Learning objectives
By the end of this course students will be expected to have a deep understanding of the microeconomic factors, processes and mechanisms which can foster economic development and prosperity. They will through the cases they have studied have an awareness of the role microeconomic forces and of business clusters in the economic development of cities, regions, nations and even regional trading blocs under various stages of economic development. They should be in a position to give informed policy advice to governments or to local or regional authorities as also to business groups regarding the promotion of economic development through suitable attention to the microeconomic underpinnings of competiveness. Furthermore students will have developed an awareness of the interests of wide ranges of stakeholder groups in the economic process and of how these may be incorporated into the strategic decision-making of a business. They will also thereby have a richer understanding of the meaning of social progress and will have grasped the significance of alterative macro level indices of social progress, in particular the Social progress Index.
Prerequisites
None
Course unit content
This course in the first place explores the determinants of national and regional competitiveness from a bottom-up, microeconomic perspective. The course probes the ultimate determinants of a nation’s or region’s productivity, rooted in the strategies and operating practices of locally-based firms, the vitality of clusters, and the quality of the business environment in which competition takes place.
Both advanced and developing economies will be considered and the competitiveness of nations, subnational units such as states or provinces, and particular clusters will be addressed. The course also examines the role that economic coordination among neighbouring countries or regions can play in competitiveness.
The course is concerned not only with government policy but also with the roles that firms, industry associations, universities, and other institutions play in competitiveness. The process of creating and sustaining an economic strategy for a nation or region being a daunting challenge the course explores not only theory and policy, but also the organizational structures, institutional structures, and change processes required for sustained improvements in competitiveness.
Having understood the multidimensional character of the microeconomics of building competitiveness the course will proceed to take a critical look at strategic decision-making in business challenging in particular some of the narrower models of strategy based exclusively on shareholder wealth maximisation; instead a broader approach to firm strategy based on considerations of sustainability and ethical business and respecting the interests of all stakeholders will be introduced.
From there the discussion will widen out to the macro level to encompass the meaning of social progress and its measurement through such indices as the Social Progress Index.
The main topics covered will therefore be as follows:
Theoretical foundations of economic growth theory
Microeconomics of development; the value chain; the power of clusters
Harvard cases on Competitiveness and Clusters: Dutch flower case; Indonesia case; Ireland case; European Union case and others as relevant
Creating Shared Value and its implications for business strategy; Corporate Citizenship
Macro indices to measure creation of shared value: the Social Progress Index
Full programme
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Bibliography
The materials for Microeconomics of Competitiveness will be a series of Harvard Business School cases on competitiveness. Students will be expected to buy their own copies of the cases as indicated in class from Harvard Business School Store: https://store.hbr.org/?source=google&medium=paidsearch&campaign=intl_br&gclid=EAIaIQobChMIhfX1rYLu9QIVro1oCR2K9wl1EAAYASAAEgLgofD_BwE
Specific readings will also be distributed by the professor in class or through Elly
For the part of the course dealing with wider approaches to business strategy:
CRANE A and MATTEN D (2010) “Business Ethics”, 3rd edition Oxford University Press. [Chapter 1 is available free online as a pdf at https://oxforduniversitypress.app.box.com/v/he-9780198810070
PORTER M & KRAMER M (2011) “Creating Shared Value: how to reinvent capitalism” in Harvard Business Review January-February 2011; pgs 62-78
O’SULLVAN P (2014) Conceptual Foundations of the Social Progress Index in Social Progress Index 2014 Methodological Report, ch 2, Social Progress Imperative, Washington DC. Also available online at http://www.socialprogressimperative.org/system/resources/W1siZiIsIjIwMTQvMDQvMDIvMjAvMTkvNDQvMjcyL1NvY2lhbF9Qcm9ncmVzc19JbmRleF8yMDE0X01ldGhvZG9sb2dpY2FsX1JlcG9ydC5wZGYiXV0/Social+Progress+Index+2014+Methodological+Report.pdf
Teaching methods
The Microeconomics of Competitiveness part of the course ismodelled on the teaching methods and content of the similar course at Harvard Business School. While some training in economics or management is helpful there are no prerequisites for following the course.
The course is taught largely using the case method, but there will also be some lectures, round tables, student group presentations . The case method requires extensive advance preparation by students for each class, and a significant part of the course evaluation may be based on the group presentations.
The more theoretical parts of the course on theoretical questions and indices will be taught in a classic lecturing style with some quizzes and open class discussion on more controversial topics. Students will be encouraged to form their own critical opinions and to speak freely.
Assessment methods and criteria
A group project involving the competitive assessment of a particular country and cluster (20%).
A final examination (80%)
Other information
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