Phoenix metaphor. From
competitive advantage to cognitive advantages
Background
International trade benefits to the countries involved;
although there may be discrepancies
or reviews for losses and damages to some economic
agents, generally is better for all.
Theories have explained the
dynamics of international trade with different theories such as David Ricardo, referring to comparative advantage, then with theories that focus on the
nature and distribution of the factors, or the efficient use of factors with theory of competitive
advantage from Michael Porter.
Although nations are mentioned as
entities participating, it is
possible to adapt the concepts to
companies or organizations. Two
companies with access to natural
resources, located in the same
country or in different countries may find that by comparative advantage,
is more profitable to specialize and transact with each other. Similarly, when taking into
account productivity and through it,
competitiveness, they may be competing
transactions or anyway
one of them will have fewer opportunities or benefits.
Currently, if we focus on business, competitiveness is not an attribute
that explains or fully determines success, exist evidences from the
world of business showing that success
and market dominance no longer
lies in having the best production factors , the
highest level of efficiency or productivity, but in the ability to respond to the demand and requirements of a changing, volatile, interconnected market,
where are produce rapid and unpredictable changes in habits and requirements of consumers. The responsiveness is reflected in the speed, timing and location to give the consumers goods and services demanded.
Earlier, data and information to make decisions about
the goods or services were
in the business, could get regularly and easily, through surveys, report record
sales in subsidiaries. Of course, surveys and other means of data collection were limited, partial and only contained
what was significant for the
purpose of the survey. Today the data are real, timely, or what they really think consumers want and are
constantly updated, spontaneously
generated by the clients and are widely disseminated through the network of social media.
In the past, if the survey applied to 200 people, it sought to know the opinion about goods or service. Responses could be sincere or false, now what think or really want thousands or millions of consumers of a good or service is
broadcast on the network instantly,
the data is in the
cloud, and is winner who has access to it, having the technological tools and appropriate
analytical skills. It is the knowledge of the truth of the market that
determines the gain market dominance or the exclusion.
The paradigm of big data,
technology and nature of information
has changed the way of making decisions, evaluating the market,
to know and understand consumers.
We propose the model of the cognitive advantages, because in
relation to data and information,
and there are no limits
on the amount, no structures or patterns,
or time or origin, everything is open, ambiguous, information is
structured or unstructured knowledge
alone can overcome
the limitation of the structure and other fixed characteristics.
In this model we show two interesting
things: First, the
predominance of material factors production
and hand labor, capital,
natural resources is assumed by intangible
factors that can be created and are ubiquitous in indefinite
existence and location. Second, data, facts,
information, knowledge and all related
event happened that had business regarding the market are irrelevant, attention should be fixed in the future where exist
the action and actual and necessary
information, where everything must be built.
In this regard, we propose the metaphor
of the phoenix, a mythological spice capable of rebirth,
which should disappear before rise from the ashes. Only the enterprise phoenix tribute
takes place in the future, others will be left behind, unable to action or opportunities.
1 The basic models
The comparative advantages of nations
(David Ricardo) defined
trade and international relations at the
time when the first theories of economics were laid down. Trade benefits to countries or companies, the product increases when each country specializes in producing the good in which it has comparative advantage. For Krugman (2003, p. 11)
"A country have
a comparative advantage in producing a good
if the opportunity
cost of producing
that good in terms
of other goods
is lower in
that country than it is in other countries ... Trade
between two countries can benefit both countries
country benefit if each country exports
the goods in
which it has
a comparative advantage` ".
It is presented an illustrative example: South America produces roses while the USA produces computers,
specialization benefits both, but if
they decided they could produce
both in their own territories; the result would not be optimal; Americans have little chance of sending bouquets of roses
as the South Americans would know
just computers. Trade
is good because South America
has a comparative advantage in the roses,
EUU has them in
computers.
Paul Samuelson and
Ronald James developed
the specific factors model. Krugman
(2003, p. 39) states that
"Like the simplest Ricardian model, it
assumes that an
economy produces two
goods and that can
allocate its labor supply between the two
the industries. Unlike the Ricardian model, however,
the specific factors
model allows for the existence of factors
of production besides work. Whereas labor is
a mobile factor that can move between the industries, other
factors are assumed
to be specific. That is, they 'can only be
used in the direct
production of goods
"
In relation to this model, Krugman (2000, p.
52) identifies two key concepts, the production function that determines the amount of product obtained from a combination of capital and labor, as well as the relevance
of concepts such as marginal
productivity factors and the production
possibility frontier.
A country with a large amount of capital
and few natural resources, tend to produce goods with a high proportion of articles about
food, while a country with
many natural resources will do the reverse.
The concept of international trade
was improved range
and accuracy as the theory
evolves. To overcome some rigid assumptions in
the theory of comparative advantage, there is the
theory of factor proportions,
which soon proved insufficient to
explain the dynamics of trade.
In the Heckscher-Ohlin
emphasis is on how the factors in each country
and the proportions in which they will be used for the
production of goods interact. For
Krugman (2003, p. 67)
"Because the theory emphasizes the interplay
between the different proportions in which
factors of production are available in different
countries and the proportions in which
they are used in
producing different goods, it is also referred to as the factor-proportions theory ... That shows comparative
advantage is Influenced
by the interaction between nations' resources (the relative abundance of factors
of production) and
the technology of production (Which influences the relative intensity
with different which
factors of production are used in the production of different goods).
There are other contemporary models incorporate random elements, but
those along the lines of the previous models are based on what exists materially (productive
factors) but data or information in a way are static and
therefore its scope in a highly
dynamic world is limited and does not contribute to the understanding
of current market phenomena.
Michael Porter (1990)
in a new model in
which talk about the competitive advantages
of nations, states an important
fact: The prosperity of nations is created, not
inherited, does not flourish in a
gifted resource-rich country,
hand labor, and
other factors also plentiful, why,
says
"A nation's competitiveness depends on the capacity
of its industry to
innovate and upgrade. Companies gain advantage
against the world best’s competitors because of pressure
and challenge. They
benefit from having
strong domestic rivals,
aggressive home-based suppliers and demanding
local customers ... As the basis of competition has shifted
more and more
to knowledge creation
and assimilation of,
the role of the
nation has grown.
Competitive advantage is created and sustained trough a
highly localized process
(Porter, 1990, p.73)
Porter's competitive advantages are
defined in the context of globalization where borders become
blurred but the unity of nations
as actors interacting on the big stage, each plays
a role according to their
capabilities must be maintained,
We agree on the idea that prosperity must be built and that the concept of competitive advantage
is applicable to the company and nations; also in the
privileged role of knowledge as a
basis for innovation and
upgrading. But Porter did not apply yet the dynamism that information and knowledge should then with the
advent of phenomena such as cloud
computing, the concept of "big
data" and dynamism that have incorporated social networking market.
An important fact is
that the base or supports of each type of advantages increasingly less material, less concrete, less defined
Table
1 Traditional Models
|
Theory
|
Principle
|
Suport
|
|
Comparative
advantage (David Ricardo)
|
The country is specializing in producing
good with less cost, using more abundant and disposable resources
|
Tangible, no growth (territory) or slow as state of
technology. Without factor
mobility. Few data, internal
data source or external
|
|
Factor proportions (Heckscher-Ohlin)
|
Country specializes in producing at a lower cost,
|
Tangible, slower growth in production. Increased mobility of factors. Facts internal or external source
|
|
Specific factors
model (Samuelson-James)
|
Factors have specific use. Production function,
marginal productivity and frontier production
|
Tangible. Limitations of marginal productivity. Data from internal or external source
|
|
Competitive
advantages (Porter)
|
The country specializes in what it
produces at lower cost and with
the best combinations of factors.
Concept of productivity
|
Tangible, depends
on factors, but less and less material, the skill with which resources are used.
Freedom and movement of factors
(other than fixed assets), as borders diluted by globalization.
More data, internal and external sources, even strong structuring
|
Source: Author development, C.Rivas, August 2014
In all the above models, market data are accessories and often assumptions and projections are not necessarily reliable, but were enough to
make reasonable decisions. Currently this
is not possible. (1)
2 Model of cognitive advantages
The above models are
applicable to countries and companies, also the model presented is applicable in these levels; the difference is only of
magnitude or how the operations
are specified and decisions are made.
In essence, now sells
more and earn more who have
the most current data and the ability to process and to extract the signals that determine decisions,
The data varied little in the past, had a low
and predictable rate of growth,
therefore, the decisions of production of goods or services were well adjusted
to what the market expected. In the era of "big data", data growth is explosive not only in volume but in variety, value
(Big data attributes), therefore decisions must be approached differently. The data are
the determinants that make
decisions and adjust
to them; the company does not understand the dynamics into the market loses and
must inexorably retire.
Figure 1 illustrates this idea.
No decision on the production of goods or provision of services is taken if is not supported by facts and figures that show the characteristics of consumers (preferences, income, expectations
and related facts), but while traditional schemes are based on the past , and outdated data or
information for a world calm,
predictable and unchanging; in today's world, market information is not privileged or ownership of a business,
the information is not static, rapidly
changing nature, context and time
only those who have the ability to penetrate the dense cloud of data and extract with an
intelligent process, the desired information,
they can act and make appropriate
decisions.
The intelligent process, consider
the ability to enter cloud and extract information,
generating knowledge from the mass of
data available in this technological
scheme. For the National Observatory
for Telecommunications and Information
Systems, ONTSI (2012,
p.12), the processes of relocation and
internationalization of large firms, the
explosion in the use
of information technology and data
processing, have led to a growing
of computing needs at a higher rate of growth in computing power of personal computers. This disparity requires an evolution of computing architectures, which rely on processes to run simultaneously on multiple computers.
The ONTSI (2012,
p 14) has two definitions: "The definition given by the NIST (National Institute
of Standards and Technology),
cloud computing is a technology model
that enables ubiquitous, adapted and on-demand network
access to a shared set of configurable
computing resources shared (e.g., networks,
servers, storage, applications and services) that can be rapidly provisioned and released with reduced management effort or minimal interaction with the service provider. ... For the RAD Lab at UC Berkeley
.. cloud computing refers to both the applications delivered
as a service over the Internet,
such as hardware and software for data
centers that provide those
services ".
In Analytics (http://en.wikipedia.org/wiki/Analytics,
par. 1-2) indicates that
"
Analytics is the
discovery and communication of meaningful patterns
in data. Especially valuable in areas
rich with recorded
information, analytics relies on the simultaneous
application of statistics,
computer programming and operations research to
quantify performance. Often favors Analytics
data visualization to communicate insight. Commonly,
firms may apply
analytics to business data, to describe,
predict, and improve
increase business performance.
Specifically, within arenas include enterprise
decision management analytics, retail analytics, store assortment and
stock-keeping unit optimization, marketing mix modeling optimization
and marketing, web
analytics, sales force sizing and optimization,
price and promotion modeling, predictive science,
credit risk analysis, and fraud analytics.
Since analytics can
require extensive computation (see big data),
the algorithms and
software used for
analytics harness the most current methods
in computer science, statistics, and mathematics.
Forsyth (2013, p.5) in relation to the concept of big data, originating from the explosive growth of data on the network, indicates that there are two kinds: "structured" (standard), organized by codes, classifications
or practices common in how
computers understand (e.g. documentation that identifies the real assets' owner, address, mortgages, taxes, fees and the like); which application
programs can control and collect payments services and the NAIC code
(North American Industry Classification
System Standard for
Classifying businesses). "Structured data
is identified in a fixed field
within a record in the file”.
The remaining data, as Forsyth (2012, p 5.) says, are
"" unstructured, semi-structured or non-standard. These
include blogs in
the social networks, geo location devices,
barcode, vehicle telematics, X-ray, discussions, videos, images,
advertising, spreadsheets, addresses for
shipping, hearing screenings, emails ". In summary data do not
have an identifiable structure and
therefore cannot be easily used
(page 5.)
Forsyth proposes a definition in terms of trends:
"Since the work of software scientists is to
join together all
things and people they call it big data.
Big data is the
result of a convergence
of trends. Technology
to collect, manage and store data today is way cheaper
(1/6th the
cost of six
years ago, according to IDC), and dramatically
quicker than ever; data is viewed as really valuable
- specially understanding
customer behavior, or Improving customer satisfaction, or increase increasing traffic flow - and a third trend is understanding that gut
feel alone in today's
complicated world is simply not the way to run Organizations, big or
small. (Forsyth, 2013, p 5.)
It also notes that "data sets whose size is
beyond the ability
of commonly used
software tools to
capture, manage, and process the data
within a tolerable elapsed time. Big data sizes
are a constantly moving target currently ranging from a few
dozen terabytes to many petabytes of data
in a single data
set ... Big data is all about being reliable
data through to
see more and
finer grain context
and understand your
customers and your
operating environment in that context (Forsyth,
2013, p 5.)
The comparative, competitive advantages
or any other reference to the ability
of the company or country to position itself in the market are inefficient or inadequate for understanding how these entities should address the problem
of data available. And they
cannot escape attention, because
the data, information and knowledge derived from them allow and justify decisions.
That means that companies must
continually reinvent itself, should
forget the past and adopt new methods by making use of resources or factors of
production more sophisticated, and
in the case of human resources
professionals with a different qualitative and quantitative
training that was needed in the past.
The phoenix (Ancient Greek: φοῖνιξ, Romanization: Phoinix)
for the Egyptian Bennu, is a mythological bird
the size of an eagle, red,
orange and yellow glow, strong beak and
talons plumage. It was a fabulous bird that
was consumed by fire action
every 500 years, then rise from the ashes. When it was time to die,
it made a nest of spices and herbs,
put a single egg,
which hatched for three days,
and the third day was burning. The Phoenix completely burned
and reduced to ashes
when, resurgent egg
the same phoenix, always unique and eternal. This happened five hundred years but companies must continually renewed although the challenge is greater so they may not experience the renewal every 500 years but more
continuous, because the change in
the business environment is accelerated.
How do companies manage
to acquire skills phoenix reborn continuously
and have the ability to stay in the market ?. With
cognitive advantages, which are the means you are always on stage. He who knows,
can; he knows not how, out of the
market and languishes.
The following table shows some characteristics associated with the model
of cognitive advantages.
Table
2: Characteristics of the cognitive advantages
|
Theory
|
Principles
|
Support
|
|
Theory of cognitive advantages
|
Three VVV (Big data,
plus the fourth V (Value). Data volume, variety (formats, fonts), rate at which they are generated.
Knowledge and use of sophisticated
analytical techniques is essential
|
Resources and basic sustenance (place, plant, raw materials are tangible) but the way in which decisions for the efficient and effective use is made is different, it
is backed with big
data. Data, essential raw
shift in importance to material inputs (fixed, immutable, finite, privately
owned.) Data are "infinite",
changing, unstable, no presence
or definite existence, have no single owner but the best uses with opportunity and
creativity is the "best owner"
|
|
|
|
Infinite data, with or without structure, multiple media collection. Internal
sources are insufficient, the
necessary external sources are required (big data)
|
Source: Authors
processing/CRivasR, 2014
Past data, history, no longer serve;
the company holding on to them, you lose. The future is made, the data allow this
process are available for those
with the ability to explore and
use whatever is appropriate for
your situation. The information is
not enough, the simple data
transformations to generate this
information are outdated and
irrelevant; knowledge is what
makes the difference, for that companies should have qualified
human resources, prepared to understand
market dynamics differently. Decisions must be better, faster and timely delays are
fatal. (2)
Companies who want a place in the universe, in the market should set aside past data, which are
also partial, restricted, sometimes
false, i.e. pointless and think about the present and future. Give up all this is how
disappear, so must take the
nature of the phoenix that must
die to rise from the ashes. And it must be continuous, because as it is expected that professionals have the capacity for continuous learning, continuous learning and unlearning, the
same should require companies to develop the ability
to continually reinvent itself.
Figure 2 is self-explanatory;
should be noted that the company has a level of knowledge indicated in the K
point is the loser in front of the
one having the K'level.
In this case, more knowledge is not only better, but is strictly required and necessary.
3 Conclusions
International trade models explain why the exchange favors countries participating, despite criticism about the disparity of opportunity and other aspects. The worst situation is autarky.
The models have evolved from the comparative advantages (Ricardo), which dominates the
existence and use of factors to models of competitive advantage (Porter), in which is
emphasized as the shape as these factors are used. Advanced models incorporate the random component, essentially by the high
volatility of world events. The
market changes rapidly, information
is created, distributed and rapidly
changing, decisions regarding the production of goods or services have less shelf life, they are more dynamic.
Transcendent facts occur in the field of the factors that determine
the capacity and
nature of processes. Not enough to have
the best resources, or factors of lower cost, but
to know what, how and when consumers demand a good or service.
The critical factor now is the knowledge, which can add the time factor. The faster certainty
about what the market has expected, all right; but at the same time should be available other resources, especially human, able
to propose appropriate responses.
Innovation and creativity, timely
and focused are the characteristics of
dominant firms having the source of its advantages in knowledge.
The model of the cognitive advantages in the market is proposed , assuming
that companies or countries that have them, increase the chance of a better market positioning. This implies a paradigm shift from the tangible and concrete (production factors, facilities, large
manufacturing centers, high productivity) to the intangible (knowledge,
innovation, adaptability, managing "big
data")
Notes.
(1) The government of the United States
three decades ago, had agents in every
country in the world, regularly
reporting on political, social, economic events, using means that now seem primitive (phone, fax, by mail,
a few pictures) . It was enough for the government to act according to its objectives in relation to a country. Now, the agents monitored every second the facts, data and information sent different in nature and content and use the latest processing techniques and the volume is infinitely superior. Some minutes
without monitor and report can be decisive for the purpose of foreign policy.
(2) Forsyth (2012)
notes that companies who make data-driven decisions, raise their productivity by at least 6%; also will, be found
very personal details of consumers
who were not previously considered
because it was impossible to know
(the nano data)
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Analytics
Tomado 20/8/2014 de http://en.wikipedia.org/wiki/Analytics
Fénix
Tomado el
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, Chris ( 2012) For Big Data Analytics
There’s No Such Thing as Too Big
The
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March
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Tomado de 4syth.com . Emerging big data
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