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Continued Commitment to Inter-American Competitiveness Pledged at Santiago Forum

For three days in September, leaders from throughout the Western Hemisphere met in Santiago, Chile, for the third annual Americas Competitiveness Forum. The leaders explored new ideas and exchanged best practices in hopes of increasing prosperity among the region’s economies.

by Susan Hupka

Senior officials from throughout the Western Hemisphere met in Santiago, Chile, on September 27–29, 2009, to participate in the third annual Americas Competitiveness Forum (ACF). Secretary of Commerce Gary Locke and Chilean Minister of Economy Hugo Lavados Montes presided over the forum’s opening ceremony. They were joined by Chilean President Michelle Bachelet and Guatemalan President Álvaro Colom.

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Leaders at the Americas Competitiveness Forum in Santiago, Chile, included (L to R) Pier Carlo Padoan, deputy secretary general of the Corporación Andina de Fomento; Alicia Bárcena Ibarra, executive secretary of the Economic Commission for Latin America and the Caribbean; Álvaro Colom, president of Guatemala; Luciano Coutinho, president of the Brazilian Development Bank; Gary Locke, U.S, secretary of commerce; Michelle Bachelet, president of Chile; Hugo Lavados Montes, Chilean minister of economy; and Mariano Fernandez, Chilean minister of foreign affairs. (U.S. Department of Commerce photo)
Leaders at the Americas Competitiveness Forum in Santiago, Chile, included (L to R) Pier Carlo Padoan, deputy secretary general of the Corporación Andina de Fomento; Alicia Bárcena Ibarra, executive secretary of the Economic Commission for Latin America and the Caribbean; Álvaro Colom, president of Guatemala; Luciano Coutinho, president of the Brazilian Development Bank; Gary Locke, U.S. secretary of commerce; Michelle Bachelet, president of Chile; Hugo Lavados Montes, Chilean minister of economy; and Mariano Fernandez, Chilean minister of foreign affairs. (U.S. Department of Commerce photo)

 

This ACF meeting was the first one held outside of the United States. It brought together representatives from 27 of the 34 democratically elected governments in the Western Hemisphere, along with prominent leaders from the private sector, academia, and non-governmental organizations. Business delegations from California, Georgia, and Mississippi, as well as government delegations from the city of Atlanta and Puerto Rico, also attended.

Innovation a Key Factor

A key theme of this year’s forum was the role that innovation plays in spurring economic growth and competitiveness. Measures of competitiveness draw on many factors, including institutions, infrastructure, education, market efficiency, and innovation, among others. During the forum, panels of experts shed light on the complex roles the various factors play in enhancing the competitiveness of the private sector.

One of the speakers at the forum, John Kao, chair of the Institute for Large Scale Innovation in San Francisco, California, discussed what innovation is and why it is important. “Innovation is the set of muscles by which societies progress, nourish their prosperity, and maintain their security,” said Kao. He pointed out that economic downturns are often the background for major periods of progress and noted that in his hometown of Silicon Valley, California, “many of the innovation engines for economic progress and growth are being incubated right now.”

Protectionism Not the Answer

The impact of the global slowdown was a recurring theme at the forum and the focus of several sessions. In his opening remarks, Locke noted, “In challenging economic times like these, some inevitably succumb to the allure of turning inward and closing off markets.” He emphasized that protectionism does not work: “Protectionist policies invite trade wars and reduce living standards for us all.”

Locke also emphasized that free-market economies are the best alternative available and the most likely to produce much-needed innovation. He pointed to the Apple iPhone—which was conceived and designed in the United States—as a platform for innovation. He also mentioned a software developer in Brazil who was one of the first individuals to develop profitable applications for the iPhone and iPod Touch. “This is the promise of market-based economies,” Locke said. “In a market-based society, a 24-year-old Brazilian with little previous business experience can innovate and cooperate alongside the likes of Apple.”

Corporate Social Responsibility

Another issue raised at the forum was corporate social responsibility. Similar to innovation, corporate social responsibility can have a positive influence on companies’ competitiveness by enhancing brand image; by building loyalty among customers, employees, partners, and suppliers; and by reducing the cost of capital. It can also improve people’s lives, such as with the McDonald’s Corporation’s Ronald McDonald House, 3M’s Community Giving, and many other programs from U.S. companies operating throughout Latin America.

In an article published on the eve of the forum, Locke highlighted the positive role that the U.S. business community plays in the economic development of the Americas. “The rise of socially responsible business and increasing consumer expectations are changing the basic tenets of doing business,” said Locke. “Businesses are gaining a competitive edge by harnessing the entrepreneurial spirit of the private sector to solve social challenges” (see sidebar).

On September 28, Locke underscored the contribution of U.S. companies to the Chilean economy when he met with a group of entrepreneurs who have benefited from programs offered by the Cisco Entrepreneur Institute. Through its three locations in Chile, the institute has helped more than 800 Chileans employed by small and medium-sized enterprises to improve their business skills and to learn how to better use information technology. In delivering this training, Cisco successfully partnered with the Chilean government and with local learning centers.

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U.S. representatives at a bilateral session with Peru at the Americas Competitiveness Forum in Santiago, Chile, included (back row, L to R) Matthew Rooney, director for economic policy at the Department of State, and, from the Department of Commerce: Walter Bastian, deputy assistant secretary for the Western Hemisphere; Francisco Sanchez, senior adviser; Gary Locke, secretary of commerce; Michelle O’Neill, acting under secretary for international trade; and Kristen Mann, trade specialist. (U.S. Department of Commerce photo)
U.S. representatives at a bilateral session with Peru at the Americas Competitiveness Forum in Santiago, Chile, included (back row, L to R) Matthew Rooney, director for economic policy at the Department of State, and, from the Department of Commerce: Walter Bastian, deputy assistant secretary for the Western Hemisphere; Francisco Sanchez, senior adviser; Gary Locke, secretary of commerce; Michelle O’Neill, acting under secretary for international trade; and Kristen Mann, trade specialist. (U.S. Department of Commerce photo)

 

Ongoing Role of Competitiveness Councils

For the second year, regional competitiveness councils, which are mostly organized by the government with a few from the private sector, met at the forum. The councils work on a continuing basis to enhance competiveness at the national level.

This year, with support from the Organization of American States, the competitiveness councils expressed their intention to form a hemispheric network that will meet on an annual basis during future gatherings of the ACF. The network will serve as a forum for sharing best practices among its members and as a resource for creating programs for the ACF.

Atlanta in 2010

On the final day, Atlanta Mayor Shirley Franklin and Minister Lavados joined Locke to announce that the fourth ACF will be held in Atlanta, Georgia, in the fall of 2010. All three officials highlighted the unique role the forum plays in facilitating a public–private dialogue that spans the Western Hemisphere. Preparations are already under way for the 2010 gathering. It promises to continue the tradition of innovative discussion that is already facilitating the competitiveness and prosperity of the Americas.

Susan Hupka is an international trade specialist with the Market Access and Compliance unit of the International Trade Administration.

 

 

“Trade can indeed make society better off”

In a supplement to the Chilean business paper, El Diario Financiero, that was published on the eve of the third annual Americas Competitiveness Forum, a message from Secretary of Commerce Gary Locke highlighted the positive role that the U.S. business community plays in the economic development of the Americas. Materials prepared by the local American Chamber of Commerce that highlighted examples of U.S. companies’ corporate social responsibility programs and their contribution to the economic and social prosperity of Chile accompanied Locke’s comments. Here is an excerpt of Locke’s remarks:

As trade relations between the United States and Chile have deepened, so too have partnerships between U.S. companies and the communities in which they do business. Free trade promotes competitiveness and leads to innovation in products and business processes. Yet with more opportunity comes increased visibility and higher expectations. Many consumers are now not only asking about price and quality, but also about how products are made and how they impact the environment and the communities in which they are produced. The rise of socially responsible business and increasing consumer expectations are changing the basic tenets of doing business. Businesses are gaining a competitive edge by harnessing the entrepreneurial spirit of the private sector to solve social challenges. I am proud to see so many examples of U.S. companies partnering with Chilean organizations to be on the forefront of this movement.

Socially responsible firms invest in infrastructure, health, education, and workforce and community development programs, understanding that their own success is enhanced by a healthy and prosperous workforce and marketplace. Companies that incorporate respect and fairness into their daily operations transfer those principles to every business stakeholder, including consumers, workers, communities, suppliers, distributors, management, and the environment. By promulgating these values, socially responsible businesses do more than just offer competitive goods and services; they contribute to increased prosperity and living standards throughout the world. As we see with the U.S.–Chile [free trade agreement] relationship, trade can indeed make society better off, especially when that trade boosts environmental stewardship, worker rights, and accountability.