Implementation of economic strategy a key role for leaders: IMD

The International Institute for Management Development (IMD) said a country’s economic strategy must be formulated from the top down while investment in education is worthwhile even though results may take time and accountability is crucial for the reform of any educational system. 

In an exclusive interview with the Nation, Professor Arturo Bris, director of the IMD World Competitiveness Center, said a country’s strategy is the responsibility of its political leaders and this strategy must be clear and inclusive while the most challenging thing is its implementation process, not its formulation process.

“The formulation of a clear strategy is probably the easiest part and certainly implementation would be more difficult but strategy must be formulated top down. It is not something that can be delegated and it is the responsibility of the political leader, yet, it is not something that can be developed in isolation,” he said.

“This is true not only for politicians but all executives and anybody in a leadership position. A strategy is something that you develop by listening to the main stakeholders. It involves a lot of listening, getting to know the problems, and making decisions by not jumping to a decision out of the blue while at the same time trying to involve all of the parties that are going to suffer and enjoy from those decisions,” he added. 

A clear strategy to increase competitiveness must exploit the country’s uniqueness and Professor Bris said that Thailand’s main advantage is its geographical location, as it is in the middle of the Southeast Asia region, which means the country can serve as a hub for share businesses and the Kingdom also has a well-diversified export sector that is not focused on just one product,  a major driver of competitiveness.

He explained that another advantage of Thailand is its ability to be the first among other Southeast Asian economies to offer services in a very competitive way such as its leading position in tourism, financial services, and support services to exporting industries.

“The largest percentage of Thailand’s GDP [gross domestic product] comes from the service industries and that is the strength that has given the country a competitive advantage over neighbouring economies,” he said.

Anne-France Borgeaud Pierazzi, senior economist and head of IMD World Competitiveness Center, said that as Thailand has achieve a well-diversified line of export products, the next step in the development of the export sector should be to expand its network of partners outside Asia, as most of its partners are within the region.

She also said that the country needed to increase its investment on research and development to raise its overall competitiveness, as its expenditure on R&D is low by international comparisons. She said she is glad to see that the new government has such a vision and mindset.

The new government plans to increase the country’s R&D expenditure to 1 per cent of GDP from the current level of around 0.25 per cent.

In terms of education, Professor Bris said the two main issues behind success in educational reform is accountability, which involves the creation of a system where the outcome of education becomes a key performance indicator in order to allow the country’s educational system to improve. 

“Education is one of the sectors where public management is crucial, as public management is usually not based on incentive,” he said.

Financing is also important, as the more money the public sector spends on education, the faster it develops and generally speaking there is a strong correlation between how much money is spent on education and the outcome of the educational system.

Pierazzi said “it is difficult for some countries to look at the long-term but investment in education is very worthwhile and it is the one of the main drivers of competitiveness besides innovation. Thailand should start to improve its educational system from the secondary level or as earlier as possible.”