Collaborating Small Business to Overcome Financial, Social and Political Constraints

Small businesses have a hard time competing due to financial, social, and political constraints on their resources. A paper by Evans (2013) explores the political dynamics and process of institutional change that underlines policy approaches that focus on modernizing small firms in Portugal. Their comparative-historical analysis helps show that successful industrial upgrading relies on intense and sustained political action led by leadership in an effort to develop benchmarks and proper implementation of financial strategy. 

Small businesses often lack resources to compete in a market dominated by better financed international companies. Payroll, financing, business, systems, etc… were not always updated appropriately. Small businesses also regularly failed to meet inappropriate legislation focused toward larger organizations leaving them unable to grow or develop.  

Other problems small business face is the legal and political structure of a country that focuses more heavily on larger industries. This structure can make it difficult for small businesses to meet regulations, export quantities, and other minimum standards. The lack of understanding of the needs of small business can have a long-term impact on the success of new entrepreneurial development. 

Small business can work in collaboration to build a stronger political voice that can impact the legal frameworks of a nation and encourage greater fairness in development. They may also work together to share resources such as payroll, financing, legal representation, etc… Sharing resources narrowed economies of scale advantages found in larger businesses. 

The study helps highlight how local and national governments must work together to ensure fresh development of industry innovation, new businesses, and stronger economic competitiveness. Small businesses will need to overcome their individualistic approaches and rivalry oriented strategies to create stronger collaboration that leads to social, economic and political transformation.  Leaders can encourage changes within the structure to ensure greater concern and competitiveness of small businesses development within their sectors that has an impact on economic development.  

Evans, A. (2013). Building institutional capacity: from pervasive individualism to sustained coordination in small firm sectors. Business & Politics, 15 (2).

How Highly Skilled Employees Draw Foreign Investment for Economic Growth

Economic development cannot happen without the proper skill levels available in the market to ensure that investment opportunities meet capabilities. A study by Osomu, et. al. (2010) delves into the overall concept of creating greater global competitiveness. They analyzed 84 different countries over 5 years to determine how skill development through formal education and corporate training raised economic viability and encourage foreign direct investment in high technology environments. 

Technological progress and globalization has created rapid changes in the environment putting pressure to create productive and innovative approaches that are supported through the comparative advantages of skills, industrial organization and management practices (Lall, 1999). The process of creating stronger businesses and management practices must meet available market skills to create competitive advantages for the region and the market. 

The types of skills vary based upon what industry labor is employed. However, there are some commonalities in the global market that appear to create competitive advantages. Skill development should include communication, team work, rotation, quality, problem-solving, health and safety, and performance-pay linkages (Low, 1998). Each industry will need to develop specific skill qualifications that enhance their positions. 

Prior success of the country is based on a number of factors. Through a previous analysis of market factors it was found that human capital investment in the early twentieth century helped the country gain competitive edges in technology, education, and human capital while lowering the damaging effects of inequality (Goldin and Katz, 2008). This period was marked by economic and social dominance in world markets that carried through to Baby Boomers. 

This development is based within the cognitive, analytical, and behavioral development that allows people to invent and adopt new technologies and ways of improving production (Lall, 2000). The overall process of learning, integrating best methods, and putting them to practical use fosters greater and faster growth. The management and labor population must be open to new ideas and developments to be effective.

Skill formation can be developed from a number of different sources. It is most often raised in vocational training, formal education, in-house training, outsourced training and on-the-job training (Lall, 2000). Organizations seeking to raise their market value and contribute to economic growth will need to support higher education as well as training & development within their organizations.

The model used by the researchers to analyze skill development within the country helps to understand how skill and economic development work together.  

The concepts included in the model are high technology exports, Harbison Myers Index based on education enrollment, science and engineering enrollment, gross domestic product per capital, and net foreign investment. The researchers used these concepts based upon previous research to create the mathematical model that helps to understand labor development and economic growth.

The researchers found through this model that the factors were statistically significant and accounted for 99% of variation in competitiveness.  Skills were important for global competitive position. Improvement in high technology exports requires the development of skill and investment in education. Low foreign investment was associated with low skill development while higher foreign investment was associated with high technology skill and product development.  High GDP per capita and purchasing parity was associated with the manufacturing and export of high technology products.  The authors recommend reforming education across all levels to encourage market relevance. 

Comment: The study is significant in that it highlights the need to develop local skills through varying methods such as on-the-job training, training & development, and higher education to provide the right human capital for further investment within the market. Those markets that focused on matching their skills to high technology exports also realized greater foreign investment that fostered future growth. New development into the post Baby Boomer generation is needed to further the American legacy.

Goldin, C., & Katz, L. F. (2008). The race between education and technology. Cambridge: Harvard University Press.

Lall, S. (1999). Competing with labour: Skills and competitiveness in developing countries. Geneva: International Labour Organization.

Lall, S. (2000, June). Skills, competitiveness and policy in developing countries. Queen Elizabeth House Working Paper Series 46. Oxford: Oxford University Department of International Development.

Low, L. (1998). Jobs, technology and skill requirements in a globalized economy: Country study on Singapore. Geneva: International Labour Organization.

Onsomu, et. al. (2010). The impact of skills development on competitiveness: empirical evidence from a cross-country analysis. Education and Policy Analysis, 18 (71).

International Macro-Marketing Encourages National Development

Ferry Landing Marketplace-Coronado

Marketing and economic development are two concepts that are intertwined. According to a paper by Low and Dang (2012), international marketing is a major factor in raising economic development in a country. The development of society through producing and selling relevant products worldwide is based deeply in prior literature dating back over a century. Without marketing it will be difficult to grow the wealth of a country.

The concept of international marketing can be seen as macro-marketing; or marketing on a large scale. Macro-marketing is related to marketing systems, marketing systems impact on society, and societies influence on marketing systems (Hunt, 1977).  As marketing is a national exchanged and international marketing is an international exchange, development of society is directly impacted by the quality and value of goods and services flowing through these exchanges.

The purpose of international marketing is to satisfy needs worldwide. When countries can align their economic systems to produce products and services that will lead to wealth growth and quality of life development they have effectively competed on the international market. If wealth is moving overseas and standards of living are lowering then they are not effectively competing. The individual arguments matter little in this debate if they produce the same results.

International marketing isn’t a standalone process and relies on the three subsystems of physical distribution systems, financial systems, and communicative systems (Drucker, 1958). Companies must have connections to distribution networks; they need a medium of exchange and financial transference, and the ability to manage their companies/distributors through communicative systems. Customers must be aware of products, have a mechanism to purchase the products and receive the products.

The products are not bought and distributed without first being developed. The concepts of entrepreneurship, standards, proper management and stimulating demand can increase the market size. As these elements come together higher levels of productivity and efficiency in product development rise thereby drawing in more wealth (Cundiff & Hilger, 1980).

Ricardo’s theory of comparative advantage indicates that companies that can produce products cheaper in one country can trade with other countries with different competencies (Ricardo, 1817).  Labor, capital, and land are used to develop competencies in market production. Today’s international marketplace requires highly competent labor as resource extraction is likely an advantage of emerging nations.   

The authors argue that economic development requires the right national environment. It is important for nations to cluster industries and create local spillover effects that improve upon skilled labor, capital investments, and infrastructure. International marketing links a country to the international market and helps to encourage adjustments within society to meet these challenges. There is a growing need among developed nations to adjust their governmental management to better reflect the needs of the global marketplace.

The report helps us understand that when products are designed and produced to a world market economic growth can occur. Firms must align their internal resources to the world environment in order to be successful. Competencies lay in using intellectual abilities and highly skilled labor to turn lower value commodities to higher value products that have wide appeal and generate significant wealth. Underdeveloped nations will have a hard time copying the products and services developed through higher level nations when the highest human capital is developed that matches available resources.

Cundiff, E. W. and Hilger, M. T. (1980). Marketing and the Production-Consumption  Thesis in Economic Development. InG Fisk, R. W. Nason & P. D. White (Eds.), Macromarketing: evolution of Thought (pp. 177-186). Boulder: University of Colorado, Business Research Division.

Hunt, S.D. (1977). The three dichotomies model of marketing: An elaboration of issues. In C. C. Slater (Ed.), Macromarketing: Distributive Processes from a Societal Perspective (pp. 52-56). Boulder,  CO:  Business  Research  Division,  University  of  Colorado.

Low, S. & Dang, T. (2013). Role of marketing and construction in economic development: lessons for emerging economies. IBA Business Review, 7 (1).

Ricardo, D. (1817). On theprinciples ofpolitical ecOIIOfl9\ and taxation. London: J. M'Creepy.

Economic, Social, and Environmental Resilience of Cities

Creating sustainability within cities can be difficult. A paper by Luigi Fusco discusses how cities can develop economy synergy by fostering creativity, resilience, and sustainability (2011). His work is more focused on port cities but does highlight the concept that human elements are important considerations in the development of cities that will survive change.  These factors may actually be measured to help ensure that cities are moving in the right direction. 

Creativity is a powerful energy source for redevelopment. With creativity people can solve problems, develop new products, and find new ways to doing things. This creativity helps develop an economic engine with new ideas and marketable solutions. 

Synergy can be seen as the relation principles that help discus the interconnected nature of business and people. As businesses and people connect together they develop interactions that can enhance the economic system. Synergy is based on these social and business networks that focus on a shared perspective of development. 

The author breaks down development into economic resilience, social resilience, and environmental resilience. The paper focuses primarily on creating sustainable eco-cities that are economically viable. The measurements are as follows: 

Economic Resilience:

Funding from local foundations and banks/year 

Innovative public procurement supporting local industries

Regeneration capacity of economic activities (variations overtime of innovative activities in the area/total number of activities)

Localization of new creative, flexible and adaptive activities

Density of networks among companies

Variation of informal sector economy

Industrial production activities integrated in spatial and social context/Total of industrial production activities

Innovative research activities/Total of research activities

Number of university spin-off/year

Incubators of activities

Number of design patents/year

Number of cooperatives enterprises/Total number of enterprises

Number of micro-businesses/Total number of enterprises

Density of networks among public authorities, enterprises and research center

Social Resilience:

Increase of social cohesion sense as reflection of circular economic-ecological processes

Percentage of reduction of unemployed people living in the area

Experiences of self-organization capacity in neighborhoods

Implementation and upgrading of existing “public spaces”(number of squares closed to traffic)

Conservation of elements expressing the area’s cultural identity and memory

Number of events, festivities, ceremonies, as expression of collective/social memory, in the year

Percentage of people involved in forums and participative processes/year

Involvement of the III sector in specific programs/projects/activities (housing cooperative networks, social housing associations, etc.)

Density of cooperative and partnership networks

Involvement of local people in urban planning

Capacity of learning from explorative experiences

Openness of people to differences and diversities

Level of interpersonal trust

Perception of belonging to a specific community

Number of donors/10.000 inhabitants

Environmental Resilience:

Reduction of vulnerability and risks levels

Conservation and increase of green areas (tree planting and maintenance, promotion of green roof and green façade)

Percentage of local materials used in productive processes

Conservation and improvement of landscape quality

Reduced car travel demand

Reduction of motor traffic

Air pollution reduction

Water pollution reduction

Recovery/recycling/regeneration of waste material (percentage of plastic, metals, tires, slag, cans, glass, paper reused, recycled and regenerated)

Water recycling (rain water percentage recovered)

Waste management (self-organized waste management)

Percentage of local renewable sources (new electric power plants localization, based on energy innovation) used in productive processes

Organic waste recycled percentage (local composting production/year)

Percentage of activities included in a smart energy grid (to use a variety of fluctuating energy sources)

Localization of new industries with a low environmental load (ISO and Emas certified)

Number of modern eco-compatible buildings/Total number of buildings

Luigi, F. (2011). Multidimensional evaluation processes to manage creative, resilient, and sustainable city. Aestimum, 59.