Clusters2006

Wednesday, October 11, 2006

Michael Enright: Asia an opportunity, not a threat


The second day of the TCI conference in Lyon had governance as a theme. Michael Enright had a brilliant key-note presentation on turning the “Asian competitiveness threat” into an “Asian competitiveness possibility”. The problem, he said, is the old traditional political notion in the U.S. and EU that protective import taxes and trade barriers will do the trick.

But these measures are useless. “The rise of Asia is part of a set of trends including globalization, the IT revolution, and the emergence of the knowledge economy,” he said.

“Together these forces are reshaping the world economy, displacing some clusters from other nations, and exploding others. Outsiders do not see Asia’s imports of merchandise and commercial services from the U.S. and Europe. And that IP holders and those with links to customers often make the money,“ he said.

“Asia’s exports and off shoring revenues are often in politically salient industries and activities, displacing politically active workers.”

Michael Enright pointed out that the rest of the world gains as well as loses. But it is just the losses that tend to be highlighted in the press and in the analysts reports.

“The real issue is the pressures that these forces exert within economies and the inefficiencies they point out,” he said.

“We have to recognize that competition from Asia, and competition in general, will get tougher. We need to understand that the threat and opportunity associated with Asia’s rise varies by cluster, by industry, and by activity within industry. Some local clusters, industries, activities will win, some will lose.”

“We also need to understand where the race will be to the top, the bottom, or to the market segments. Optimizing within local cluster efficiencies is essential, but might not be enough. We need to think of regional production patterns as well as markets. And perhaps we need to rethink, and either reaffirm or revise traditional systems.”

“ We need to find ways to promote positive engagement with a rising Asia today,” he concluded.

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