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  Félix Peña

INTERNATIONAL TRADE RELATIONS NEWSLETTER
2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009
MANAGEMENT CAPACITY AND ITS IMPACT ON FOREIGN TRADE:
Three priority areas for the development of effective and successful strategies.

by Félix Peña
January 2015

English translation: Isabel Romero Carranza


 

The transformations that can be observed in global economic competition, if properly diagnosed, can mean favorable opportunities for the international insertion of a country such as Argentin, to project to the world goods and services that add to its many natural resources a dose of intelligence, technology and creativity. In this way positive effects can be generated on productive development, even together with other partner countries, with their ensuing impacts on the social sphere.

Hence the relevance of the question: what are the challenges to be faced by the future development of country strategies for productive insertion in the world? Without prejudice to other relevant factors, in this opportunity we will focus on management capacity. Past experience indicates that this has been the aspect with the most shortcomings in the history of Argentine foreign trade, especially in recent decades and in the perspective of SMEs seeking to internationalize their activities.

Based on Argentina's own experiences and on that of other countries with similar levels of development, we can identify three areas where it would be useful to introduce organizational and management improvements. These would help achieve greater efficiency in a future external commercial insertion, aimed at multiple and differentiated regional and inter-regional spaces simultaneously.

The three areas we are referring to relate to diagnostic capabilities, insertion in transnational production chains, and monitoring of international trade negotiations.

Some of the questions that arise may provide guidance for a necessary debate on the future of strategies, that are effective and successful, for the insertion of Argentina in world trade, both at the global level and regionally. It is a debate that requires an interdisciplinary approach and, in particular, can be developed with the active participation of representatives of all the sectors involved.

Such a debate, both at the national and at the provincial and local level, involving the participation of representatives and experts from the public sphere, the business world, the academia and other sectors of society, may prove quite opportune given the fact that this year the country will be preparing for a new government term.


In the coming years the development of Argentine foreign trade will have to adapt to the challenges and requirements of a complex and dynamic world, with many opportunities but also with a growing number of actors. (In this regard, refer to our analysis in previous Newsletters and especially to the August 2014 issue, and the October 2014 issue).

The transformations in global economic competition, if properly diagnosed, can mean favorable opportunities for the international insertion of a country such as Argentina, to help project to the world goods and services that add to its many natural resources a good dose of intelligence, technology and creativity. In this way, positive effects can be generated on productive development, even together with other partner countries, with the consequent impacts on the social sphere.

Hence the relevance of the question: what are the possible challenges to be faced in the future development of country strategies for productive insertion in the world? Without prejudice to other relevant factors, such as the qualities that may be achieved in terms of economic policies, including of course trade policies, and in terms of physical connectivity -both within the country and in the connection to the rest of the world, through the existing trade corridors or those that may be developed in the future and that are, certainly, more diverse and numerous tan they were a few years ago- this time we will focus on the aspect of management capacity. Past experience shows that this has been the aspect with the most shortcomings in the history of Argentine foreign trade, especially in recent decades and in the perspective of SMEs seeking to internationalize their activities steadily over time.

Based on Argentina's own experience and on the experience of other countries with similar development levels, we can identify three areas where it would be useful to try to introduce organizational and management improvements. They should help achieve greater efficiency in an external commercial insertion aimed, in the future, at multiple and differentiated regional and inter-regional spaces simultaneously.

These are areas of particular importance for the internationalization of SMEs including, of course, the need to train cadres who can assist in the preparation and development of strategies to project to the world their ability to produce goods and provide services, especially those that are valued by a localized demand in very different economic, political and cultural settings. (In this regard, see the August 2013 issue of this Newsletter , as well as the June 2014 issue).

These aspects refer to diagnostic capacities, and to the capabilities for the insertion in transnational productive chains and for monitoring international trade negotiations

The diagnostic capability is a key area, given the fact that the productive and social development of the country is now inserted, as was noted at the beginning, in a global and regional context of strong dynamics and profound structural changes. Detecting these, through the timely identification of facts and trends that may affect the shifts in competitive advantages, in favor or against the interests of the country, is a key factor for achieving an effective international integration.

Some questions aimed at improving diagnostic capabilities include:

  • How to follow the dynamics of opportunities in a rapidly changing world?
  • How to generate competitive intelligence that is relevant and accessible to all in order to enter and remain in the very different national and regional markets?
  • How to easily access the information accumulated by the commercial diplomacy of the country?
  • How to take advantage of the Argentine residents abroad, or those who travel for extended periods of time, as sources of information on cultural factors that influence the differentiation of values and preferences of consumers in different regions of the world?
  • How to process information that is relevant to companies trying to project themselves to the world in a sustained manner, in order to translate it into practical strategies and actions?
  • How to share competitive intelligence efforts with institutions in other countries, especially in the same region?
  • How to join efforts in terms of diagnosis between the public, business, social and academic sectors?

Regarding the ability to insert businesses in transnational production chains, both of global and regional scope, it would be important to be clear on what kind of public-business-academia synergies could be more advisable to promote a sustained participation of companies from the country and, in particular, of SMEs.

Some questions that would need to be answered in order to achieve an efficient country strategy in this aspect are:

  • How to build internal, regional and global production networks and use them to add value to what is projected to world markets?
  • How to create conditions to attract the location in the country of global and regional value chains that generate a greater impact on productive employment and technological innovation?
  • How to identify effective channels to project to the world what Argentines know or can produce and how to scale with higher added value within each different channel?
  • How to combine efforts between the public, business, social and academic sectors for the insertion into transnational production chains?

And finally, regarding the ability to monitor international trade negotiations that may have, once concluded, an impact on the layout and development of strategies for projection into the world of the productive and technological capabilities of domestic firms, the relevant questions to be answered would be:

  • How to get organized in order to monitor and understand the dynamics of the map of cross-linked international trade negotiations (multilateral, interregional and regional)?
  • How to assess their impact on the country's external trade integration, both in the case of those in which it participates and also of those where it does not take part?
  • How to achieve the articulation of business interests -both offensive and defensive- with the monitoring of trade negotiations and in the definition and execution of negotiating strategies?
  • How to ensure transparency and participation of all social sectors, including local, provincial and regional economies, SMEs, trade unions and NGOs, in the monitoring of trade negotiations in which the country participates?
  • How to get prepared for taking full advantage of the results of trade negotiations once they are concluded?

Some of the questions that have been raised in the preceding paragraphs may provide guidance for a necessary debate on future strategies that are effective and successful for the insertion of Argentina in world trade, both at the global level and regionally.

It is a debate that requires an interdisciplinary approach and that needs to include the active participation of representatives from all the sectors involved. A debate at national, provincial and local level, involving representatives and experts from the public sphere, the business and other social sectors, and the academia, may be most opportune given the fact that in 2015 the country will be preparing for a new government term.



Recommended Reading:


  • Albertoni Gómez, Nicolás, "Instrucciones para Inventar la Rueda. Qué tienen los países que progresan y cómo aplicarlo a Uruguay", Prólogo de Enrique V. Iglesias, Taurus - Pensamiento, Montevideo 2014.
  • Bitar, Sergio, "América Latina en el nuevo sistema mundial", en "Archivos del Presente", Año 17, Número 64, Buenos Aires 2014, ps. 71 a 90.
  • Comini, Nicolás; Bontempo, Tomás (compiladores), "De Cadencias y Disonancias. Representaciones alternativas de la integración regional en el siglo XXI: América Latina, Asia y Europa del Este", Ediciones Universidad del Salvador, Buenos Aires 2014.
  • Crivelli, Julio César, "La Emergencia Económica Permanente", Editorial Ábaco de Rodolfo Depalma, Buenos Aires 2001.
  • Diakantoni, Antonia; Escaith, Hubert, "Trade in Tasks, Tariff Policies and Effective Protection Rates", World Trade Organization, Economic Research and Statistics Division, Staff Working Paper ERSD-2014-22, Geneva, December 2014, http://wto.org/.
  • Figes, Orlando, "El baile de Natacha. Una historia cultural rusa", Ensayo Edhasa, Barcelona - Buenos Aires 2012.
  • Fundación Foro del Sur, "Archivos del Presente", Año 17, Número 64, Buenos Aires 2014.
  • Funes, Patricia, "Historia mínima de las ideas políticas en América Latina. Un recorrido por las ideas, las corrientes, los pensadores y los líderes de la historia intelectual latinoamericana", El Colegio de México - Turner, Madrid - México 2014.
  • Kaplan, Robert D., "The Coming Anarchy. Shattering the Dreams of the Post Cold War", Vintage Books, New York 2001.
  • Lafer, Celso, "El pensamiento de Helio Jaguaribe", en "Archivos del Presente", Año 17, Número 64, Buenos Aires 2014, ps. 105 a 116.
  • Larrique, Daniel, "Atahualpa. Memoria de un Dios", Edhasa, Buenos Aires 2014.
  • Luce, Edward, "In Spite of the Gods. The Rise of Modern India", Anchor Books - Random House, New York 2012.
  • Magris, Claudio, "El Danubio", Anagrama - Colección Impactos, Barcelona 1997.
  • Paradiso, José; Comini, Nicolás, "El otro realismo", en "Archivos del Presente", Año 17, Número 64, Buenos Aires 2014, ps. 63 a 70.
  • Rentzhog, Magnus; Anér, Emilie, "The New Services Era - Is GATS up to the Task", The E15 Initiative "Strengthening the Global Trade System", ICTSD - World Economic Forum, Overview Paper, Geneva, November 2014, http://e15initiative.org/.
  • Wolpert, Stanley, "Gandhi", Folio - La Nación, Buenos Aires 2003.
  • Zeldin, Theodore, "Conversation. How talk can change our lives", HiddenSpring, Mahwah, NJ. 2000.
  • Zerka, Pawel (ed.); Cristini, Marcela; Bermúdez, Guillermo, "The Political Economy of EU-LAC Relations After the 2008 Crisis", demos Europa - Fundación de Investigaciones Económicas Latinoamericanas (FIEL), EU-LAC Foundation, Hamburg 2014, http://eulacfoundation.org/.

Félix Peña Director of the Institute of International Trade at the ICBC Foundation. Director of the Masters Degree in International Trade Relations at Tres de Febrero National University (UNTREF). Member of the Executive Committee of the Argentine Council for International Relations (CARI). Member of the Evian Group Brains Trust. More information.

http://www.felixpena.com.ar | info@felixpena.com.ar


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