Mini book review - how countries Compete

"How Countries Compete" (ISBN-13: 978-1422110355, Author: Richard Vietor) in a nut shell is about how globalization has mde countries compete with each other for a given amout of money ("compete for market share of investments") and what should governments of countries do to make themselves competetive.

A manager's view of Globalization has both internal and external perspective. Internal perspective deals with the analysing the reasons to globalize and putting the internal structures in place to globalize. For internal perspective, I like Pankaj Ghemawat's articles, including the latest (HBR March 2007) article, "Managing Differences: The Central Challenge of Global Strategy". Books such as world is flat and mirage of global markets are mostly about those internal perspectives. The how countries compete book gives the external perspective of tools that a managers can use to analyze which countries are the best to invest. Make no mistake (i hate that phrase, but have no time to think about a better one), this book talks about what a government can do to make itself more competitive but the same logic and tools can be used by managers to analyze what countries to invest in. This book basically expands the "Role of Government" section in Porter's Competetive Advantage of Nations article.

The book starts with the strategy a country should choose to compete. That strategy depends on the context, its resources, its policital structure, the clusters etc. etc. Then it talks about the tools that the government has at hand (fiscal, monetary, trade, wage, infrastructure, legal, regulatory etc etc) to use to execute on its strategy.

The book then talks about half a dozen countries (Japan, Sigapore, China, India, Mexico, South Africa, Saudi Arabia, Russia, Italy), their history of competitiveness and how they got to the present stage (good and bad) with (or without) using the tools mentioned above.

The most important tool that I got out of this book is something called "trajectory". Based on how the government is using the above mentioned tools now, the author says, the managers can predict the trajectory of how the country is going to shape atleast in the near future (ofcourse there are always wars and such which can displace the trajectory) and the managers should make investment decisions accordingly.