Essay About Market Economy And New World Economic Order

Canada and the New World Economic Order
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Canadas economic system is a market economy, encompassing the production,
sales and distribution of goods and services based upon
prices set in the marketplace. The marketplace establishes an economic
framework within which firms compete on the basis of a number
of factors: price, quality, delivery, after-sales service etc. Competitiveness is
a measure of the ability to succeed in this context. This article presents several
different approaches to mcasuring competitiveness, and analyzes many of the
factors influencing its enhancement.
TJlE CONCEPT OF COMPETITJWNESS
The World Competitiveness Report, prepared by the Geneva-based World Economic
Forum and the International Management Development Institutc in
Lausanne, defines competitiveness as “the ability to design, produce and market
goods and services, the price and non-price characteristics of which form a
more attractive package than those of c~mpetitors.”~
Global Competitiveness
Until relatively recently competitiveness could be viewed primarily from a
domestic perspective, since the majority of firms competed only in a domestic
marketplace. Manufactured goods tended to be large and bulky, making it difficult
t o conduct significant international trade. Of course, considerable international
commerce did takc placc, but it was primarily in commodities –
agricultural products and natural resources.
This is no longer the case. The nature of production and distribution in
the world economy has changed dramatically in the past 50 years or so. The
advent of technologies (such as microelectronics) and thc introduction of new
materials (such as plastics) resulted in the miniaturization of many goods, Icading
to the development of manufactured products that arc much more casily
DAVID BARROWS AND JOHN A. COTSOMITIS
transported. It is now possible – and indeed, common to ship significant
quantities of automobiles from Japan to North America, an undertaking that
would have been unthinkable even 30 years ago. With technological breakthroughs
in communications and transportation, therc has also been a significant
increase in the exchange of tradeable services in a wide variety of fields,
including construction, engineering, architecture, legal and accounting services
and tourism.
As a result of the significant increase in international trade of manufactured
goods and services, many economists and business strategists have concluded
that competitiveness must now be defined in a broader, international,
context. Competitors are no longer within the same community or nation state.
Firms must think of competition as truly global in terms of both gaining export
markets and defending against competitors in domestic markets.
Goals of Competitiveness
From a broader societal perspective, it is not useful to view global competitiveness
as an end in itself. Rather, an internationally competitive economy is a
means to an end – the requirement for enhanced social well-being. Wealth creation
is necessary in order to fund social services and produce a high and rising
standard of living. It also appears to be a necessity for society to ultimately
achieve its higher-order goals, including personal freedom, security and a better
quality