The Microeconomics of Competitiveness (MoC) Network
The MoC network is a Harvard Business School initiative to promote leading edge research and teaching in the area of ‘competitiveness’ of nations and regions. The MoC Network has been in operation since 2005, and is led by Professor Michael E Porter, whose initial work, ‘The Competitive Advantage of Nations’ (1990) established the concept of competitiveness to be not just applicable to individual firms, but equally to nations, and regions (within larger nations), and that a competitive nation (or region) would foster the development of competitive sectors and firms.
Most of the factors that determine competitiveness are more closely related to factors that affect the individual firms, hence the title ‘microeconomics of competitiveness’. The components of what we now consider ‘competitiveness’ are based on a nation’s ability to create a competitive environment where firms can prosper. These include countries’ ability to provide a strong institutional frame-work, a comprehensive provision of health services and primary, secondary and higher education systems that provide a workforce with the skills and abilities that are demanded, an efficient labour market and well developed financial markets able to provide the range of finance required for a diverse private sector, including start-ups, to foster a vibrant entrepreneurial community.
Above all, MoC provides a framework to assess a nation’s ability to innovate and lead with new technologies and services, which will make it truly competitive. As such, MoC covers a very broad range of subjects from economics, to finance and management, and forms the heart of modern business management thinking by establishing ‘competitiveness’ as the platform for productivity and growth, and incorporates a wide range of diverse components necessary for a nation to be considered ‘competitive’.
As a result of the MoC initiative, growth and prosperity is being assessed in a much broader and more eclectic way. Indices of ‘competitiveness’, ‘wellbeing’, ‘innovation’, and ‘entrepreneurship’, are becoming mainstream in economic and managerial dialogue, and are now rapidly replacing ‘traditional’ unitary measures such as GDP, GNP and income per capita as primary measures of a nation’s growth and development. The MoC Network, actively led by Professor Michael Porter, is playing a lead role in developing research into, and teaching of, competitiveness-related subjects at business schools and for executive programmes. The core of the national competitiveness framework has been cluster mapping, namely the assessment of the competitive strengths of clusters, groups of associated firms, which would normally comprise a ‘sector’ (e.g. automotive, textiles, tourism, financial sector clusters). More recent work has focused on management in the disruptive environment created by new technological developments, and the concept of ‘shared values’, developing a more sustainable model of sustainable business development, to replace the largely out-dated corporate social responsibility models. Furthermore, the MoC Network is developing new indices to measure growth and development. Most recently this has included the ‘Social Progress Imperative’ (http://www.socialprogressimperative.org), which is rapidly becoming a mainstream indicator of social development in relation to a nation’s level of income, and a benchmark guide for social investment.
The MoC Network comprises around 100 universities, business schools and institutions from all over the world that are teaching the MoC programmes and who are contributing to the development of research into competitiveness in various nations, regions, sectors and aspects of management, regulation and policy making.