Transcript THE MIDDLE EAST ECONOMY - Bar
COMPETITIVE ADVANTAGE IN ISRAEL
Factor Conditions & Government
• High Education Level • Motivated Labor Force • Well Developed Infrastructure • Knowledge • Capital Resources • Lack of Transparency • Incentives for Investment
Strategy, Structure & Rivalry
• High Exposure to Competition • Targeting Export markets • Good Work Relations • Planning Short Term
Demand Conditions
• Public Sector Dominance • Concentration in Private Sector • Decreasing Role of Government
Related & Supporting Industries
• Micro Electronics • Industries Related & Supporting Agriculture • Defense
Factors driven Investment Driven Innovation Driven
COMPETITIVE ADVANTAGE IN EGYPT
Factor Conditions & Government
• Physical Resources • Strategic Location • Moderate Climate • Low Cost labor Force • Shortage of Skilled Labor • Weak Infrastructure Services • Bureaucracy • Weak Financial Sector
Demand Conditions
• Lack of Sufficient Market Information • Weak Marketing & Distribution
Strategy, Structure & Rivalry
• Vertical Integration • State Owned Enterprises • Increasing Private Sector Participation
Related & Supporting Industries
• Textiles • Household Equipment • Food Processing • Tourism • Engineering Construction
COMPETITIVE ADVANTAGE IN JORDAN
Factor Conditions & Government
• Few Natural Resources • Shortage in Skilled Labor • Young Population • Well Developed Transportation • Good Banking System • Stabilization Policy
Demand Conditions
• Lack of Sophistication • Concentration, 80% Amman/Jordan Valley
Strategy, Structure & Rivalry
• Monopolization in Key Sectors • State Owned Companies • Gradual Privatization • Support to Export/Investment
Related & Supporting Industries
• Potential Cluster in Phosphates • Limited Specialized Manufacturing
BASIC MODELS OF DEVELOPMENT The Free Economic Zone (FEZ)
is “a geographic economic area in which goods enter duty free for processing and export, and in which investors are offered a variety of incentives (WEPZA)”.
Industrial District:
Firms consciously network with each other and active trade associations provide shared infrastructure.
Firms merge with Community
Porter’s cluster
is a “geographic concentration of an array of linked, competitive firms that either have close buy-sell relationships,
QUALIFIED INDUSTRIAL ZONE (QIZ)
Emilia-Romagna at a glance
• Area: 22,120 km
2
• Population: 4,000,000 • Per capita GP: 25,733 € • Municipalities: 341 • Enterprises: 415.000 2
•Cooperatives make up over 40% of the GDP of the ER region •In Bologna two out of three citizens are members of a cooperative •In Bologna over 85% of the city's social services are provided by social co-ops •Per capita income in ER has risen from 17th to second among Italy's 20 regions •Per capital income is 50% higher than the national average •Of the European regions, ER is number 11 of 122 regions in terms of GNP per inhabitant •Bologna has the highest disposable income of any of Italy's 103 provinces •Bologna has the highest per capita expenditure on the arts of any city in Italy •The unemployment rate of 4% is virtually full employment •70% of Bologna's households have home ownership
Models of Industrial Development
Strong
Industrial District
Hybrid Industrial District Cluster Community Industry Synergy Hybrid ID-FEZ
Free Economic Zone Porter’s Cluster
Hybrid FEZ-C
Weak
Clustering Specialization Process
Strong
COMPETITIVE ADVANTAGE IN THE MIDDLE EAST
Factor Conditions & Government
• • Egypt lowest labor cost PA highest labor cost • Jordanian universities not adapted to needs.
• Israeli high skilled labor, • Knowledge sharing (QIZ) • •
Strategy, Structure & Rivalry
Competition between Jordan, Egypt and PA on Israeli contracts Israeli new specializations, product differentiation
Demand Conditions
• Mutual impact of demand sophistication (irrigation) • Economies of scale for Israeli producers • Arab software
Related & Supporting Industries
• Textiles (Egyptian upper level) • Mining ,Chemicals(Phosphates) • Tourism
SOCIAL AND CULTURAL ENVIRONMENTS Culture = Way of Living
Culture universals
: George P. Murdock, common denominator of culture:
global not uniform
Athletic sports, body adornment, cooking, rituals, religion, family feasting, medicine, meal time. Edward T. Hall: Low context culture (paper work, US), High context culture (persons’ value, Japan Saudi Arabia)
CONTEXT ORIENTATION IN MAJOR CULTURES
High Context
Japan China United States Arab Germany Scandinavia
Low Context
THE CULTURE ENVIRONMENT
ESSENCE OF THE CULTURE Artifacts hearm smell, taste, touch Human Nature Values Rules Assumptions Roots Relationship Environment Lazy Value Activity Rights Obligations Dominate Submissive Create Plan React Truth Objective Social
IMPACTS OF CULTURE ON MANAGERIAL BEHAVIORS
Culture Context
Explicit Implicit
Negotiations Time, Location
Planning Short Formal
Participants Decision Making
Same Level Large Position Non Task Time Long Informal Relevant level Small Consensus
HOFSTEDE’S CULTURAL TYPOLOGY
Power Distance Individual Masculinity Uncertainty Equal Power Distance Unequal Collectivist Femininity Predictability
HOFSTEDE INDEX
Germany U.K.
France Japan USA Arab Countries Israel Power Distance Individualism
35 35 68 54 40 80 67 89 71 46 91 38 13 54
Masculinity
66 66 43 95
Uncertainty Avoidance
65 35 86 92 62 53 46 68 47 81
EMERGING CULTURAL PROFILES
Uncertainty Avoidance Low(Formalization)
Village Market
( Anglo-Nordic) Decentralized, Entrepreneurial, Flexibility, Delegation, Output Control
Family
(Asian) Centralized, Paternalistic, Loyalty, Personal relations
Well-oiled Machine
(German) Decentralized, Narrow Control, Compartmentalized, Routines & Rules
“Pyramid of People”
(Latin) Centralized, Elitist, Less Delegation, Input Control High Low `` Hierarchy High
HOFSTEDE’S MAPS
Uncertainty Avoidance Low DEN SEW IRE GBR NZL NOR USA CAN SIN HOK IND MAL PHI AUT SWI FIN GER, ISR High Small IRA THA PAK JAP SPA KOR TUR FRA MEX POR Power Distance Large
CULTURE & BUSINESS PROCESSES
Policy & Procedures
: US, low u.a., high formal reporting UK, low u.a., detailed jobs description Germany, high u.a., well internalized
Systems & Controls:
French = control(hierarchy), British=coordinate) US-UK reporting procedures French: hiring elites German operational planning Planning strategic(UK)
Information & Communication:
French: Compartmentalized Sweden: Communication open informal, transparency
Decision Making:
Participation in decision making (Sweden, Germany less hierarchy) PDG in France –Italy (Zanussi)
CUSTOMS IMPACTS TAX LOCAL CUSTOMER PURSHASING POWER LOCAL MANUFACTURER PROTECTION INCOME ALLOCATION CHANGE
Price
PARTIAL EQUILIBRIUM ANALYSIS OF A TARIFF
S D Pw1 Pw2 Sw1 Sw2 Q2 Q4 Q4 Q1 Quantity
IMPACT OF CUSTOMS UNION AGREEMENTS
Results Product A Cost Prior CU After CU B Cost Prior CU After CU Local Country
20 20 20 17 17 17
Foreign Partner Country
14 21 14 12 18 12
Foreign Third Country
12 18 18 14 21 21
Trade Flow
Import Source Change Import Trade Diversion Trade Creation
INTERNATIONAL ECONOMIC INTEGRATION
FREE TRADE AGREEMENT Abolition of Tariifs & Quota CUSTOM UNION Abolition of Tariffs & Quotas Common External Tariffs COMMON MARKET Removal of Restrictions on Factors Movements ECONOMIC UNION Harmonization of Economic Policy MONETARY UNION Common Monetary Policy
THE EUROPEAN UNION MILSTONES
• • • • • •
1945 Two Super Powers 1948-52 Marshall Plan 1951 Schuman Declaration 1951 Paris Agreement ECSC 1957 Roma Agreement EC 1968 Custom Union
• • • • • • • •
1985 Cockfield’s White Paper 1987 Single European Act 1991 Maastricht Treaty 1992 SEA Implementation 1997 Amsterdam Treaty 1999 Monetary Union 1999 Nice Treaty 2002 Euro
ENLARGEMENT OF THE EUROPEAN UNION
1956: Germany, France, Benelux, Italy 1971: UK, Ireland, Denmark 1981: Greece 1986: Spain, Portugal 1995: Sweden, Austria, Finland 2004: Poland, Hungary, Tchek Republic, Cyprus, Slovakia, Malta, Slovenia, Lithuania, Latvia
THE INSTITUTION OF THE EUROPEAN UNION THE COUNCIL
• Commission Proposals • Legislative Power • Co-decision with the Parliament • Foreign & Security • Ministers • The European Council • • • • •
THE COMMISSION
Executive Power Proposes Amendments Manages Policies Controls Policies Implementation President(Prodi) + 20 Ministers, 24 DG
From 1 November 2004, a qualified majority will be reached if the following two conditions are met: 1. if a majority of member states approve in some cases a two-thirds majority);a minimum of 232 votes is cast in favour of the proposal, i.e. 72.3 % of the total (roughly the same share as under the previous system).
2. In addition, a member state may ask for confirmation that the votes in favour represent at least 62% of the total population of the Union. If this is found not to be the case, the decision will not be adopted.
Distribution of votes for each member state (from 01/11/2004)
Germany, France, Italy, United Kingdom 29 Spain, Poland 27 Netherlands 13 Belgium, Czech Republic, Greece, Hungary, 12 Portugal Austria, Sweden 10 Denmark, Ireland, Lithuania, Slovakia, Finland 7 Cyprus, Estonia, Latvia, Luxembourg, Slovenia 4 Malta 3
TOTAL 321
POLICIES AND DGS
• Agriculture & Rural Development • Competition • Economic & Financial Affairs • Education & Culture • Employment, Social Affairs and Equal Opportunities • Enterprise and Industry • Environment • Fisheries and Maritime Affairs • Health & Consumer Protection • Information Society & Media • Internal Market & Services • Joint Research Centre • Justice Freedom & Security • Regional Policy • Research • Taxation & Custom Union •Transport & Energy
• External Relations Development, Enlargement, EuroAid, External Relations Humanitarian Aid ofice, Trade • General Services European anti fraud office, Eurostat, Press & Communication, Publication Office, Secretariat General • Internal Services Budget, Bureau of European Policy Advisers, Informatics, Infrastructure & Logistics,, Internal Audit service, Interpretation, Legal service, Personnel and Administration, Translation ,
Vice President Institutional Relations and Communication Strategy Vice President Administrative Affairs, Audit and Anti-Fraud Vice President Enterprise and Industry Vice President Justice, Freedom and Security Vice President Transport Information Society and Media
President
THE PARLIAMENT
• Legislative Power co decision with the Council • Assent Procedure(int.) • Adoption of the Budget • Approval of the Commission • Participation to the European Council
THE COURT OF JUSTICE
• 13 Judges for 6 years • Request from Private, Country, Firm • Unique Legal Power
POLITICAL GROUPS IN THE E.U. PARLIAMENT DEPPE PSE
Group of the European People's Party and European Democrats Group of the Party of European Socialists
ELDR
Group of the European Liberal, Democrat and Reform Party Group of the Greens/European Free Alliance
ALE NGL UEN
Confederal Green Left Group of the European United Left/Nordic Union for Europe of the Nations Group
EDD
Group for a Europe of Democracies and Diversities
NI
Non Attached
THE EUROPEAN UNION PARLIAMENT 2005-2009
THE ECONOMIC & SOCIAL COMMITTEE
• Representative of Economic Forces • 222 Representatives • Sectorial Commissions • Social & Economic Commissions
THE COMMITTEE OF REGIONS
• Consultative Power • 222 members • Trans European Network, public, Health, Education, Economic Cohesion
Court of Justice
President (6 chambers each comprising 3 or 5 juges ) •Action for failure Treaty obligations (Commission against a Member State or Member State against another Member State) •Actions for annulment (judicial review of the legality of Community acts) •Actions for failure to act (against the Parliament, Council or Commission •Actions for damages (against Community institutions or servants) •Preliminary rulings on the interpretation or validity of Communitylaw (references from national courts) •Appeals against judgments of the Court of First Instance