Clusters and the new economics of competition

Economic geography in an era of global competition poses a paradox. In theory, location should no longer be a source of competitive advantage. Open global markets, rapid transportation, and high-speed communications should allow any company to source any thing from any place at any time. But in practice, Michael Porter demonstrates, location remains central to competition. Today's economic map of the world is characterized by what Porter calls clusters: critical masses in one place of linked industries and institutions--from suppliers to universities to government agencies--that enjoy unusual competitive success in a particular field. The most famous example are found in Silicon Valley and Hollywood, but clusters dot the world's landscape. Porter explains how clusters affect competition in three broad ways: first, by increasing the productivity of companies based in the area; second, by driving the direction and pace of innovation; and third, by stimulating the formation of new businesses within the cluster. Geographic, cultural, and institutional proximity provides companies with special access, closer relationships, better information, powerful incentives, and other advantages that are difficult to tap from a distance. The more complex, knowledge-based, and dynamic the world economy becomes, the more this is true. Competitive advantage lies increasingly in local things--knowledge, relationships, and motivation--that distant rivals cannot replicate. Porter challenges the conventional wisdom about how companies should be configured, how institutions such as universities can contribute to competitive success, and how governments can promote economic development and prosperity.     

Simple search methods for finding a Nash equilibrium

We present two simple search methods for computing a sample Nash equilibrium in a normal-form game: one for 2-player games and one for n-player games. Both algorithms bias the search towards supports that are small and balanced, and employ a backtracking procedure to efficiently explore these supports. Making use of a new comprehensive testbed, we test these algorithms on many classes of games, and show that they perform well against the state of the art—the Lemke–Howson algorithm for 2-player games, and Simplicial Subdivision and Govindan–Wilson for n-player games.     

Anticipating the future high-tech competitiveness of nations: Indicators for twenty-eight countries

This article presents some of the major results obtained during the third phase of a continuing research effort to develop and implement national indicators of competitiveness in high technology industries. The first phase, begun in 1987, developed a conceptual model of the processes by which industrializing nations gain access to external technology and technical information, absorb that technology/information effectively, and institutionalize a science-based development and manufacturing capability leading to export-led growth in high technology products. Four “input” or leading indicators of a nation's future capacity (15-year time horizons) to compete in international markets in high technology products were developed, as were three “output” indicators of a nation's current international competitiveness. During this first phase, the seven indicators were applied to data for twenty countries representing a range of regions and extent of industrialization. The second phase used 1990 data on an expanded set of countries to examine in detail the indicators' reliability and validity. The third phase of indicators work (1992–1995): (1) developed seven indicators whose definitions were recommended in our 1991 final report to the Science Indicators Unit of the National Science Foundation, and (2) collected the necessary data (1993) and applied them to generate a set of indicators for 28 countries using these recommended formulations.This article focuses on the input indicators for the 28 countries and compares these 1993 results with those from 1990. We discuss the implications of these results for technology-based development theory and for development policy. A separate, companion article published elsewhere presents the output indicator results.     

War games: using MRP (material requirements planning) audits to pinpoint problems and keep the competitive edge

In today's world, it is a challenge just to stay in business, let alone remain competitive in a specific industry. We will show you how to pinpoint MRP II problems and attack them through self-assessment audits. You will discover the secrets of breaking down barriers between Master Schedulers, Material Planners, Production Control Planners, and the Manufacturing Line. Self-assessment audits are one way to take care of your planning functions before outside auditors take care of them for you.     

Virtual companies reconsidered

An important recent report recommends the creation of 'rirtual companies'-companies formed from electronically linked workers who rfmain employees o f their regular firms . This paper criticizes that model, instead suggesting that uirtual companies have their o m employees. The assessment of the implications of both ppes of virtual compay points to the need for majar national poliy changes with respect to employment practices and mechanisms to conty wealth to people.     

Mutual fund managers: Does longevity imply expertise?

We analyze the performance of 1,042 mutual funds from 1986 to 1995 to measure the relationship between manager tenure and performance. Funds whose managers' have at least ten years tenure do not generate significantly higher excess returns than funds with less experienced managers. The excess returns of the best managers are not greater than those of their less experienced colleagues. Regardless of tenure, managers producing positive risk adjusted returns for three years are not likely to repeat their performance in subsequent periods. Our results provide further evidence that tenure should not be a factor in selecting mutual funds.     

Information Effects in Uniform Price Multi‐Unit Dutch Auctions

We design a multi‐unit descending‐price (Dutch) auction mechanism that has applications for resource allocation and pricing problems. We address specific auction design choices by theoretically and experimentally determining optimal information disclosure along two dimensions. Bidders are either informed of the number of bidders in the auction, or know that it is one of two possible sizes; they also either know the number of units remaining for sale or are unaware of how many units have been taken by other bidders. We find that revealing group size decreases bids, and therefore revenue, if units remaining are not shown. When group size is unknown the price also falls if the number of units remaining is revealed. The most efficient and largest revenue outcome occurs when bidders are not provided information on either group size or units remaining. These laboratory results conform to some directional predictions from our theory, although overbidding is common.     

Profiling leading scientists in nanobiomedical science: interdisciplinarity and potential leading indicators of research directions

Nanobiomedical science is a promising area in the application of nanotechnology. This paper profiles a group of 21 leading scientists in nanobiomedicine based on high publication rate and high citations. Comparisons with other researchers indicate that the leaders publish more in high impact journals and collaborate more extensively (team science). They reside most heavily in the United States and Western Europe. We compare their research publications using multiple indicators–Integration, Specialization and a Multidisciplinary Index. Relations among interdisciplinarity indicators generated support a three‐factor model based on principles of diversity. We locate this research among the disciplines using science overlay mapping. Key term analyses, based on keywords and on natural language processing help profile the research emphases of these leading researchers. Such results could serve as leading indicators to help identify directions of future nanobio development.     

The Politics of Management in People's China: From CMRS to Modern Enterprise and Beyond

This study reviews and analyses the changes in management systems in the People's Republic of China over the last decade. Within the wider context of the Open Door policy, the modernization of industry and increased enterprise autonomy, the contract management responsibility system (CMRS) and, more recently, the modern enterprise system (MES) have been introduced. These both provide enterprises (and the managers within them) with a framework within which to practise. This analysis describes the CMRS and the IMES and then, on the basis of discussions and interviews with factory managers, and with officials responsible at the macro level for monitoring the itnplementation of policy, analyses the implications of the changes. The authors conclude that, despite the introduction of a degree of management discretion and independence, differences in opinion persist on what, precisely, are the current industrial problems, and therefore what to do to address them. There have, consequently, been mixed reports on the success or otherwise of both systems.