Wochen 13

1945/47: Declare independence after 5 centuries of suppresssion with the help of the United Nations /first constitution - was never independent before (trough colonys: Portuguese/Dutch/British)

1949-1966: "Guided Democracy" but with an authoritarian regime

1967-1998: Authoritarian regime focuses on establising/stabilize the economc system

1997-1998: AFC 

1998-1999: New democratic regime

2004-2014: Economic liberalization reforms, intrnational trade, FDI, social welfare and cohesion

2014-2024: Corruprion erradication,  promoting FDI, public services reform, poverty reduction

Red Tape: Excessive bureaucracy and complicated, time-consuming administrative procedures that hinders progress or efficiency for foreing companys

Global ambitions:

• Become 5th largest economy by 2050 /
• Become oe of the regions top innovation hubs (Drehscheibe)
• Develop geo-political soft powers (FDI/Trade/diplomacy)

National development goals:

• Economic resilience (GDP growth by 5%)
• global, regional and market liberalization and fair competition (Erradicate corruption)
• Value add trough innovation and productivity
• Climate change and environment protection 
• poverty eradication, human rights and social integration, education and public welfar
• improve/build infeasrtucture (Fast trains, aiports subway) / improve private sector

Political/Legal: Liberalization, corruption, governance structures, relocation of the capital

Economic: Declining FDI, inflation, unemplyment

Social: Young work force, youth unemployment 16%, human rights (Chid marriage)

Technological; National innovation strategy

Ecological: Extreme weatner, waste-management, pollution

Demand conditions: Home-market relative size; domestic buyers needs - More demand of domestic consumers = higher pressure to firms to innovate

Examples of Industrys: German Cars, French Wine, Swiss Watches, British Whiskey

Factor conditions: Availability, quality, relative prices of inputs (labor, materials) -

Basic factors: Natural recources, geographic location, climate

Advanced factors: Communication, technology, education

Nations succeed in industries which they are good at creatinf and upgrading

Related/supporting industries: Proximity of suppliers, end users, complementary industries (Zulieferer)

Key concept = Clusters; when local industries are mor competitive, firms benefits (Exaples: Silicon Valley)

Firm Strategy, structure and rivalry: Different management styles and organizations, degree of local rivalry

Intense domestic rivalry improves the wordlwirde competitiveness of domestic firms (For example: Italian Shoe Industry)

Mediator of the Diamond Modell: Government (should act as catalyst, challenger)

direct support: through subsidies, temporary proteciotn

indirect support: Favourable economic conditions

Is the country a production market, a consumption market or both?

• The Home Country
  • Micro level: Important role in achieving competitive adv. of companies
  • Macro level: acts as catalyst (stimulates or accelerates change or development)
• Countries should exporting products where ALL 4 components of the modell are favorable, and importing the non favorable components
• Production activities disperesed to countries where they can performe efficiently
• Companies should invest financial resources in first mover adventages
• Free Trade: Best interest of the home country (maybe not for zhe firms)

F1 Factor Contitions: Natural Recources, young demographic, strategic location, welcoming culture, diplomatic wolrd stance

F2 Demand Conditions: Classified as newyl-industrielized (NIC), Middle-Income (MIC)

F3 Related and Supporting industries: Agricluture, Automotive, Mining, Telecom and Transportation in development

F4 Firm Strategy, Structure and Rivalry: Stable economy (5% growth since 2000) Issues with corruption, protectionism and governemt red tape hinder prgress towards open economy/fair competition,human rights issues

M1+2 Government and Chance: Basic regulatory structures, infrasturcture and service in place but sitll lacking in efficieny, global competitiveness

Global (Macro) Mega Trends: 

• Duration: Megatrends have a duration of at least several decades
• Omnipresence: Megatrends show effect in all areas of society (Economy, society politics etc)
• Globality: Globally spreaded sooner or later
• Complexity: Multi layered and multi dimensional

Top 5 global megatrends:

1. Rapid Urbanization
2. Climate change
3. Shift in global economy power
4. demographic/social change
5. Technoligical breacktroughs

How do they emerge?

• Long term development wih great relevance in all areas

Megatrends play a fundamental role in risk manag. and planing, they reshape entire societys

Local Trends in contrast, are specific to individual countrys (ex: protectioicm, red-tape,corruprion)

Trends: Predictable; They can be estimated and therefore included in strategies and development plans for the medium-term

Shocks: Unexpected; Risk of potential disruption or destruction, cant be planed but prevented trough recovery plans, rish sharing diversification startegies