The Competitive Advantage of Nations: A Successful Experience, Realigning the Strategy to Transform the Economic and Social Development of the Basque Country

Abstract

Why do the new economy and welfare societies recommend a new station on the long journey towards competitiveness initiated within the framework of “The Competitive Advantage of Nations”, published as long as 25 years ago? A little more than twenty-five years ago, the Basque Country decided to equip itself with its own development strategy, undertaking to meet the challenge of designing its own future. The Basque Country aspired to give itself the maximum degree of self-government as a nation without a State, following its release from a long dictatorship which had plunged it into autarchy and isolation from the Western democracies around it, limiting its ability and responsibility to shape its own destiny and to offer its Society the highest standards of welfare, facing one of the greatest economic, political and social crises of its history and suffering from the ravages of terrorism within an economy castigated by soaring unemployment above 25%, a drop in its GDP, the fall, like dominoes, of its key industrial sectors, locked into the monoculture of the steel and metal working industry, outside the Europe which was being constructed by the then Economic Community of the Six, marginalized as a peripheral area from the future axis and development of the so-called “blue banana” of the London-Milan backbone and with an incipient and inexperienced administration, full of youth and enthusiasm, and a business world undergoing conversion, learning to live with a trade union phenomenon that the former dictatorship had bypassed. Faced with this complex and exciting challenge, those of us who had the privilege of addressing the aforementioned proposal, interpreting (by means of our analyses, as well as the wish to make our desires and dreams come true) the main keys to explain the state of the world economy, the main trends of change and their foreseeable impact on the Basque economy (“What the world economy taught us”), began the task of defining what we call “A strategy for the modernization and internationalization of our economy and our Country” trying to give some meaning to the role expected of the new players (States, city-regions, provinces, etc.), a role in which our small Country, with features of a City-Region, a sub-national entity, an invertebrate area on the two sides of the Pyrenees, could assume the figure of co-protagonist and provide society with a prosperous future. We also needed the framework and tools desirable for tackling the success strategy. We identified the gap between the needs that would be generated by the new paradigms and the tools offered by the existing political-economic framework (contents, skills, potential developments), accompanied by our own Country-strategy, with special emphasis on the initiatives, factors and critical vectors our society would demand and its aspirations for well-being and development. Within this context, the Basque Government approached Michael E. Porter, his ideas and concepts of the moment, and we began a collaborative process (which lasts until this day), constructing much more than our “Competitive Advantage of the Basque Country” in a thrilling and unfinished “Journey towards Competitiveness and Prosperity”. The Basque Country enjoys the privilege of having been the first nation to apply, in a strategic and comprehensive manner, the concepts which, a few years later, came to light in the prestigious publication we celebrate today, titled “The Competitive Advantage of Nations”, which has inspired the design of numerous policies and strategies throughout the world, which has brought about a proliferation of followers, which has trained instructors and which has generated a large number of new researchers and academics, new policy makers, new instruments for competitiveness and extraordinary levels of prosperity throughout the world. Since then, we have shared our own particular project which, alive and changing, responds to the new economic and social challenges and conflicts by constructing and applying a Country strategy with distinctive achievements and results beyond our economic environment. It lies within the conceptual framework inspired by the complementary tripod of Michael E. Porter's conceptual movement in his Competitive Advantage (Competitiveness, Shared Value Initiative and Social Progress) and our contributions learned from day to day in keeping with our vocation, identity, will and commitment. It is a never-ending process based on a model and a way of understanding the former pledge to give ourselves a single strategy designed by and for people.