Productivity is not simply doing things better, but doing better things. It is not just working harder and working smarter, but also choosing where to work. Another way to understand the paradox of productivity is to analyze the following two questions. If Firm A hires an employee from Firm B and doubles the salary for the same amount of work, is the employee now twice as productive? Most people would say no.
The competitiveness paradigm describes the importance of the political, legal, and macroeconomic context, and also the quality of the microeconomic business environment and the sophistication of company operations and strategy. As countries develop, the quality of private sector business decisions seems to become relatively more important in achieving company, industry, and national competitiveness. But this is an area often neglected. Many countries that have engaged in difficult macroeconomic reforms have been disappointed by the slow response of private investment. The future progress may depend more heavily on business strategy and private sector leadership.
As private companies focus on more complex exports, greater wealth is generated for the nation. It also creates a dynamic in which private companies invest in human capital to create the skills and innovation that allow them to maintain the competitive edge in these complex exports. These exports depend on higher skill levels and lead to higher income levels. Poor competitive strategies based solely on cost in undifferentiated product and service areas create the opposite incentive – i.e. for lower wages, cheaper costs, and devaluation.
A “competitive” country is easily recognized as having progressively higher real wage levels—but driven by productivity rather than government fiat. A competitive country is characterized by increasingly strong currency levels, based on market forces and good policy rather than artificial exchange controls. Competitive countries are characterized by the ability of the average citizen to increase his/her purchasing power both domestically and internationally.
It is hard to understate the economic difficulties that Malaysia is facing. The Government of Malaysia faces the challenge of stimulating rapid economic growth, while at the same time promoting broad-based disbursements of the benefits of growth to its citizens. Little or no progress was made in Malaysia’s competitiveness because of the government policy which has created a subsidy society rather than a competitiveness society.
It is an important goal to improve the living standards of people in a sustainable way. These improvements are a function of the competitiveness of Malaysian enterprises and the competitiveness of the Malaysian economy and its components.
Competitiveness at the national level can be defined as the ability of a country to produce products and services that meet the test of the market place, while delivering high and rising standards of living for the average person. Benchmarking is the measurement of performance relative to a particular reference group and normally relative to those who are doing the best job in a particular area of endeavor. The benchmarks also serve to measure one’s own progress over time.
Malaysia has yet to achieve the structural reforms to ensure efficient market intermediation and to secure a foundation for its economy based on market knowledge, productivity, and product diversity that will improve the standard of living for a large proportion of Malaysians.
exclusively by mi1
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