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THE DISAPPERANCE OF CLASSICAL
COMPARATIVE ADVANTAGE : CUBA OF THE FUTURE
Por Manuel Cereijo
The classicaltheory of comparative advantage was developed to explain
the geographic location of industry in the 19th and 20th century. In
this theory, location of production depended upon two factors-natural
resource endowments and factor proportions., that is, the relative
abundance of capital and labor. Those with good soil, climate, and
rainfall specialize in agricultural production; those with oil supply
oil.
Countries that were capital-rich made capital-intensive products, while
countries that were labor-rich made labor-intensive products.In the 19th
century and for most of the 20th century, the theory of comparative
advantage explained what needed to be explained.
Consider the list of the twelve largest companies in the United States
on January 1, 1900. Only one of these companies exist today-General
Electric. Capitalism is a process of creative destruction whereby
dynamic new small companies are continually replacing old large ones
that have not been able to adjust to new conditions.
Natural resource endowments have fallen out of the competitive equation.
Modern products simply use fewer natural resources. Bridges and cars
have fewer tons of steel embedded in them, and devices such as the
computer use almost no natural resources . Modern transportation costs
have created a world where resources can be cheaply moved to wherever
they are needed.
Today knowledge and skills now stand alone as the only source of
comparative advantage. They have become the key ingredient in the
location of economic activity. Being the low-cost producer is partly a
matter of wages, but to a much greater extent it is a matter of becoming
the masters of process technologies, having the skills and knowing how
to put new things together, and the ability to manage the production
processes.
To be masters of process technologies a successful business must be
managed so that there is a seamless web among invention, design,
manufacturing, sales, logistics, and services that competitors cannot
match. The industries of the future have to be invented. They just don't
exist. In the era ahead, countries have to make the investments in
knowledge and skills that wil create a set of man-made brainpower
industries that will allow their citizens to have high-wages and a high
standard of living.
In an era of man-made brainpower industries, the global economy is a
dynamic one always in transition. If a firm or country wants to stay at
the leading edge of technology it must be a participant in the
evolutionary progress of man-made brainpower industries so that it is in
the right position to take advantage of the technical and economic jumps
that occasionally arise.
Today, the ascendant nations and corporations are masters not of land
and material resources but of ideas and technologies. The global network
of telecommunications carries more valuable goods than all the world's
supertankers.
Today, wealth comes not to the rulers of slave labor but to the
liberators of human creativity, not to the conquerors of land but to the
emancipators of mind.
The technological and industrial development in the transitional and
stable democratic Cuba will be based in four critical factors:
1. Talent (people)
2. Technology (ideas)
3. Capital (resources)
4. Know-How (knowledge)
We will need to create business incubators, as an innovative approach to
economic development. It will link public sector initiaves and private
sector investments to spur economic growth and technological
diversification. The primary driver of technology-based new business
venture in Cuba will be neither the availability of funds nor the rate
of technological advance. It will be the Cuban entrepreneur. The
incubator will be a significant link between the entrepreneur and the
commercialization of his product or service.
Hand with hand with incubation centers and industrial development is the
manufacturing park. To assist in the economic development and
reconstruction of Cuba, we need to promote the creation of manufacturing
technology parks.
These parks will be composed of clusters of small, medium, and large
manufacturing companies, located through out the country, and built by
the private sector. A typical manufacturing park should be of
approximately 150 Hectares. Some of the components of the parks must be:
manufacturing companies, a hotel, a conference center, and amenities,
such as restaurants, lounges, meeting rooms, etc.
The ideal situation will be that the smaller companies located in the
park will act as suppliers of the larger ones. This way, the large ones
will operate under "zero inventory", reducing production costs and
making their products more competitive in the global economy. Industrial
parks and incubation centers will will constitute the core of "regional
development" in Cuba |
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INFOCUBA
