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06/11/2009
Like people of other
nations, Indonesians are also dreaming of having a
competitive nation of their own. However, it takes
not only an enormous of hard work and but also a
right attitude to realize a great dream. Alas, in
this respect Indonesians still have a lot to learn.
Case in point: the pervasive phobia of
neo-liberalism.
The prevailing understanding
of neo-liberalism among many Indonesians, from the
presidential candidates to layman, is almost identical
to that of neo-colonialism: the strong is exploiting the
weak inhumanly, and free market is just the modern
version of forced trading. Too many fail to recognize
the reality that we are currently living in the most
competitive era of the world’s history.
In almost all aspects of life,
success is determined by how competitive an entity is.
This is also true in the context of nations. In fact,
the current and future trends are clear: a more intense
competition among nations. Various global regulations
that have been intensively promoted during the last few
decades, from free trade to financial liberalization,
are all aimed at enhancing competition among nations.
Competition is believed will promote a higher economic
growth which, in turn, induces a better standard of
living.
And neo-liberalism is about
competition.
Studies have shown a positive
effect of competition on the economic growth. One strand
of studies considers firms as entities operating under
profit-maximizing behavior and examines the effect of
competition on their investments in technology. The
thesis is, a more intense competition stimulates
innovation; innovation creates efficiency; and
efficiency promotes higher economic grow.
Another strand examines the
effects of competition on efficiency. The thesis is,
less competition creates inefficiency. This idea is
motivated by the insights of Adam Smith who asserted
that monopoly, acquired not due to innovation, is a
great enemy to good management. In other words, free
market induces competition which, in turn, creates
efficiency.
Empirically, in an annual
study of competitiveness in 58 countries, where the
survey was drawn from more than 4,000 corporate and
other leaders, The Global Competitiveness Report 2000
found a positive effect of competition on income per
capita. Proxied by the antitrust policy, the
effectiveness of competition proves to be important in
explaining the international differences in income per
capita. The explanation is simple: the imperfect
competition found in regulated sectors tends to be
accompanied by inefficiency use of resources which, in
turn, lowers economic growth.
The economic activities that
produce competitive societies are socially embedded in
complex organizational contexts called firms. As Michael
Porter argues firms, not nations, that compete in the
global market. Faced with
unrelenting competition, firms are forced to innovate,
be more productive and more efficient, in order to
survive and successful. In other words, competitive
firms produce a competitive nation.
Thus, neo-liberalism is about
tough competition among firms.
But firms are a combination of
men, machine and management. All of these center on men.
That means it is men (people), not machines that
matter the most. This implies something more
fundamental: competitive firms are created by
competitive individuals. Microsoft is created by the
competitive Bill Gates and Paul Allen; Apple by Steve
Jobs; Amazon by Jeff Bezos.
True that competition will
leave some as losers. But, contrary to popular belief,
competition does not need to be brutal because real
competition teaches the competitors to respect for
themselves and their opponents. Competition also teaches
individuals to take responsibility for their actions.
And true competition recognizes a set of rules and
information which are accessible to all players.
This suggests that the winning
factor in competition is strategy and innovation. Almost
all needed is the art to compete by utilizing available
information about the strengths and the weaknesses of
the opponents as well as to compete with itself
(self-competition). As it turns out, a self-competition
is really significant for a success.
In an online discussion in
1996, one discussant asked Bill Gates the following,
“Would you still enjoy showing up for work if
competition for your company was scarce?” Gates replied,
“Even if there weren’t great companies to match with,
the thrill of self-competition would keep me coming to
the office.”
The success of Japanese firms
in the 70s and 80s was not due to their ability to
outperform foreign firms in the international markets,
rather due their ability to compete in the home market.
A study by Sakakibara and Porter found that, “Japanese
competitiveness is associated with home market
competition, not collusion, cartels, or government
intervention that stabilizes it.”
Building a winning nation
essentially begins from individuals, then progresses to
a broader entity: family, society and nation. It
demands spirit of competition from each individual, a
spirit that continuously equips themselves with
knowledge, strategy, and innovations. By understanding
this, individuals will likely be more creative,
innovative, hard-working, discipline and responsible:
competitive. And those competitive individuals are
likely to be found in a competitive environment.
Thus the imperative of today’s
world is that we must not only embrace the current and
future paradigm of success, be competitive, but also
seriously prepare our nation to win the future. The
stories of Samsung, Hyundai, and HSBC in the
international market, which have become testimonials to
the success of South Korea and Hong Kong, should warn us
that those who embrace the paradigm and prepare
themselves for a tough competition will likely be
victorious. In contrast, those who deny and reject the
paradigm, without giving a legitimate and convincing
alternative, will left behind.
As the old saying goes,
“adopt, adapt, and excel or be defeated!”
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