Firdos Khan Pathan Roll No 21.docx

The Competitive Advantage of Nations The Competitive Advantage of Nations has made; that is beyond the scope of this special issue. But it aspires to indicate where specific lessons can be drawn or a direction for future research can be set. The first four articles in this special issue of Competitiveness Review deal with particular aspects of the fundamental concepts of Michael Porter’s book. The papers by Huggins and Izushi (2015) and Sölvell (2015) take different perspectives on the evolution of Porter’s thinking. Huggins and Izushi take more of an outside view, drawing on a collection of papers (Huggins and Izushi, 2011) to look at Porter’s work from the perspective of the broader literature in this field. Sölvell, who was a member of Porter’s original project team that provided the foundation for The Competitive Advantage of Nations, takes a more inside perspective, showing how the framework has deepened and expanded over time. The papers by Martin et al. (2015) and Aiginger and Vogel (2015) then aim to push the limits of Porter’s work, connecting it to two ideas that have gained prominence in the economic development literature. Martin et al. square Michael Porter’s work on industry clusters with Richard Florida’s approach of the “creative class” (Florida, 2002). Drawing on the existing body of literature on both approaches (Delgado et al., 2014; Florida, 2012; Florida et al., 2008; Martin Prosperity Institute, 2009; Porter, 1990, 2003), the authors empirically assess the interactions of industry agglomeration and skills on economic performance. Aiginger and Vogel (2015) explore the relation of Porter’s definition of competitiveness to new conceptualizations of economic performance that include additional aspects “beyond GDP”, an area in which Porter himself has recently gotten engaged (Social Progress Index, 2015). Using recent data for the EU-27, the authors measure a

broadened definition of competitiveness and examine the type of systematic relationship that exists between traditional and new elements. The final three papers look at the impact of Porter’s competitiveness framework in policy practice. The three case studies on Norway, Portugal and Central America report both on successful experiences as well as difficulties and challenges in the practical implementation of the concepts of The Competitive Advantage of Nations. In their paper entitled Theoretical and Methodological Advances in Cluster Research, Reve and Sasson (2015) trace the evolution and impact of a series of projects to raise Norway’s competitiveness led by Reve over the past three decades. They provide an account of the methodological evolution that took place, and share insights into the mobilization of key private and public actors that they identify as critical for the success of these efforts. In their paper Twenty Years after the Porter Report for Portugal, Goncalves et al. (2015) review the impact of a Porter-led project on Portuguese competitiveness (Porter, 1994) that was done a few years after the Competitive Advantage of Nations had been published. Unsurprisingly, given Portugal’s recent economic troubles, the author’s conclusions are mixed. The difficulties in moving from analysis to action are central, a theme that was also key to Michael Porter’s own critical assessment of the evolution of Portugal’s competitiveness evolution since his 1994 report (Porter, 2002). The final paper by Ketelhöhn et al. (2015) provides an example of a multicountry competitiveness effort in which Porter was a driving force. Here, a university-based institution proved to be a critical factor in enabling the implementation of actions. Exporting

Exports are the goods and services produced in one country and purchased by residents of another country. It doesn't matter what the good or service is. It doesn't matter how it is sent. It can be shipped, sent by email, or carried in personal luggage on a plane. If it is produced domestically and sold to someone in a foreign country, it is an export. Licensing A license or licence is an official permission or permit to do, use, or own something. A license can be granted by a party to another party as an element of an agreement between those parties. A shorthand definition of a license is "an authorization to use licensed material". Franchising If buying an existing business doesn't sound right for you but starting from scratch sounds a bit intimidating, you could be suited for franchise ownership. Just what is a franchise--and how do you know if you're cut out to be a franchisee? Essentially, a franchisee pays an initial fee and ongoing royalties to a franchisor; in return, the franchisee gains the use of a trademark, ongoing support from the franchisor, and the right to use the franchisor's system of doing business and sell its products or services. Counter trade Countertrade means exchanging goods or services which are paid for, in whole or part, with other goods or services, rather than with money. A monetary valuation can however be used in countertrade for accounting purposes. In dealings between sovereign states, the term bilateral trade is used. Exchange of goods or services directly for other goods or services without the use of money as means of purchase or payment.

Convertibility of rupees and its implication Convertibility of Rupee: For the first time, the Union Budget for 1992-93 has made the Indian rupee partially convertible. This was an inevitable move for the expeditious integration of Indian economy with that of the world In order to face the serious current account deficit in the balance of payments, the Government of India introduced the partial convertibility of rupee from March 1. 1992. Under this system, which remained in operation for a period of one year, 60 per cent of the exchange earnings were convertible in rupees at market determined exchange rate and the remaining 40 per cent earnings were convertible in rupees at the officially determined exchange rate. The term convertibility of a currency indicates that it can be freely converted into any other currency. Convertibility can also be identified as the removal of quantitative restrictions on trade and payments on current account. Convertibility establishes a system where the market place determines the rate of exchange through the free interplay of demand and supply forces. Current Account Convertibility: Meaning Current account convertibility is the next phase for attaining full convertibility of rupee. Current account convertibility relates to the removal of restrictions on payments relating to the international exchange of goals, services and factor incomes, while capital account convertibility refers to a similar liberalization of a country’s capital transactions such as loans and investment, both short term and long term. Current account convertibility has been defined as the freedom to buy or sell foreign exchange for the following international transactions:

(a) All payments due in connection with foreign trade, other current business, including services and normal short term banking and credit facilities; (b) Payments due as interest on loans and as net income from other investments; (c) Payments of moderate amount of amortization of loans or for depreciation of direct investment; and (d) Moderate remittances for family living expenses. Capital Account Convertibility: Meaning Capital account convertibility refers to a liberalization of a country’s capital transactions such as loans and investment, both short term and long term as well as speculative capital flows. In a way, capital account convertibility removes all the restrains on international flows on India’s capital account. There is a basic difference between current account convertibility and capital account convertibility. In the case of current account convertibility, it is important to have a transaction – importing and exporting of goods, buying and selling of services, inward or outward remittances, etc. involving payment or receipt of one currency against another currency. In the case of capital account convertibility, a currency can be converted into any other currency without any transaction. Current Status of Capital Account Convertibility (a) Capital account convertibility exists for foreign investors and Non-Resident Indians (NRIs) for undertaking direct and portfolio investment in India. (b) Indian investment abroad up to US $ 4 million is eligible for automatic approval by the RBI subject to certain conditions.

(c) In September 1995, the RBI appointed a special committee to process all applications involving Indian direct foreign investment abroad beyond US $ 4 million or those not qualifying for fast track clearance. Tara-pore Committee’s Second Report on Capital Account Convertibility (July 2006): With the growing strength of balance of payments in the post1991 period and with external sector remaining robust and gaining strength every year and the relative macro economic stability with high growth providing a conducive environment relaxation of capital controls, RBI, in pursuance of the announcement the Prime Minister constituted a committee on March 20, 2006 with Mr. S.S. Tarapore as its chairman for setting out a roadways towards fuller capital account convertibility. The committee submitted its Report to the RBI on July 31, 2006.