????I am baffled by many Western politicians who continually blame low-cost imported goods for their own economic challenges. How many of these individuals would wish upon their hard-working constituents a rapid increase in the price of products ranging from televisions to tennis shoes? Like it or not, we are all hooked on the attractive prices of these imports, driven in part by the phenomenon of emerging markets.
????I believe the answer to this complex economic challenge lies in focusing on a troika of principles: education, innovation, and productivity.
????To its credit, China has far outpaced many Western nations by equipping its citizens with higher education, allowing them to accept new job responsibilities. An astounding 97% of Chinese students who enroll in the nation's colleges or universities go on to complete at least a Bachelor's Degree. In the U.S., just over half of enrolled students earn their diplomas, while most Western European nations have a completion rate around 40%. This ratio must improve.
????With regard to innovation, the playing field is somewhat more level across the global marketplace. Today's remarkable technologies are open to all for exploitation, but the winners will be those who think outside the box by listening to customers, collaborating, and delivering beyond expectations. China, for instance, has been evolving from being an imitator to a real innovator.
????This brings me to the final critical pillar of success for multinational companies – productivity. Many Western nations have made significant gains through automation and operational excellence, while emerging markets rely on ever-increasing numbers of workers. Each will improve their competitive position only by examining every element of operations to make existing resources more efficient, and to deliver real value at lower cost.
????The global "currency wars" are likely here to stay, due to the fine line between legitimate monetary balancing and sometimes self-serving trade manipulation. But these artificial mechanisms lack tangible or lasting value. The real competitive advantage will come to countries and companies who differentiate their offerings through education, innovation and productivity.
????Dinesh Paliwal, is the CEO, president and chairman of Harman International, a global manufacturer of audio and electronic equipment.
