynamic Enterprise Pursuit to Prosperity Enabling Environment • Predictable Environment • Macro-Stability • Infrastructure • Institutional Framework • Intelligence People Centric Drivers • Citizen Centric Government • Open Innovation Economy • Knowledge Based Enterprise • Smart People Citizen Centric Government Authority Regulation Facilitation Empowerment Open Innovation Economy Proprietary Closed Open Public Domain Knowledge Based Enterprise Scale/Scope Hierarchy Network Skill/Speed Smart People Blindly Repetitive Task NonInterchangeable Skill Interchangeable Skill Innovational Task People Centric Wealth System Nation’s Competitiveness Competitive Advantage Social Capital • Cohesion • Co-Creation • Co-Prosperity Human Capital • Capability • Integrity • Energy Competencies Nation Company People Sufficiency Economy is the Foundation for Sustainable Development Sustainable Development Cluster/ Institution Formation IntraCommunity Collaboration Individual Sufficiency • Cooperatives • Community-based Enterprises • Community Business Social Capital • Cohesion • Co-Creation • Co-Prosperity Human Capital • Capability • Integrity • Energy • Extended Collaboration • Community-based Intelligence • Community Development Plan • Emerging of Basic Communitybased Enterprises • Increased Income • Reduced Expenditure • Savings • Decreased Unproductive Habit • Initial Collaboration Sufficiency Economy is the Foundation for Sustainable Development Sustainable Development Cluster/ Institution Formation IntraIndustry Collaboration Corporate Sufficiency • Global Collaborative Network • Regional/Global Enterprises • Competitive Cluster Social Capital • Cohesion • Co-Creation • Co-Prosperity Human Capital • Capability • Integrity • Energy • Local Collaborative Network • Industry-based Intelligence • Industry Development Plan • Emerging of Industry Norms and Practices • Increased Income • Reduced Expenditure • Savings • Decreased Unproductive Investment • Good Governance People Centric Wealth System Competitiveness Nation Transparency Dynamic Competitive Advantage Company Good Governance Competencies People Integrity Energy Strategic Intent Wealth of the Nation Redefined Human Capital Return on Intellectuals Capability + People Centric ROI = Return on Integrity Integrity + Return on Intention Energy The Links to Nation’s Wealth Building Globalization Conflict VS. Complement Sufficiency Economy Promote VS. Block Sustainable Development Cause-Effect VS. Coincident Sufficiency Economy as a Root of Nation’s Wealth Building People Empowerment Globalization Sufficiency Economy Sustainable Development Wealth of the Nation
