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Emerald Group Publishing Limited
Copyright © 2008, Emerald Group Publishing Limited
Article Type: Competitive horizon From: Strategic Direction, Volume 24, Issue 5.
Hong Kong retains its summit position
For the 14th successive year, the Heritage Foundation has ranked Hong Kong as the world’s freest economy. In its 2008 Index of Economic Freedom study, the organization rated Hong Kong highly in virtually all of the ten individual factors assessed. Hong Kong was first in trade freedom, investment freedom, financial freedom and property rights, and made the top ten in government size, fiscal freedom, labor freedom and monetary freedom. The report, as published by www.China.org.cn, also compliments Hong Kong on the simplicity of its business regulations, its flexible labor market, competitive tax rates and investment opportunities. Clarity surrounding regulation of its financial services and banking sectors was likewise noted, as was safeguarding of property rights by an independent judiciary. Singapore came second in the study of 157 economies around the globe, and Ireland third. A higher rating than Hong Kong in business freedom, monetary freedom, labor freedom, government size and freedom from corruption helped secure Singapore the runner-up spot. Ireland’s low levels of taxation and government spending relative to output were mostly responsible for its final ranking.
Five year hitch
A report published by Swiss Info (www.swissinfo.ch) has revealed that half the new businesses started in Switzerland fail within a few years. Data from the Federal Statistics Office show that over 80 percent of firms starting up between 2000 and 2004 survived their initial year but only 49 percent were still around five years later. The report suggests companies that succeed focus less on their product or technology and more on meeting customer needs. Doing enough initial research prior to start up is imperative, according to academics at the country’s Gallen University. Poor financial planning and insufficient funds are among other reasons cited for failure. Analysts also believe that boredom or over-ambition can contribute to the figures. Some people have high expectations and often drift away when their aims are not fulfilled. The prospect of failure could also be linked to the amount of initial effort required to set the business up. For instance, statistics indicate that new ventures in construction and industrial sectors were more likely to still be around after five years than service industry start-ups such as insurance and computer science. While many service industries can be relatively simple to set up, higher levels of commitment and finance is needed to develop a manufacturing or construction firm. Data also indicates that companies employ more people the longer they remain in business and that this increase in the number of employees is greater within the construction and manufacturing sectors.
Asian countries fuel patent rise
The World Intellectual Property Organization notes that global patent applications are rising by around 4.7 percent each year. The USA is fuelling much of this increase but in leading Asian economies like China and South Korea applications are growing even faster. In the decade ending 2005, China saw an eight-fold growth in patent submissions while applications doubled in South Korea. China has now passed Europe in relation to the number of patents submitted. The European Patent Office (EPO) claims that soaring applications may see a global backlog of patents awaiting assessment and increase the worry that this might allow others to get similar ideas sanctioned first. In 2007, the backlog had already gained momentum and stood at 440,000 applications in Europe, 838,000 in Japan and 1.1 million in the US. In a report published by the Independent (www.independent-bangladesh.com), the EPO insists that increased collaboration between patent offices across Europe and with major international counterparts is needed in order to tackle this backlog effectively.
UK seeks to exploit EU links
According to a report published by Clearlybusiness (www.clearlybusiness.com), UK business could benefit further from the country’s close association with the European Union (EU). Government departments and business leaders are working jointly to identify additional opportunities within a region that already accounts for over 60 percent of the UK’s total trade. In 2006, this trade was worth around £150 billion. Providing goods and services to the EU already accounts for three million UK jobs and this figure will rise in the wake of new opportunities. The report claims that economic growth in the EU will reach 2.4 percent in 2008 and this will help create an additional five million jobs in the region by the following year.