How Countries Compete

Strategy, Structure, and Government in the Global Economy

by Richard H.K. Vietor

Number of pages: 305

Publisher: Harvard Business Press

BBB Library: Technology and Globalization

ISBN: 9781422110355

About the Author

Richard H.K. Vietor teaches courses on the regulation of business and international political economy at Harvard Business School.


Editorial Review

Business and political leaders often talk about what their respective countries must do to compete in the world economy. But what does it really mean for a country to compete, and how do they do this successfully? Countries develop strategies to compete for the markets, technologies, skills, and investment that will raise their standards of living. These government strategies can make—or break—a nation’s efforts to drive and sustain growth. Countries compete to develop. This is one result of globalization. They compete to grow and raise their standard of living. In this competitive environment, its government that provides distinctive advantages to firms: high savings and low interest rate for investment, sound property rights and good governance, a technological motivated and committed workforce, a low rate of inflation, and a rapidly expanding domestic market.    

Book Reviews

"Vietor argues that government can do this in a variety of ways in order to advance the performance of business, namely by inducing savings and offering low interest rates, guaranteeing property rights and other necessary institutions, providing an educated workforce, and maintaining low inflation. The main thrust of the book is to posit that institutions are the central building blocks of any economy, and that “good” institutions are vital for sustained economic development."Economic History

"How Countries Competeis essentially the course Vietor has been teaching over the past 25 years to senior management attending Harvard Business School’s Advanced Management Program. It is a multinational course and Vietor firmly believes that the vast majority of his students know little or nothing about the true dynamics of the world." Asia Sentinel

Books on Related Topics

Wisdom to Share

Countries that do manage their currencies generally employ a variety of controls on their capital accounts—the flows of capital into and out of the country.

Each country’s central bank allows the supply of money to grow at a certain rate.

Moreover, these balances can be achieved through expanding or reducing various spending policies that all have differing effects on output.

Fiscal policy is the government’s budgetary stance, either a surplus, balanced budget, or a deficit.

National goals may consist of loose generalities such as economic growth or political stability.

The country’s culture, level of corruption, natural resources, education, income distribution, and international security are keys among these contextual factors.

The strategy and structure must fit each country’s context; the national and international conditions in which the country operates.

The business executives dislike government and generally think it incompetent

They need economic policies that control inflation and maintain long-term growth. All of these conditions are delivered by effective government policies, in which executives indeed have interest.

Firms need competitive exchange rates, secure property rights, reasonable income distribution, no corruption or trade barriers.

Productivity is vital to economic growth. Labor must be used efficiently and resources—including technology—must be used efficiently, and capital, certainly, cannot be wasted.