1 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Competitiveness in the Global Economy:Sweden’s Position
Professor Michael E. PorterDr Christian Ketels
Institute for Strategy and Competitiveness Harvard Business School
Globalization CouncilStockholm, Sweden
April 27, 2007
This presentation draws on ideas from Professor Porter’s articles and books, in particular, The Competitive Advantage of Nations (The Free Press, 1990), “Building the Microeconomic Foundations of Competitiveness,” in The Global Competitiveness Report 2006 (World Economic Forum, 2006), “Clusters and the New Competitive Agenda for Companies and Governments” in On Competition (Harvard Business School Press, 1998), and ongoing research on clusters and competitiveness. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means - electronic, mechanical, photocopying, recording, or otherwise - without the permission of Michael E. Porter.Further information on Professor Porter’s work and the Institute for Strategy and Competitiveness is available at www.isc.hbs.edu
2 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
A Changing Global Competitive Environment
• Fewer barriers to trade and investment• Rapidly increasing stock and diffusion of knowledge• Competitiveness upgrading in many countries
• Globalization of markets• Globalization of value chains• Internationalization of capital, especially portfolio investment• Increasing knowledge and skill intensity of competition• Value increasingly in the service component of activities
• Productivity increasingly determines success• Competition among nations need not be zero-sum• Economic success depends on providing unique value, not
just meeting best practice benchmarks
Driver
Marketreaction
Implications
3 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Swedish Competitiveness in 2007
• Sweden is one of the primary beneficiaries of globalization
HOWEVER
• Other countries are catching up, exposing remaining weaknesses in Swedish competitiveness
• Recent policy changes are a move in the right direction but they are not sufficient
4 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Long-Term Trends in Prosperity
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
EU-15
United States
GDP per capita, US-$, PPP-adjusted
Source: Groningen Growth and Development Center, The Conference Board, 2006
Sweden
Countries that have surpassed Swedenin terms of prosperity:
1970s: Canada, Iceland, Norway1980s: Austria, Denmark1990s: Australia, Ireland, UK
5 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
What Creates Sustainable Prosperity?
ProductivityProductivity
Innovative CapacityInnovative CapacityInnovative Capacity
Competitiveness
ProsperityProsperityProsperity
6 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Microeconomic CapabilitiesMicroeconomic Capabilities
Quality of the Business
Environment
Quality of the Quality of the BusinessBusiness
EnvironmentEnvironment
Sophisticationof Company
Operations andStrategy
SophisticationSophisticationof Companyof Company
Operations andOperations andStrategyStrategy
Determinants of Productivity and Productivity Growth
Macroeconomic, Political, Legal, and Social ContextMacroeconomic, Political, Legal, and Social ContextMacroeconomic, Political, Legal, and Social Context
• A sound context creates the potential for competitiveness, but is not sufficient• Competitiveness ultimately depends on improving the microeconomic capability
of the economy and the sophistication of local companies and local competition
7 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Context for Firm
Strategy and Rivalry
Context for Firm
Strategy and Rivalry
Related and Supporting Industries
Related and Supporting Industries
Factor(Input)
Conditions
Factor(Input)
ConditionsDemand
ConditionsDemand
Conditions
Improving the Business Environment
• Successful economic development is a process of successive economic upgrading, in which the business environment in a nation evolves to support and encourage increasingly sophisticated ways of competing
Sophisticated and demandinglocal customer(s)Local customer needs that anticipate those elsewhereUnusual local demand in specialized segments that can be served nationally and globally
Presence of high quality, specialized inputs available to firms
–Human resources–Capital resources–Physical infrastructure–Administrative infrastructure–Information infrastructure–Scientific and technological
infrastructure–Natural resources
Access to capable, locally based suppliersand firms in related fieldsPresence of clusters instead of isolated industries
A local context and rules that encourage investment and sustained upgrading
–e.g., Intellectual property protection
Meritocratic incentive systems across all major institutionsOpen and vigorous competition among locally based rivals
8 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
The Boston Life Sciences Cluster
Research OrganizationsResearch OrganizationsResearch Organizations
Biological Products
Biological Biological ProductsProducts
Specialized Risk CapitalVC Firms, Angel Networks
Specialized Risk CapitalVC Firms, Angel Networks
Biopharma-ceutical
Products
BiopharmaBiopharma--ceuticalceutical
ProductsProducts
Specialized BusinessServices
Banking, Accounting, Legal
Specialized BusinessServices
Banking, Accounting, Legal
Specialized ResearchService Providers
Laboratory, Clinical Testing
Specialized ResearchService Providers
Laboratory, Clinical Testing
Dental Instrumentsand Suppliers
Dental Instrumentsand Suppliers
Surgical Instruments and Suppliers
Surgical Instruments and Suppliers
Diagnostic SubstancesDiagnostic Substances
ContainersContainersContainers
Medical EquipmentMedical Equipment
Ophthalmic GoodsOphthalmic Goods
Health and Beauty Products
Health and Beauty Health and Beauty ProductsProducts Teaching and Specialized HospitalsTeaching and Specialized Hospitals
Educational InstitutionsHarvard University, MIT, Tufts University,
Boston University, UMass
Educational InstitutionsHarvard University, MIT, Tufts University,
Boston University, UMass
Cluster OrganizationsMassMedic, MassBio, othersCluster Organizations
MassMedic, MassBio, others
Analytical InstrumentsAnalytical InstrumentsAnalytical Instruments
9 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Institutions for CollaborationSelected Massachusetts Organizations, Life Sciences
Economic Development InitiativesEconomic Development Initiatives
Massachusetts Technology CollaborativeMass Biomedical InitiativesMass DevelopmentMassachusetts Alliance for Economic Development
Massachusetts Technology CollaborativeMass Biomedical InitiativesMass DevelopmentMassachusetts Alliance for Economic Development
Life Sciences Industry AssociationsLife Sciences Industry Associations
Massachusetts Biotechnology CouncilMassachusetts Medical Device Industry CouncilMassachusetts Hospital Association
Massachusetts Biotechnology CouncilMassachusetts Medical Device Industry CouncilMassachusetts Hospital Association
General Industry AssociationsGeneral Industry Associations
Associated Industries of MassachusettsGreater Boston Chamber of CommerceHigh Tech Council of Massachusetts
Associated Industries of MassachusettsGreater Boston Chamber of CommerceHigh Tech Council of Massachusetts
University InitiativesUniversity Initiatives
Harvard Biomedical CommunityMIT Enterprise ForumBiotech Club at Harvard Medical SchoolTechnology Transfer offices
Harvard Biomedical CommunityMIT Enterprise ForumBiotech Club at Harvard Medical SchoolTechnology Transfer offices
Informal networksInformal networks
Company alumni groupsVenture capital communityUniversity alumni groups
Company alumni groupsVenture capital communityUniversity alumni groups
Joint Research InitiativesJoint Research Initiatives
New England Healthcare InstituteWhitehead Institute For Biomedical ResearchCenter for Integration of Medicine and Innovative Technology (CIMIT)
New England Healthcare InstituteWhitehead Institute For Biomedical ResearchCenter for Integration of Medicine and Innovative Technology (CIMIT)
10 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
TradedTraded LocalLocalLocal NaturalResource-Driven
NaturalNaturalResourceResource--DrivenDriven
29.3%0.7%
$49,367137.2%
4.2%
144.1
23.0
590
29.3%0.7%
$49,367137.2%
4.2%
144.1
23.0
590
70.0%2.4%
$30,41684.53.4%
79.3
0.4
241
70.0%70.0%2.4%2.4%
$30,416$30,41684.584.53.4%3.4%
79.379.3
0.40.4
241241
0.7%-1.2%
$35,81599.52.1%
140.1
3.3
48
0.7%0.7%--1.2%1.2%
$35,815$35,81599.599.52.1%2.1%
140.1140.1
3.33.3
4848
Share of EmploymentEmployment Growth Rate,
1990 to 2004
Average WageRelative WageWage Growth
Relative Productivity
Patents per 10,000 Employees
Number of SIC Industries
Note: 2004 data, except relative productivity which uses 1997 data.Source: Prof. Michael E. Porter, Cluster Mapping Project, Institute for Strategy and Competitiveness, Harvard Business School
The Composition of Regional EconomiesUnited States, 2004
11 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Specialization of Regional EconomiesSelect U.S. Geographic Areas
BostonAnalytical InstrumentsEducation and Knowledge CreationCommunications Equipment
BostonAnalytical InstrumentsEducation and Knowledge CreationCommunications Equipment
Los Angeles AreaApparelBuilding Fixtures,
Equipment and Services
Entertainment
Los Angeles AreaApparelBuilding Fixtures,
Equipment and Services
Entertainment
ChicagoCommunications EquipmentProcessed FoodHeavy Machinery
ChicagoCommunications EquipmentProcessed FoodHeavy Machinery
Denver, COLeather and Sporting GoodsOil and GasAerospace Vehicles and Defense
Denver, COLeather and Sporting GoodsOil and GasAerospace Vehicles and Defense
San DiegoLeather and Sporting GoodsPower GenerationEducation and Knowledge Creation
San DiegoLeather and Sporting GoodsPower GenerationEducation and Knowledge Creation
San Francisco-Oakland-San Jose Bay AreaCommunications EquipmentAgricultural ProductsInformation Technology
San Francisco-Oakland-San Jose Bay AreaCommunications EquipmentAgricultural ProductsInformation Technology
Seattle-Bellevue-Everett, WAAerospace Vehicles and DefenseFishing and Fishing ProductsAnalytical Instruments
Seattle-Bellevue-Everett, WAAerospace Vehicles and DefenseFishing and Fishing ProductsAnalytical Instruments
HoustonHeavy Construction ServicesOil and GasAerospace Vehicles and Defense
HoustonHeavy Construction ServicesOil and GasAerospace Vehicles and Defense
Pittsburgh, PAConstruction MaterialsMetal ManufacturingEducation and Knowledge
Creation
Pittsburgh, PAConstruction MaterialsMetal ManufacturingEducation and Knowledge
Creation
Atlanta, GAConstruction MaterialsTransportation and LogisticsBusiness Services
Atlanta, GAConstruction MaterialsTransportation and LogisticsBusiness Services
Raleigh-Durham, NCCommunications EquipmentInformation TechnologyEducation andKnowledge Creation
Raleigh-Durham, NCCommunications EquipmentInformation TechnologyEducation andKnowledge Creation
Wichita, KSAerospace Vehicles and
DefenseHeavy MachineryOil and Gas
Wichita, KSAerospace Vehicles and
DefenseHeavy MachineryOil and Gas
Note: Clusters listed are the three highest ranking clusters in terms of share of national employmentSource: Cluster Mapping Project, Institute for Strategy and Competitiveness, Harvard Business School
12 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Plastics
Oil and Gas
Chemical Products
Pharma-ceutical
Power Generation
Aerospace Vehicles &
Defense
Lightning & Electrical Equipment
Financial Services
Publishing and Printing
Entertainment
Hospitality and Tourism
Trans-portation
and Logistics
Information Tech.
Communi-cations
Equipment
Medical Devices
Analytical Instruments
Education and
Knowledge Creation
ApparelLeather
and Related Products
Agricultural Products
Processed Food
FurnitureBuilding Fixtures,
Equipment and
Services
Note: Clusters with overlapping borders or identical shading have at least 20% overlap (by number of industries) in both directions. Clusters in which Stockholm has a strong position within Sweden are in bold
Sporting and Recreation
Goods
Business Services
DistributionServices
Fishing & Fishing
Products
Footwear
Forest Products
Heavy Construction
Services
Jewelry & Precious Metals
ConstructionMaterials
Prefabricated Enclosures
Textiles
Tobacco
Heavy Machinery
Aerospace Engines
Automotive
Production Technology
Motor Driven Products
Metal Manufacturing
Related Clusters in the U.S. EconomySchematic Representation
13 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Cross-National Collaboration of Cluster Initiatives
FINLANDCentre of Expertise, Gene Technology
and Molecular BiologyFIVDIC, In Vitro Diagnostics Industry ClusterCulminatum, Medical &Welfare Technologies
Technology Centre Teknia Ltd
FINLANDCentre of Expertise, Gene Technology
and Molecular BiologyFIVDIC, In Vitro Diagnostics Industry ClusterCulminatum, Medical &Welfare Technologies
Technology Centre Teknia Ltd
NORWAYBIOINN
BCNorth
NORWAYBIOINN
BCNorth
SWEDENBiotech UmeåUppsala BIO
Biomedical Development, West SwedenLivets Nya Verktyg
Healthcare Technology AllianceBioMedley
SWEDENBiotech UmeåUppsala BIO
Biomedical Development, West SwedenLivets Nya Verktyg
Healthcare Technology AllianceBioMedley
NORTHERN GERMANYLife Sciences SH & HH
BioCon ValleymedRegio Luebeck
NORTHERN GERMANYLife Sciences SH & HH
BioCon ValleymedRegio Luebeck
DENMARKbioTEAMsouth
BioMedico Forum
DENMARKbioTEAMsouth
BioMedico Forum
ESTONIAEstonian Biotechnology Association
Tartu Biotech Cluster
ESTONIAEstonian Biotechnology Association
Tartu Biotech Cluster
CROSS-BORDER EFFORTSScanBalt
Medicon Valley AcademyMedCoast Scandinavia
CROSS-BORDER EFFORTSScanBalt
Medicon Valley AcademyMedCoast Scandinavia
14 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
The Process of Economic DevelopmentShifting Roles and Responsibilities
Old ModelOld Model
• Government drives economic development through policy decisions and incentives
• Government drives economic development through policy decisions and incentives
New ModelNew Model
• Economic development is a collaborative process involving government at multiple levels, companies, teaching and research institutions, and institutions for collaboration
• Economic development is a collaborative process involving government at multiple levels, companies, teaching and research institutions, and institutions for collaboration
• Competitiveness must become a bottom-up process in which many individuals, companies, clusters, and institutions take responsibility
• Every region and cluster can take steps to enhance competitiveness
• Successful competitiveness efforts set clear priorities reflecting the specific barriers companies face
15 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Swedish Competitiveness 2007
• Prosperity driven by solid levels of productivity and labor mobilization– Labor productivity still below EU-15 average but closing the gap– Labor mobilization advantage relative to EU-15 stable after
significant drop in 1990s; little job creation in the private sector
• Strong integration into global markets, driven by core of multinationals– Export market share broadly stable, shifting to services– Significant presence of foreign companies– Strong outward investment, especially in the Baltic Sea Region
• Low domestic investment rate
• High but falling patenting rate– Universities leading in the region, but not globally
16 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Productivity versus Working HoursSelected Countries
0
10
20
30
40
50
60
70
500 600 700 800 900 1000 1100 1200
Real GDP per Hour Worked, PPP adjusted, 2005
Hours worked per Capita, 2005
LatviaEstonia
Finland
LithuaniaRussia*
Germany
Poland
Norway*
Note: Affected by oil revenuesSource: Groningen Growth and Development Centre and The Conference Board (2006), authors’ calculations
Denmark SWEDEN
Japan
S Korea
Mexico
United States
Australia
New Zealand
IrelandFrance
Iceland
UK
NL
SwitzerlandItaly
Belgium
Spain
Portugal
Canada
Czech RepublicHungary
Slovakia
Slovenia
Greece
17 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Long-Term Trends in Labor Productivity
0
10
20
30
40
50
60
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
GDP per hour worked US-$, PPP-adjusted
Source: Groningen Growth and Development Center, The Conference Board, 2006
EU-15
United StatesSweden
Catch-Up Stagnation New Growth
18 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Long-Term Trends in Labor MobilizationSweden versus EU-15
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Employees as % of Population
Hours per Employee
Gap in %, Sweden versus EU-15
Unemployment
Source: Groningen Growth and Development Center, The Conference Board, 2006
Net Gap
19 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Entrepreneurship
0%
5%
10%
15%
20%
25%
30%
Greece Ita
lyPort
ugal
Polen
Cypern
Spain
Irelan
d
Czech
Rep
ublic
Lithu
ania
Malta
Hunga
ryBelg
iumSlov
akia UK
Austria
Finlan
dNeth
erlan
dGerm
any
France
Sweden
Latvi
aSlov
enia
Luxe
mbourg
Denmark
Estonia
Norway
Share of Entrepreneurs in the Labor Force, 2005
Source: NUTEK (2007)
20 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
SwedenCluster Export Portfolio, 1997-2005
Change in Sweden’s world export market share, 1997 – 2005Source: Prof. Michael E. Porter, International Cluster Competitiveness Project, Institute for Strategy and Competitiveness, Harvard Business School; Richard Bryden, Project Director. Underlying data drawn from the UN Commodity Trade Statistics Database and the IMF BOP statistics.
Swed
en’s
wor
ld e
xpor
t mar
ket s
hare
, 200
5
0%
1%
2%
3%
4%
5%
6%
7%
8%
-3.5% -2.5% -1.5% -0.5% 0.5% 1.5% 2.5%
Change In Sweden’s Overall World Export Share: -0.05%
Sweden’s Average World Export Share: 1.44%
Exports of US$2 Billion =
Forest Products
Business Services
Communications EquipmentFurniture
Communications Services
ConstructionServices
(1.32%,-4.37%)
Biopharmaceuticals
Power and Power Generation Equipment
Fishing and Fishing ProductsFinancial
Services
Medical Devices
Aerospace Engines
Aerospace Vehicles and Defense
Publishing and Printing
21 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
SwedenCluster Export Portfolio, 1997-2005 (continued)
Change in Sweden’s world export market share, 1997 – 2005Source: Prof. Michael E. Porter, International Cluster Competitiveness Project, Institute for Strategy and Competitiveness, Harvard Business School; Richard Bryden, Project Director. Underlying data drawn from the UN Commodity Trade Statistics Database and the IMF BOP statistics.
Swed
en’s
wor
ld e
xpor
t mar
ket s
hare
, 200
5
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
-0.5% -0.3% -0.1% 0.1% 0.3% 0.5%
Change In Sweden’s Overall World Export Share: -0.05%
Sweden’s Average World Export Share: 1.44%
Publishing and Printing
Automotive
Metal Mining and Manufacturing
Transportation and Logistics
Production Technology
Hospitality and Tourism
Oil and Gas Products
Plastics
Motor Driven Products Heavy Machinery
Chemical Products
Analytical InstrumentsProcessed Food
Information Technology
Building Fixtures and Equipment
Entertainment and Reproduction Equipment
Lighting and Electrical Equipment
Agricultural Products
Prefabricated Enclosures and Structures
Textiles
Apparel
Construction MaterialsMarine Equipment
Jewelry, Precious Metals and Collectibles
Sporting, Recreational and Children's Goods
Leather and Related Products
Footwear
Tobacco
Exports of US$2 Billion =
22 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Foreign Direct InvestmentSelected Countries
0%
20%
40%
60%
80%
100%
120%
140%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Inflows of Foreign Direct Investment, in % of Domestic Capital Formation, 2001 - 2005
Stock of Foreign Direct Investment, in
% of GDP, 2005
SWEDENCzech Republic
Estonia
New Zealand
Chile
UK
US
Australia
Japan
Iceland
Hungary
Italy ChinaIndia
ThailandDenmark
Slovakia
Switzerland
Netherlands
Germany Finland
Ireland
Belgium
Source: World Investment Report (2006), author’s analysis.
23 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Capital Investment IntensitySelected Countries
15%
17%
19%
21%
23%
25%
27%
29%
31%
-4% -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18%
Source: EIU (2006), author’s analysis.
Denmark
FinlandGermany
Estonia
Latvia
Lithuania
PolandNorway
RussiaSWEDEN
US
Taiwan
S Korea
SingaporeJapan
New Zealand
India
Chile
Ireland
Brazil
Australia
Gross Investment in % of GDP, 2005
Growth Rate of Real Gross Investment, CAGR, 2000 - 2005
Canada
Iceland
24 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
0
50
100
150
200
250
300
-10% -5% 0% 5% 10% 15%
Patents per 1000 Capita, 2005
Growth of Patents per Capita, CAGR, 2000-2005
Innovation PerformancePatenting in the United States
Source: USPTO (2006), author’s analysis.
Denmark
Finland
Germany
Russia
SWEDEN
Norway
United States
Japan
Taiwan
France UK
Canada
Switzerland
Italy
South Korea
Australia
Israel
Singapore
Hong KongIreland
AustriaNL Iceland
New ZealandSpain MalaysiaSouth Africa Hungary
China (.3, +27%)India (.3, +22%)
25 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Sweden in the Business Competitiveness Index Key Observations
• Sweden ranks 7 on the Business Competitiveness Index and has been consistently among the top 10 in most years
Changes over time• Sweden has in the medium-term lost ground on critical competitiveness
factors relative to its peers, despite the positive current results
Wages • Swedish wages are broadly in line with the level of competitiveness but
wage growth has recently been stronger than the speed of competitiveness upgrading
Challenges• Sweden continues to suffer from an imbalance between sound
macroeconomic policies and strong companies on the one hand and a weaker business environment conditions on the other
• Key weaknesses are educational quality, government efficiency, and infrastructure
26 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
BCI Value, 2006
Dynamism Score, 2002 - 2006
India
China Pakistan
Italy
Finland
AustraliaSWEDEN
NorwayHong KongJapan
Portugal
Malaysia
Turkey
El SalvadorPeru
United States Germany
Chad
MaliVietnam
MalawiZimbabwe
High-incomeMiddle-incomeLow-income
EstoniaChile
Switzerland
Iceland
Ireland
Paraguay
Dominican Rep.
EthiopiaBolivia
Mozambique NicaraguaHonduras
Bangladesh
Nigeria
BrazilTrinidad
Slovenia
Russia
Spain
New Zealand
ColombiaJordan
Greece
South Africa
Ukraine
Thailand
Uruguay
Argentina
Mauritius
Slovak RepublicLithuania
High
Low
Below average Above averageAverage
Medium-Term Dynamism in Competitiveness
Source: Global Competitiveness Report (2006)
27 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
$0
$5
$10
$15
$20
$25
$30
$35
$40
Hourly Wage in Manufacturing, 2004
Brazil
Finland
Denmark
Canada
Hungary
Italy
Mexico
Korea
Norway Germany
Hong KongTaiwanSingapore
Source: Global Competitiveness Report 2006, Eurostat, Bureau of Labor Statistics
Business Competitiveness Index 2004 HighLow
Australia
Austria
Belgium
Bulgaria
Cyprus
Czech RepublicEstonia
France
Greece
Iceland
Ireland
Israel
Japan
LithuaniaLatvia
Malta
Netherlands
New Zealand
Portugal
Poland
Romania
Slovenia
Slovakia
Spain
SWEDENSwitzerland
UK
United States
Sri Lanka
Locational Value: Competitiveness and Wages
28 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
University/industry research collaboration 3
Local equity market access 3
Ease of access to loans 5
Efficiency of legal framework 6
Venture capital availability 9
Quality of scientific research institutions 9
Financial market sophistication 10
Availability of scientists and engineers 10
Telephone/fax infrastructure quality 11
Railroad infrastructure development 12
Port infrastructure quality 14
Competitive Disadvantages Relative to GDP per Capita
Competitive Advantages Relative to GDP per Capita
Quality of math and science education 35
Reliability of police services 26
Quality of public schools 25
Quality of management schools 25
Air transport infrastructure quality 23
Quality of electricity supply 18
Overall infrastructure quality 17
Country Ranking, Arrows indicate a change of 5 or more
ranks since 2001
Country Ranking, Arrows indicate a change of 5 or more
ranks since 2001
Factor (Input) ConditionsSweden’s Relative Position 2006
Factor(Input)
Conditions
Factor(Input)
Conditions
Note: Rank versus 121 countries; overall, Sweden ranks 7th in Business Competitiveness and 18th in 2005 PPP adjusted GDP per capita.Source: Global Competitiveness Report 2006-2007.
29 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Context for Firm Strategy and RivalrySweden’s Relative Position 2006
Efficacy of corporate boards 2
Prevalence of trade barriers 4
Intellectual property protection 8
Business costs of corruption 9
Intensity of local competition 11
Favoritism in decisions of government 11 officials
Effectiveness of antitrust policy 14
Competitive Disadvantages Relative to GDP per Capita
Competitive Advantages Relative to GDP per Capita
Centralization of economic policymaking 65
Decentralization of corporate activity 25
Cooperation in labor-employer relations 18
Country Ranking, Arrows indicate a change of 5 or more
ranks since 2001
Country Ranking, Arrows indicate a change of 5 or more
ranks since 2001
Context for Firm Strategy and Rivalry
Context for Firm Strategy and Rivalry
Note: Rank versus 121 countries; overall, Sweden ranks 7th in Business Competitiveness and 18th in 2005 PPP adjusted GDP per capita.Source: Global Competitiveness Report 2006-2007.
30 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Demand ConditionsSweden’s Relative Position 2006
Competitive Disadvantages Relative to GDP per Capita
Competitive Advantages Relative to GDP per Capita
Country Ranking, Arrows indicate a change of 5 or more
ranks since 2001
Country Ranking, Arrows indicate a change of 5 or more
ranks since 2001
Stringency of environmental regulations 5
Presence of demanding regulatory 5 standards
Demand ConditionsDemand
Conditions
Laws relating to ICT 18
Government procurement advanced 18technology products
Buyer sophistication 16
Note: Rank versus 121 countries; overall, Sweden ranks 7th in Business Competitiveness and 18th in 2005 PPP adjusted GDP per capita.Source: Global Competitiveness Report 2006-2007.
31 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Related and Supporting IndustriesSweden’s Relative Position 2006
Competitive Disadvantages Relative to GDP per Capita
Competitive Advantages Relative to GDP per Capita
Country Ranking, Arrows indicate a change of 5 or more
ranks since 2001
Related and Supporting Industries
Related and Supporting Industries
Local supplier quality 7
Local availability of specialized research 9 and training services
Local availability of process machinery 10
Local supplier quantity 11
Country Ranking, Arrows indicate a change of 5 or more
ranks since 2001
Note: Rank versus 121 countries; overall, Sweden ranks 7th in Business Competitiveness and 18th in 2005 PPP adjusted GDP per capita.Source: Global Competitiveness Report 2006-2007.
32 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Action Priorities
• Further strengthen physical and communication infrastructure to connect better to the neighborhood and the world
• Educate the public on the benefits of globalization for Sweden
• Sustain focus on education and skill upgrading
• Increase attractiveness for human capital from abroad
• Create a better environment for entrepreneurship
• Achieve world-class in science areas tied to cluster strengths
• Integrate the environmental and competitiveness agendas
• Create a strategy for economic integration of immigrant groups
• Pursue deep integration in the Baltic Sea Region
33 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Moving Towards a New Model for SwedenKey Themes
• Sound macroeconomic policies, solid institutions, and high skills are the basis of competitiveness
• Capital-intensive multinationals drive the economy
• Innovation is based on large company R&D, drawing on university research
• National government defines and executes policy
• Strong microeconomic foundations and regional specialization add critical strengths to competitiveness
• Knowledge-intensive clusters of entrepreneurs drive the economy
• Innovation emerges in open networks of academia and firms of all sizes
• Policy design and execution in triple helix partnership
34 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Finnish Science and Technology
Council
Competitiveness Councils
Internal coordination of government
policies
Public debate of sources of
competitiveness
Encourage collaboration and consensus across public and private
sectors
Danish Globalization
Council
U.S. Council on Competitiveness
35 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Background Data
36 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
0% 1% 2% 3% 4% 5% 6% 7% 8% 9%
Comparative Economic PerformanceSelected Countries
Compound annual growth rate of real GDP per capita, 1998-2005
GDP per capita (PPP
adjusted) in US-$,
2005
Iceland
Czech Rep.
EstoniaHungary
LatviaPolandSlovakia
Slovenia
Denmark
FinlandFranceGermany
India
Japan
S Korea
NL
Norway
Australia, Canada,
U.K.
China
U.S.
SWEDENSwitzerland
Ireland
Greece
Source: Groningen Growth and Development Centre and The Conference Board (2006), authors’ calculations
Lithuania
Spain
Mexico
Turkey
Portugal
New ZealandItaly
Austria
37 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Long-Term Trends in Labor Mobilization
0
200
400
600
800
1000
1200
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Annual hours worked per capita
Source: Groningen Growth and Development Center, The Conference Board, 2006
EU-15
United States
Sweden
38 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Domestic Purchasing PowerNormalized Purchasing Power Across Countries
0
1
2
3
4
5
6
India
ChinaRuss
ia
South
KoreaBraz
il
Slovak R
epub
licLa
tvia
ChileHung
aryEsto
niaLit
huania
Mexico
Poland
Czech
Rep
ublic
Taiwan
Slovenia
Greece
Portug
alSpa
in
Hong Kong
SARIta
ly
United Stat
esCana
da
New Zealan
dAus
tralia
Singap
ore
Luxe
mbourg
Irelan
dAus
triaBelg
iumNetherl
ands
German
yFranc
e
United King
domFinl
and
Sweden
Denmark
IcelandJa
pan
Norway
Switzerl
and
Source: IMF (2006), authors’ calculations
Purchasing Power Factor, 2005
39 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Sweden’s Export PerformanceWorld Export Market Shares
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
1.6%
1.8%
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
GoodsServicesTotal
Source: WTO (2006)
World export share in %
40 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Industry Cluster
World Export Share
Change in Share,
1997-2005 Export Value (in US$1,000)
1 Passenger transport vehicles Automotive 1.72% 0.19% $8,122,269
2 Miscellaneous medicaments Biopharmaceuticals 3.18% -2.49% $5,321,590
3 Petroleum Oils Oil and Gas Products 1.58% 0.01% $5,095,941
4 Parts for telecommunication equipment Communications Equipment 4.47% -4.10% $4,693,454
5 TV, radio transmitters Communications Equipment 3.06% -10.94% $4,242,399
6 Flat-rolled products of alloy steel Metal Mining and Manufacturing 8.74% 1.09% $3,532,018
7 Wood of conifer, sawn Furniture 12.63% -0.69% $2,808,103
8 Line telephone or telegraph equipment Communications Equipment 6.21% 3.48% $2,182,022
9 Miscellaneous paper and paperboard, coated Forest Products 10.66% 1.31% $2,051,603
10 Kraft paper and paperboard, uncoated Forest Products 20.19% -0.83% $1,726,457
11 Paper and paperboard, uncoated Forest Products 8.48% 1.08% $1,678,481
12 Chemical wood pulp, soda, bleached Forest Products 9.65% 0.38% $1,580,115
13 Other parts for motor vehicles Automotive 1.32% -1.09% $1,562,860
14 Internal combustion engines for vehicles Automotive 2.81% -0.23% $1,443,783
15 Road tractors, semi-trailers Automotive 6.14% 1.49% $1,240,373
16 Iron Ore and Concentrates Metal Mining and Manufacturing 4.18% -1.68% $1,123,839
17 Iron or steel bars, rods, angles, shapes and sections Metal Mining and Manufacturing 2.24% -0.94% $1,120,379
18 Medicaments containing hormones Biopharmaceuticals 5.57% -1.04% $1,100,424
19 Other parts of vehicle bodies Automotive 2.52% -0.67% $1,085,385
20 Newsprint, rolls, sheets Forest Products 9.99% -1.74% $938,702
21 Motor vehicle bodies Automotive 15.43% -1.00% $868,325
22 Fish, fresh, chilled, or frozen Fishing and Fishing Products 2.77% 1.68% $850,010
23 Polymers of ethylene Plastics 2.19% 2.02% $788,119
24 Work trucks, tractors, and parts Production Technology 6.54% 0.87% $778,778
25 Other plastics in primary forms Plastics 1.26% 0.70% $764,654
SwedenLeading Goods Export Industries, 2005
Source: Prof. Michael E. Porter, International Cluster Competitiveness Project, Institute for Strategy and Competitiveness, Harvard Business School; Richard Bryden, Project Director. Underlying data drawn from the UN Commodity Trade Statistics Database and the IMF BOP statistics.
41 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Industry Cluster
World Export Share
Change in Share,
1997-2005 Export Value (in US$1,000)
26 Insulted wire, cable and conductors Communications Equipment 1.45% -0.51% $752,156
27 Ball or roller bearings Production Technology 3.85% -0.72% $726,793
28 Flat-rolled iron, not clad, plated or coated Metal Mining and Manufacturing 1.17% -0.49% $722,591
29 Electric current Power and Power Generation Equipment 3.35% 3.35% $719,514
30 Miscellaneous goods vehicles Automotive 0.93% 0.65% $716,505
31 Paper and paperboard, coated, other Forest Products 7.51% 2.42% $654,918
32 Other medical instruments Medical Devices 1.61% -0.66% $650,456
33 Industrial washing, bottling machinery Production Technology 3.99% 0.00% $616,407
34 Motor vehicle chassis Automotive 20.92% 7.14% $612,510
35 Spirits Agricultural Products 3.85% 1.87% $592,975
36 Miscellaneous articles of pulp, paper and paperboard Forest Products 4.49% 0.20% $589,734
37 Other recorded media Entertainment and Reproduction Equipment 2.47% 1.26% $584,794
38 Parts of jet, gas turbine engines Aerospace Engines 1.60% -1.11% $568,076
39 Seamless tubes, pipes and hollow profiles of iron or steel Metal Mining and Manufacturing 2.52% -1.46% $521,242
40 Construction, mining machinery Heavy Machinery 11.62% -1.27% $515,621
41 Miscellaneous machinery with individual functions Production Technology 1.40% 0.05% $512,652
42 Builders� joinery and carpentry of wood Furniture 4.51% -2.60% $498,075
43 Gear boxes Automotive 1.99% -0.49% $496,631
44 Artificial aids, disabled Medical Devices 2.10% -2.47% $489,379
45 Color television receivers Entertainment and Reproduction Equipment 0.93% 0.46% $481,866
46 Paints, varnishes Plastics 3.19% 0.52% $481,749
47 Miscellaneous parts of civil engineering machinery Heavy Machinery 1.62% 1.60% $480,504
48 Instruments for analysis, measuring viscosity, expansion Analytical Instruments 2.60% -0.35% $479,735
49 Electric, laser or plasma arc soldering, welding, brazing machines Production Technology 5.86% -0.34% $467,533
50 Miscellaneous articles of iron or steel Metal Mining and Manufacturing 1.61% 0.01% $465,437
SwedenLeading Goods Export Industries, 2005 (continued)
Top 50 Industries as % of Sweden’s total goods exports: 58.3% Source: Prof. Michael E. Porter, International Cluster Competitiveness Project, Institute for Strategy and Competitiveness, Harvard Business School; Richard Bryden, Project Director. Underlying data drawn from the UN Commodity Trade Statistics Database and the IMF BOP statistics.
42 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
FDI Inflows over Time
0%
20%
40%
60%
80%
100%
120%
140%
160%
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
European Union
SWEDEN
Source: UNCTAD (2006), author’s analysis.
FDI Inflows as % of Gross Domestic Investment
WorldU.S.
Inward FDI Stock as % of GDP, 2006
SWEDEN: 47.8%
European Union: 33.5%
World: 22.7%
U.S.: 13.0%
43 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Regional IntegrationForeign Direct Investment Flows
0%
10%
20%
30%
40%
50%
60%
70%
80%
Lithu
ania
Finlan
dEsto
niaNorw
ayDen
markSwed
enN P
oland
NW R
ussia
Icelan
dN G
erman
ySwedenFinlandDenmarkEstoniaN GermanyNorwayLatviaIcelandLithuaniaNW RussiaN Poland
Share of inward FDI from other BSR countries, 1999 - 2004
Source country
Source: UNCTAD, national statistical offices, author’s calculations
BSR average
44 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
ProsperityEuropean Regions
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%
GDP per Capita, Euro (PPP adjusted), 2002
Annual Growth Rate of GDP per Capita (PPP adjusted), CAGR, 1995 – 2002
Sweden
Swedish regionsOther EU-15 regionsEU accession country regions
Source: Eurostat, 2005
Sweden
Stockholm
45 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Composition of the Traded EconomyStockholm Cluster Portfolio
0%
10%
20%
30%
40%
50%
60%
-15% -10% -5% 0% 5%Change of Share in National Cluster Employment, 1995-2003
Stockholm Share of National Cluster Employment, 2003: 22.9%
Change in Stockholm’s overall share of National Cluster Employment: -0.5%
Note: Bubble size is proportional to employment levelsSource: Statistics Sweden (2005), author’s calculations
Biopharmaceuticals
Financial Services
Business ServicesCommunication Equipment
Information TechnologyDistribution Services
Education & Knowledge Creation
Heavy Construction Services
TourismPublishing & Printing
Analytical Instruments
Transportation & Logistics
Share in National Cluster Employment,
2003
46 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Global Competitiveness Report 2006-07Sweden
Global Competitiveness Index Business Competitiveness Index
20052006
1
5
10
15
20
Rank
Source: Global Competitiveness Report (2006)
3
77
11
47 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Sweden’s Profile in the Global Competitiveness Report
GCI EfficiencyEnhancers
InnovationDrivers
BasicRequirments
BCI CompanyOperations &Sophistication
BusinessEnvironment
Quality
Rank1
5
10
15
20
3
7
2
57
2
8
Source: Global Competitiveness Report (2006)
Global Competitiveness Index Business Competitiveness Index
48 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Global Competitiveness IndexSweden
Efficien
cy E
nhan
cers
Techn
ology
Higher
Educa
tion
Markets
Innov
ation
Driv
ersBus
iness
Innov
ation
Basic
Requir
ments
Health
, Edu
catio
nInf
rastru
cture
Institu
tions
Macroe
cono
mics
Rank1
5
10
15
20
Source: Global Competitiveness Report (2006)
49 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Country Context
Source: Global Competitiveness Report (2006)
50 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
123456789
10111213141516171819202122232425
123456789
10111213141516171819202122232425
Top 25Top 25 Country
000
+4-1+1+4-30
+7-50
+3+5-1-6+1-5+3+3-6-1-3+3-1
United StatesGermanyFinland
SwitzerlandDenmark
NetherlandsSWEDEN
United KingdomJapan
Hong Kong SARSingapore
AustriaIcelandNorwayCanadaFranceBelgiumAustralia
IsraelMalaysiaTaiwanIreland
New ZealandEstonia
Korea, Rep.
ChangeBusiness Competitiveness Index 2006
Note: Constant sampleof countries
51 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
United States
Switzerland
Italy
DenmarkIceland
Ireland
India
Business Competitiveness Index
2005 GDP per Capita (Purchasing Power Adjusted)
Malaysia
Source: Global Competitiveness Report 2006
SWEDEN
Canada
FinlandGermany
Qatar
Norway
HighLow
UAESpain
Israel
Brazil
Estonia
Chile
Indonesia
Greece
Bahrain
Argentina
Slovenia
SingaporeTaiwan
New Zealand
S Korea
South Africa
Thailand
JordanChina
Trinidad & Tobago
Turkey
Jamaica
Australia
Cyprus
Business Competitiveness Index 2006Relationship with GDP Per Capita
Variation in BCI score explains more than 80% of variation in GDP per capita
52 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
-15000 -10000 -5000 0 5000 10000 15000 20000GAP (Actual – Expected GDP per Capita), 2006
Sustainability in questionUntapped potential
United StatesGermany
India
Malaysia
Qatar
Norway
Italy
Chile
Argentina
Indonesia
EstoniaTunisia
Ireland
Iceland
Greece
U.A.E.Spain
Kenya
Tanzania
High-incomeMiddle-incomeLow-income
BCI Value, 2006
FinlandSWEDEN
Source: Global Competitiveness Report (2006)
Economic Sustainability of Current Prosperity
53 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Business Competitiveness Ranking Over TimeSweden
2001 2002 2003 2004 2005 2006
BCINBECOS
Rank1
5
10
15
Source: Global Competitiveness Report (2006)
54 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
-$20
-$15
-$10
-$5
$0
$5
$10
$15
$20
BelgiumIta
lyNorw
ayDen
markAus
triaIce
land
Netherl
ands
German
yGree
ceFran
ce
Switzerl
and
Finlan
dSpa
inIre
land
Cyprus
Sweden
United
Kingdo
mPola
ndMalt
aSlov
enia
Canad
aBulg
aria
Austra
liaSri L
anka
Roman
ia
Slovak
Rep
ublic
Hunga
ry
Korea,
Rep.
Mexico
Japa
nPort
ugal
United
States
Czech
Rep
ublic
Israe
lLit
huan
iaBraz
il
New Zea
land
Latvi
aEsto
niaSing
apore
Taiwan
Hong K
ong S
AR
Wages higher than justified by competitiveness
Source: Business Competitiveness Index, 2006
Wage advantagegiven competitiveness
Estim
ated
abs
olut
e ga
p in
hou
rly
wag
e in
man
ufac
turin
g, U
S-$,
200
4Wage Differentials by Country
55 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Company Operations and StrategySweden’s Relative Position 2006
Competitive Disadvantages Relative to GDP per Capita
Competitive Advantages Relative to GDP per Capita
Country Ranking, Arrows indicate a change of 5 or more
ranks since 2001
Note: Rank versus 121 countries; overall, Sweden ranks 7th in Business Competitiveness and 18th in 2005 PPP adjusted GDP per capita.Source: Global Competitiveness Report 2006-2007.
Willingness to delegate authority 1Reliance on professional management 1Capacity for innovation 2Breadth of international markets 3Extent of staff training 3Company spending on research and 5 development Extent of regional sales 5Extent of incentive compensation 5Nature of competitive advantage 7Production process sophistication 7Value chain presence 9Degree of customer orientation 9Control of international distribution 9Extent of marketing 10
Country Ranking, Arrows indicate a change of 5 or more
ranks since 2001
56 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
-20
-15
-10
-5
0
5
10
15
20
-15 -10 -5 0 5 10 15
Wage Gap – EU data
ItalyBelgium
DenmarkAustria
Germany
Finland
NetherlandsFrance
Spain
UK
HungaryPortugal
Czech Republic
Note: Countries in the grey area have changed their sign between 201 and 2004 Source: Global Competitiveness Report 2006 and Eurostat
Wage gap 2004: Actual versus expected wage
Change in wage gap 2001 - 2004
Wages above productivity level indicated by BCI
Wages rising more quickly than productivity growth
indicated by BCI
Iceland
Greece
Poland
SloveniaBulgariaRomania Slovakia
Lithuania
Latvia
Estonia
Malta
Changed sign since 2001
Changed sign since 2001
SWEDEN
57 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Stronger on company sophistication
Stronger on business environment quality
United StatesSwitzerland
Finland
Germany
Australia
Botswana
Brazil
Bulgaria
Chad
Costa Rica
Cyprus
Estonia
FranceHong Kong
IndiaIndonesiaIreland
Japan
Jordan
S Korea
Malta
Mexico
Morocco
New Zealand
NigeriaPhilippines PortugalQatar
Singapore
U.A.E.
Venezuela
Zambia
Algeria
Zimbabwe
Source: Global Competitiveness Report 2006
High-incomeMiddle-incomeLow-income
Business Environment and Company Sophistication
SWEDEN
58 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Patenting Intensity: 1996 – 2005Selected Countries
0
50
100
150
200
250
300
350
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
United StatesJapanTaiwanFinlandIsraelSwitzerlandSwedenGermanyS KoreaCanadaSingaporeIcelandDenmarkNorwayEstoniaRussiaLithuaniaLatviaPolandBrazilIndiaChina
Source: USPTO (2006), author’s analysis.
U.S. Patents per 1000 Capita
59 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
U.S. Patents by Sweden-based InstitutionsPatentor Number of patents, 2000-04
1 TELEFONAKTIEBOLAGET LM ERICSSON 16982 SANDVIK AKTIEBOLAG 2263 ASEA BROWN BOVERI AB 1794 SCA HYGIENE PRODUCTS AB 1645 ASTRAZENECA AB 1426 TETRA LAVAL HOLDINGS & FINANCE S.A. 1217 SIEMENS ELEMA AB 908 AKTIEBOLAGET ASTRA 889 VOLVO LASTVAGNAR AB 7510 AB VOLVO 7411 AKTIEBOLAGET ELECTROLUX 6412 KVAERNER PULPING AKTIEBOLAG 6413 AKZO NOBEL NV 5714 SCANIA CV AKTIEBOLAG 5615 PHARMACIA AKTIEBOLAG 5116 VALMET FIBERTECH AKTIEBOLAG 5016 VOLVO CAR CORPORATION AB 5018 ALLGON AB 4918 VOLVO PERSONVAGNAR AB 4920 DELAVAL HOLDING AB 4821 ALFA-LAVAL AB 4722 AUTOLIV DEVELOPMENT AB 4322 SECO TOOLS AB 4324 PACESETTER AB 3925 ERICSSON, Inc. 38
Source: USPTO (2006), author’s analysis.
60 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Knowledge CreationTop Universities in the Baltic Sea Region
Copyright © 2005 Institute of Higher Education, Shanghai Jiao Tong University
61 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Doing Business 2006 RankingSweden
Source: World Bank – Doing Business (2007), author’s analysis.
Category Rank
Enforcing Contracts 2Registering Property 7Trading Across Borders 9OVERALL 13Closing a Business 17Dealing with Licenses 17Starting a Business 20Getting Credit 33Paying Taxes 39Protecting Investors 46Employing Workers 94
62 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Hong KongSingaporeIrelandIcelandUKEstoniaDenmarkUnited StatesCanadaFinlandChileSwitzerlandGermanySwedenLithuaniaJapanNorwaySpainSlovakiaTaiwanSloveniaLatviaPoland
Free
Index of Economic Freedom1996 - 2006
Source: Index of Economic Freedom (2006), author’s analysis.
63 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Business Competitiveness Effectiveness of Public Spending, Selected Countries
Icelan
dFinl
and
Denmark
Norway
German
yChil
eUnit
ed S
tates
Estonia
Sweden
India
Latvi
aChin
aJa
pan
Lithu
ania
Poland
Russia
n Fed
eratio
nBraz
il
Positive
Negative
34
Note: Number refers to rank among 124 countriesSource: Global Competitiveness Report (2006), author’s analysis.
64 Copyright 2007 © Professor Michael E. PorterSweden Globalization Council 2007 04-17-07.ppt
Business Competitiveness Incentive Effect of Taxation, Selected Countries
Hong K
ong
Icelan
dSing
apore
Irelan
dEsto
nia
United
Stat
esInd
iaTaiw
an
United
King
dom
Chile
Latvi
aNorw
ayGerm
any
Canad
aMex
icoLit
huan
ia
Korea,
Rep.
Poland
Finlan
dRus
siaSwed
enDen
markBraz
il
Positive
Negative
111
Note: Number refers to rank among 124 countriesSource: Global Competitiveness Report (2006), author’s analysis.