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By Robert S. Kaplan, David P. Norton

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Extra resources for Balanced Scorecard Report - The Strategy Execution Source - Volume 10 Number 3 - May-Jun 2008

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There has been a general loss in competitiveness of the country’s tradeable’s sector’ (Corden, 1994, p. 4 In due course, the current account deficit could be adjusted and competitiveness could be improved using a mixture of exchange rate depreciation and deflation. Thus, from a macroeconomic perspective, competitiveness policy and exchange rate policy are largely synonymous. The association of short-run competitiveness with the real exchange rate raises the issue of its measurement. As mentioned above by Corden, theory suggests that the appropriate definition of the real exchange is the relative price of non-tradeables to tradeables.

Starting at the top left of the diagram, enterprises begin by importing technology in embodied forms (FDI, licensing, equipment and copying). Then they invest in building their abilities to master the tacit elements of the technology. They draw upon a variety of internal (human resources, technological effort, management effort and organisational effort) and external inputs (other firms, technology support, skills, finance and infrastructure) to build up their capabilities. The process starts with capabilities needed to master the technology for production purposes, and may deepen over time into improving the technology and creating new technology.

G. g. technology institutions, training bodies and SME service providers) in a national innovation system. e. collective learning) in a national innovation system is a fundamental characteristic of capability building. Success in acquiring firm-level technological capabilities can spillover into export success. 18 The technology and innovation perspective adds an additional insight to previous theories of comparative advantage. The major theories ignore the basis of comparative advantage as being ‘minor learning’ in developing countries.

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