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Dr. Roman Borboa, Ph.D.SBS Swiss Business School, Switzerland Dr. Elena Kasimovskaya, Ph.D.SBS Swiss Business School, Switzerland Dr. John Lambert, DBAThe university of Southern Mississippi, uSa Dr. Tatyana VolkovaBa School of Banking and finance, latvia Dr. Y. Rajaramramaiahah institute of Sciences, india Dr Rod Oxenberryaustralian institute of Business, australia SBS-JABR Coordinatorcarl olsenSBS Swiss Business School, Switzerland

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Towards an eclectic framework of external factors influencing

work motivation

Dietmar Sternadcarinthia university of applied Sciences

School of Management

europastrasse 4a-9524 Villach, austria

Tel: +43-5-90500-1217fax: +43-5-90500-1210

e-mail: d.sternad@cuas.at

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Towards an eclectic framework of external factors influencing work motivation

Abstractin this conceptual article, both classic theories and recent research streams on work motivation are reviewed with the aim to identify external factors affecting the state of motivation, i.e. those factors that can be at least partly influenced by the management of an organization. Based on common themes emerging from various motivation theories, a framework including motivational factors on an individual level (challenge, autonomy, feedback, and rewards), on the level of the relationship between the individual and the group (contribution, fairness, support, and standing in the group), and on the level of the relationship between the group and society (contribution to society; fairness, support, and standing within society) is proposed, with the relative importance of those factors depending on an individual’s expectations of them.The eclectic framework provides a basis for further comparative research on the relative impact of the various external influences on work motivation, and highlights the hitherto widely neglected influence of factors residing in the group-society relationship on the work motivation of group members.

Keywords: work motivation, employee motivation, motivation theories, job performance.

Introduction

job performance, according to Maier (1955), is a product of motivation and ability, with opportunity added as a third factor by Blumberg and pringle (1982). as this relationship was found to be multiplicative, work motivation – “internal factors that impel action and to external factors that can act as inducements to action” (locke & latham, 2004, p. 388) – is a key ingredient for creating high performance organizations.

To date, no generally accepted integrative model of work motivation has emerged, although some authors (for instance Klein, 1989; leonard, Beauvais, & Scholl, 1999; locke, 1997; Meyer, Becker, & Vandenberghe, 2004; Steel & König, 2006) have put forward their proposals. Such a theoretically inclusive and comprehensive model also remains illusionary, due to the widely divergent approaches to motivation research. What is proposed here is more mundane. The aim is to provide an eclectic framework of external conditions that potentially influence the motivation of people at work, informed by the major classic and more recent theories in this field. eclecticism is chosen rather than full conceptual integration

for the reason that existing theoretical approaches to understanding external factors influencing work motivation are arguing on different levels of analysis, and are related to different dimensions of work, which makes them conceptually incompatible if one tries to combine them in a coherent metatheory. on the other hand, however, there lies potential value in making the multiple levels of analysis and the multi-dimensionality of work explicit: first, it provides us with a more holistic rather than reductionist picture of possible external influences of work motivation; second, it allows us to identify certain areas of motivational factors which are still under-researched; and third, it can serve as a starting point for comparative studies on the relative influence of external motivational factors, thus opening a potential new avenue for further research on work motivation.

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Work for an employee can be defined in three dimensions: The first dimension, work task, provides an answer to the question ‘What kind of work needs to be done?’. The second dimension, work process, refers to the way in which work is carried out. finally, there are work outcomes, everything that a person receives as a result of the output of his or her work, including both positive and negative consequences. These three dimensions of work are studied in work motivation research on the following levels: (1) on the level of the individual employee; (2) on the level of individual-group relationships; and (3) on the level of group-society relationships. combining the three dimensions of work and the three levels of analysis results in a 3x3 framework which is presented in figure 1.

ContributionFairness

& supportStanding

ChallengeAutonomy& feedback

Rewards

Task Process Outcome

Dimensions of work

Leve

l ofa

naly

sis

Individual

Group

Society

Figure 1: An eclectic framework of work motivation

i reviewed the research on work motivation to identify theories that (a) explicitly or implicitly refer to external factors influencing the motivation of employees; and (b) include concepts that fall into one or several of the nine categories proposed in the framework. The review comprised the following classic theories: Maslow’s (1943) hierarchy of needs, herzberg’s (1959) two factor theory, adams’s (1963) equity theory, Vroom’s (1964) and porter & lawler’s (1968) expectancy theory, alderfer’s (1972) ERG-framework, hackman and oldham’s (1976) core job characteristics, and goal-setting theory (e.g. Klein, austin, & cooper, 2008; locke & latham, 1990; 2002); as well as more recent streams of work motivation research: self-regulation theories (e.g. Karoly, 1993; Vohs & Baumeister, 2004), particularly control theory (e.g. carver & Scheier, 1998) and social cognitive theory (Bandura, 1986; 2002), self-determination theory (ryan & deci, 2000), resource allocation theory (e.g. Kanfer & ackerman, 1989), action theory (e.g. frese, Beimel, & Schoenborn, 2003; frese, Stewart, & hannover, 1987), organizational support theory (e.g. rhoades & eisenberger, 2002), commitment theory (e.g. allen & Meyer, 1990; Meyer, Becker, & Vandenberghe, 2004), organizational citizenship behavior theory (e.g. organ, 1988; podsakoff, Mackenzie, paine, & Bachrach, 2000), organizational justice theory (e.g. folger, 1977; lind, Kanfer, & earley, 1990), the theory on challenge-stressors versus hindrance-stressors (e.g. Boswell, olson-Buchanan, & lepine, 2004; lepine, lepine, & jackson, 2004; lepine, podsakoff, & lepine, 2005; podsakoff, lepine, & lepine, 2007), social loafing theory (e.g. Kerr, 1983; Kerr & Bruun, 1983; Karau & Williams, 1993; latané, Williams, & harkins, 1979), and person-environment fit theories (e.g. Kristof, 1996; Kristof-Brown, Zimmerman, & johnson, 2005; Shaw & Gupta, 2004).

The theories and associated empirical studies were scanned for common concepts of external factors influencing on work motivation. if a concept was relevant in at least three different theories, it was incorporated into the respective category of the eclectic framework of work motivation. The resulting matrix (see figure 1) provides an overview of the main external motivational factors which are discussed in detail in the following sections.

Foundations of an Eclectic Framework of Work Motivation

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Challenge. The first proposed factor with a potential influence on work motivation on the level of the individual is the extent to which a task is perceived as a challenge which keeps people interested and allows them to learn and grow. it is one of the central tenets of goal-setting theory that people’s performance is linked to setting specific and high goals (locke & latham, 1990). Setting challenging goals and performance standards that create pro-active discrepancy which people want to reduce through goal-oriented behaviour also lies at the basis of social cognitive theory (Bandura & locke, 2003). drach-Zahavy & erez (2002) proposed a link between the degree to which a high goal is seen as a challenge rather than as a threat and higher levels of performance and adaptation to change. challenging work also helps people to fully realize their potential, which is related to self-actualization, the highest-level need in Maslow’s (1943) hierarchy. herzberg (1959) also saw challenges that lie in the work itself as a factor that can truly motivate people rather than merely prevent demotivation.

amabile, hill, hennesey, and Tighe (1994) observed a significant correlation between challenge and intrinsic motivation. in an effort to more closely investigate the relationship between challenge and motivation, more recent studies emphasize the role of stress. challenge stress, “conceptualized as stress associated with challenging job demands with actual or potential gain” (Boswell, olson-Buchanan, & lepine, 2004, p. 177) as opposed to hindrance stress related to potential negative outcomes was found to be positively related to the motivation to learn, and subsequently also to learning performance (lepine, lepine, & jackson, 2004). Similar positive effects of challenge stressors on motivation and organizational commitment could also be determined in the meta-analyses of lepine, podsakoff, and lepine (2005) and podsakoff, lepine, and lepine (2007). ohly and fritz (2010) found evidence for time pressure as one specific challenge-related stressor being associated with more pro-active behaviour at work. overall, there is convincing evidence that the right level of challenge of a task is an important factor influencing work motivation.

External Factors Influencing Work Motivation on the Level of the Individual

Autonomy.

The second and third external influencing factors on motivation on the level of the individual, autonomy and feedback, are related to the work process. autonomy, an individual’s discretion in deciding how to achieve a certain goal, was one of hackman and oldham’s (1976) core job characteristics, which they linked to achieving the critical psychological state of experienced responsibility for work outcomes. Spector (1986), on the other hand, attributed the positive effect of autonomy to employees’ perceived control. latham (2007) emphasized that “the importance of designing jobs that allow autonomy for such outcomes as learning, performance, organizational citizenship behaviour, and satisfaction has been shown by a multitude of empirical studies” (p. 160).

parker, Williams, and Turner (2006) determined a significant link between job autonomy and pro-active work behaviour as well as flexible role orientation (an individual’s perception of his or her role as being broader than just fulfilling their core task, i.e. including the ownership of goals and problems beyond their immediate job). according to self-determination theory (ryan & deci, 2000), autonomy is an innate psychological need of people, and is linked to stronger integration and internalization of work goals. furthermore, research from the realm of action theory shows that autonomy in

the form of discretion to influence working conditions and work strategies has significant positive effects on personal initiative at work (frese, Kring, Soose, & Zempel, 1996).

Feedback.

Several theories argue that feedback, information that is provided to an individual about his or her job performance, can have an effect on work motivation. feedback interventions which report on discrepancies towards the standard at task level and which contain cues that support learning (rather than non-task, personality-oriented cues) were found to be likely to “yield impressive gains in performance” (Kluger & denisi, 1996, p. 278). feedback comes in two forms: task feedback, which is directly observable from fulfilling a task, and social feedback, which refers to what others communicate about one’s performance (leonard et al., 1999). fried and ferris (1987) observed that job feedback affected all three of the psychological states that hackman and oldham (1976) proposed in their job characteristics model, i.e. experienced meaningfulness of work, experienced responsibility for work outcomes, and knowledge of actual work outcomes. Moreover, action theory emphasizes the importance of feedback, especially non-threatening

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task feedback, and its positive influence on motivation (frese et al., 2003). a likewise positive effect of feedback on organizational citizenship behaviour was indicated by podsakoff et al. (2000).

Goal-setting theory stresses the importance of feedback in helping to evaluate progress towards goals (locke et al., 1981; locke and latham , 2002). cellar, degrendel, Sidle, and lavine (1996) provided empirical support to illustrate that quantity goals combined with feedback can lead to higher performance. Vance and colella (1990) proposed that the type of feedback also plays an important role: while positive feedback enhanced performance and induced people to set even higher goals, negative feedback led to setting lower (i.e. more realistic) personal goals. These findings were also confirmed by ilies and judge (2005).

feedback is also a key concept in control theory and in social cognitive theory. While a negative feedback loop bringing attention and behaviour in line with set standards or goals is central to control theory (carver & Scheier, 1998), social cognitive theory posits that a feed-forward loop also guides proactive control (Bandura & locke, 2003). There are, however, differing theoretical conclusions about whether positive feedback (as argued by social cognitive theory) or negative feedback (as in control theory) provides more motivation (latham, 2007). Van-dijk and Kluger (2004) suggested that positive feedback increases motivation when people want to fulfill a desire, while negative feedback can increase motivation when they want to avoid failure.

Rewards.

Work outcomes for individuals (e.g. monetary and non-monetary rewards) are often used by managers to induce employees to show higher effort towards attaining organizational goals. This is in line with basic ideas of expectancy theory (Vroom, 1964), in which perceived consequences of one’s performance and their value for the individual are essential elements of motivation. Similarily, in resource allocation theory, the perceived utility of performing a task is directly related to the allocation of cognitive resources to this task (Kanfer & ackerman, 1989). in organizational support theory, rewards were also found to have a positive influence on perceived organizational support (rhoades & eisenberger, 2002).

considerable doubts about the importance of rewards for motivation were raised by deci (1971), who claimed that extrinsic rewards can have a negative rather than a positive effect as they potentially undermine intrinsic motivation, an argument that was recently

supported in an empirical study in the public sector by oh and lewis (2009). herzberg (1959) also saw monetary rewards as a hygiene factor, only capable of preventing demotivation, but not directly contributing to motivation. Wright and Kacmar (1995) found that reward systems based on goal achievement can induce individuals to set lower goal levels for themselves. in addition, when people perceive it as impossible to reach a goal to which a bonus is attached, performance considerably decreases, as they know that they will not get a bonus anyway, regardless of their additional effort (lee, locke, & phan, 1997). a more differentiated picture was revealed in a meta-analytical review of empirical research on the relationship between financial incentives and rewards. jenkins, Mitra, Gupta, and Shaw (1998) determined a correlation of .34 between financial incentives and performance quantity, with no significant link to performance quality.

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theory posits that commitment of employees towards an organization’s goals, whether due to emotional commitment or feelings of responsibility and obligation, is correlated with motivation (allen & Meyer, 1990). Taken together, the arguments from job characteristics, social loafing, and commitment theory suggest that when people perceive how their work contributes (a) to a common goal, and (b) to the welfare of others in the group, this induces positive social effects and influences the commitment to their work group and organization, which in turn can lead to higher work motivation.

Fairness and support.

Two inter-personal factors were found to have an influence on motivation during the work process: fairness and social support. The importance of fair treatment in work situations was emphasized by equity theory (adams, 1963) and more recently by theorists in the organizational justice tradition. perceptions of distributive justice, procedural justice, and interactional justice were found to have a strong effect on employee commitment and performance (colquitt, conlon, Wesson, porter, & ng, 2001; inness, Barling, & Turner, 2005). The possibility of having a voice in decision-making processes, and fair and respectful treatment by superiors are major factors influencing fairness perceptions. fair treatment has also been linked to perceived organizational support and its motivational effects (rhoades & eisenberger, 2002).

in addition to fair treatment, supervisor support during the process of work has been acknowledged as a main factor influencing employees’ state of motivation. Supervisor support (or supportive leader behaviour) can instill self-confidence, social satisfaction, and stress reduction for subordinates, thus increasing their effort and performance (house & Mitchell, 1974; house, 1996). in job characteristics research, Morgenson and humphrey (2006) found that social support incrementally predicted satisfaction above other motivational work characteristics. This confirmed findings of Van Yperen and hagedoorn (2003), who showed that social support can increase motivation levels regardless of job demands or the levels of control. Supervisor support further also plays a role in goal-setting theory (latham, 2004), self-

External Factors Influencing Work Motivation on the Level of the Relationship Between the Individual and the Group

according to latham and pinder (2005), work motivation is a psychological process “resulting from the interaction between the individual and the environment” (p. 486). one part of the environment in the form of the immediate group and organization a person is part of is taken into account in this section, which provides an overview of external factors influencing work motivation at the individual-group or individual-organization interface.

Contribution.

Task significance, the extent to which one’s work is important to others and contributes to the group or organizational performance, was one of hackman and oldham’s (1976) core job characteristics. it has been related to the perceived meaningfulness of one’s work, with a resulting consequence on work motivation (parker & Wall, 1998). Studies by fried and ferris (1987) and by humphrey, nahrgang and Morgenson (2007), however, could not confirm this mediating effect between task significance and work motivation.

Grant (2008), on the other hand, argued that task significance can indeed have a considerable influence on work motivation, through the perception of how one’s job is related to the well-being of other people. he proposed that perceived social impact – the extent to which people feel that their actions contribute to the welfare of other people – can have a mediating effect on the relationship between task significance and job performance (Grant, 2007; Grant et al., 2007). in several experiments including different occupational groups, Grant (2008) found supporting evidence, suggesting that relational mechanisms play a crucial role in this relationship. in Grant’s words, the mechanism for explaining these effects are ‘other focused’ rather than ‘task focused’, with “cues about social impact and social worth” (p. 119) being particularly important in this process. a socially-determined ‘contribution effect’ was also suggested by Kerr (1983) and Kerr and Bruun (1983). They tried to explain the phenomenon of social loafing – the tendency to reduce effort and motivation when working in a group (latané et al., 1979) – with the perception of individuals that their inputs are not essential or dispensable for the group output. in a meta-analytic review, Karau and Williams (1993) confirmed that task valence can reduce social loafing. people need to feel that they contribute to a group and its purpose with their output, and that their work is needed and valued by others in the group. Bishop and Scott (2000) observed that perceived task interdependence is positively related to commitment towards both a team and the organization. commitment

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determination theory (deci, connell, & ryan, 1989), organizational support theory (rhoades & eisenberger, 2002), commitment theory (Meyer et al., 2004), and organizational citizenship behaviour theory (podsakoff et al., 2000).

overall, there is strong cross-theory agreement that fair and supportive supervisor behaviour can considerably affect the state of motivation of subordinates.

Standing.

as an outcome of their work, people do not only value monetary or non-monetary rewards, but also have the need for a certain standing in their group, i.e. being respected by other group members both as a person and for their work. already Maslow (1943) classified esteem – being respected or well-regarded – among the higher-level needs. recognition was also identified as being one of the most important motivating factors by herzberg (1959). The need for being a respected member of one’s social reference groups relates to the basic needs of belongingness, relatedness, and acceptance. Baumeister and leary (1995) argue that “[a]bundant evidence [..] attests that the need to belong shapes emotion and cognition” (p. 520). Motivation, which is in essence an affective and cognitive process, can thus be considerably influenced by the need for belonging to and being respected by a group. Self-determination theory proposes that work environments which support relatedness needs of people foster the integration and internalization of goals, leading to a stronger motivational impetus than pure external motivation through rewards or punishments (ryan & deci, 2000). in the ‘group value’ model of procedural justice (lind & Tyler, 1988), the possibility to have a voice in a decision-making process is seen as an indication of respect for a person, and supports a positive perception of the procedure and its outcome. de cremer (2002) argued that “if people feel respected by the others in their group, this may satisfy their belongingness need and [..] will increase their motivation to reciprocate this positive relational information by acting more in favour of the group’s interest” (p. 1335). employees who are more motivated to act in line with the group’s interest will also be more likely to contribute to a higher performance of the organization.

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The Third Dimension: Turning to the Group-Society Relationship

although there has been a lot of research on external motivational factors on the level of the individual and on the level of interaction between a person and other members of the group or organization, another dimension has been widely neglected by the extant literature on motivation: the potential influence of the relationship of the organization with other parts of society on the motivational state of the members of the organization. franco, Bennett, and Kanfer (2002) suggested that there is a possibility that workers’ attitudes and values are influenced by the type of organization they work for. as latham (2007) stated, “motivation is the result of the reciprocal interactions between people and their work environment and the fit between these interactions and the broader societal context.” (p. 162) The broader societal context, however, has not been in the focus of the major theories on work motivation.

Social identity theory (Tajfel, 1978; 1981) posits that people have both an individual identity and a social identity, the latter being the part of a person’s self-concept which is based on one’s membership, as well as cognitive and affective attachment to a social group. in their social identity, people’s behaviour is “shaped by, and oriented toward, the interests of the group as a whole” (haslam, powell, & Turner, 2000, p. 323), leading to an interpretation of the world consistent with the group’s or organization’s values and culture (p. 326). chen and Gogus (2008) argued that “there is evidence that motivational states and processes at one level (individual or team) do in fact play influential roles in shaping performance at different levels (individual or team).” (p. 303) This is supported by the findings of chen, Kanfer, deShon, Mathieu and Kozolowski (2009), who observed that “team-level motivation can explain additional variance in individual performance over and above individual-level motivation” (p. 53) and by the recent work of lewis (2011), who questioned whether existing theories of work motivation are sufficient to explain all motivation phenomena in working environments which increasingly rely on teams.

as in the group-oriented dimension, it is possible to classify potential influencing factors that stem from the relationship of the organization with society at large into task, process, and outcome categories. The potential influencing factors at the level of the group-society relationship are:(a) Contribution of the organization to society: it has been found that an organization’s positive contribution to society can affect its attractiveness as an employer (Turban & Greening, 1997). people could be motivated by the feeling that what they contribute to also has a positive impact on other people outside of the organization.

(b) Fair treatment and support of the organization (and the profession) at a societal level: robertson and colquitt (2005) proposed that shared team justice (defined as the common perception of team members about how the team as a whole is treated) has an influence on team performance. also li and cropanzano (2009) argued that what they call justice climate, the way in which teams are treated by outside agents, have an influence on the attitudes and behaviour of team members. This process could also be at work at other levels. if people feel their organization or their profession are unfairly treated (for example through constant negative media reports), or receive less societal support than other comparable institutions and professions, this could lead to demotivation.

(c) Standing of an organization in society: When an organization is highly recognized at the societal level, this could also influence its members’ feelings and attitudes. haslam et al. (2000), for instance, found that reference to an organization’s high status induced employees to show more effort beyond their immediate task.

The potential influence of factors in the relationship between the organization and society on the motivation of members of an organization could hold promising opportunities for further research. for this purpose, i suggest the following three propositions:

Proposition 1: The perceived contribution of an organization to society can influence the work motivation of the members of the organization.

Proposition 2: The perception of fair treatment and support that an organization or the profession receives by other parts of society can influence the work motivation of the members of this organization or profession.

Proposition 3: The standing of an organization in society can influence the work motivation of the members of the organization.

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The Relativity of External Factors Influencing Work Motivation

The impact of the external factors influencing work motivation should not be seen as absolute in the sense of ‘the more, the better’, but rather as relative to individual expectations. Barrick and Mount (1993), for example, observed that responsible and conscientious people as well as those who are extroverted perform better in jobs with a high degree of autonomy, while more soft-hearted and cooperative people tend to perform better in jobs without a high degree of discretion. also langfred and Moye (2004) argued that the effect of task autonomy on motivation is contingent on factors like an individual’s need for autonomy or need for achievement. likewise, Van-dijk and Kluger (2004) suggest that the effect of different types of feedback on motivation is influenced by the expectations that people hold – whether they want to achieve or prevent something. how much individuals value rewards can also depend on their expectations. if, for example, a person who expected a certain amount of monetary rewards gets a lower bonus than expected for the accomplishment of a particular task, chances are high that this incident will have a detrimental effect on the state of motivation of this employee.

a theoretical underpinning for the importance of the role of expectations about the external factors for work motivation could be provided by personal-environment fit theories (Kristof-Brown et al., 2005). Kristof (1996) posited that an individuals’ characteristics, specifically personality, values, goals, and attitudes, determine whether a person-organization fit exists, which in turn can lead to positive attitudes towards the job, thereby also influencing job motivation. Specifically, the supplies-values fit approach points out the importance of the level of task characteristics available (supplies) versus the expected or desired level of these characteristic in a job (values) (Shaw & Gupta, 2004). Ton and hansen (2001) found support for a relationship between values congruence and work motivation, mediated through work satisfaction. The results of edwards and harrison’s (1993) and edwards’ (1996) studies indicate that strain increases both when supplies of job characteristics are considerably higher or lower than demands. While for challenge, autonomy, and feedback, it is possible that either too high or too low levels of supply compared to expectations can have a detrimental effect on motivation, for the other factors (rewards, contribution, fairness, support, and standing), only less than expected supply can have a negative effect. This leads to the following:

Proposition 4: The closer challenge, autonomy, and feedback levels are to the expectations of an individual regarding these factors, the higher will be their influence on the state of work motivation.

Proposition 5: The motivational effect of rewards, contribution, fairness, support, and standing will be contingent on whether these factors reach a certain minimum level that is expected of them by an individual.

The relative nature of external factors of work motivation is illustrated in the framework presented in figure 1 as an arrow labeled with ‘expectations’ pointing towards the grid of motivational factors, thus indicating that these are only influencing the motivation of people working within organizations relative to the expectations they hold about the factors.

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Discussion and ConclusionBased on a review of classic and more recent research on work motivation, this paper proposes an eclectic framework

of external factors influencing the state of work motivation. its main contributions lie (a) in making explicit that theories on work motivation were arguing on different levels of analysis and in different dimensions of work; (b) in pointing out that one level of analysis, the influence of factors residing in group-society relationships on the motivation of group members, has been widely neglected in motivational research; and (c) in emphasizing the relative nature of external motivational factors and their dependence on an individual’s expectations about them. it was not intended to propose a new, integrated theory of work motivation, but rather to offer a framework which can serve as the basis for further comparative research, which could add additional insight to our understanding of work motivation processes in the following ways: first, the relative importance of external motivational factors could be evaluated. is there a stronger influence of social factors like fairness and support compared to task characteristics or rewards? how strong do task, work process, and work outcome variables contribute to the overall state of motivation? Second, the framework opens the possibility for comparative research across cultures, age groups, industries, or gender. do differences in cultural dimensions have an effect on the relative importance of influencing factors? are employees in public institutions more motivated by externally-oriented factors than workers in private enterprises? are some factors more salient in certain stages of one’s career or life-cycle? Third, further research could concentrate on how these factors individually or in combination influence individual elements that constitute the state of motivation, such as intent, self-efficacy, and volition. also a possible moderating role of internal influencing factors such as, for instance, personality traits could be investigated. in addition to forming the basis for comparative research, the framework could also serve as a common ground for researchers of different theoretical schools to discuss how their insights relate to others in the field.

Kanfer, chen, and pritchard (2008) noted that work motivation theories have “a tendency to sacrifice completeness for precision” (p. 7). While it is illusive to claim completeness in motivational research, the suggested eclectic framework is a step towards a more holistic picture of external factors influencing work motivation. it needs to emphasized, though, that the framework by no means claims to explain work motivation as a whole. Theories which focus more on internal psychological factors of work motivation, such as, for example, attribution theory (Weiner, 1985), trait theories (Barrick, Mount, & judge, 2001), or emotional aspects of motivation (côté & hideg, 2011) have not been considered. likewise, as the framework presented here focuses on the dimensions of work, non-work influences such as family, age, or career life stage (Kossek & Misra, 2008) are also not included. This leaves room for further efforts to create more integrative perspectives on work motivation.

The eclectic framework of external factors influencing work motivation presented here also has some important implications for practice: Managers still often use rewards and bonus systems as a primary tool for trying to motivate people to perform highly. The eclectic framework could raise their awareness that there are several other levers for improving the conditions under which people can work in a motivated way. it can further be used as a diagnostic tool to check whether one or more of the factors are not adequately taken care of according to the expectations of employees, or as a means to determine which interventions could be taken to influence working conditions that facilitate the development and retention of positive motivational states.

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Developing nations and sustainable entrepreneurial policy: Growing into novelty,

growing out of poverty

Dr. Robert Anthony EdgellSBS Swiss Business School

Balz Zimmermannstrasse 38 cZürich, Switzerland ch-8058

andState university of new York

institute of Technology100 Seymour road

utica, nY 13502Tel: +1 415 341 7543

email: robert@robertedgell.com

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ABSTRACT

Throughout contemporary economics and institutional literature, many scholars argue for governmental policies that encourage citizens to engage in entrepreneurial activity as a safeguard to sustainable progress, especially during financial crises. The institutional context is relevant since it determines the broad constraints, normative expectations, and incentives that bind and mediate the behaviors of individual actors and organizations. however, while this dominant rational choice and economic institutional theory provides some help with the challenge of empowering citizens, it may not fully or robustly consider the antecedent and micro processes that enable actors, especially those who may be viewed as vulnerable, to gain agency. accordingly, the underlying aim of this paper is to gain insight into the embedded micro and macro processes that enable sustainable opportunity for those in society who often are most at employment risk. The paper reviews cognitive and developmental psychology as well as the societal influences and national systems literature, with emphasis on research relevant for developing countries. using a discursive institutional approach, the paper delineates and discusses institutional change in support of a proposed national entrepreneurial capacity development framework. lastly, the paper concludes with additional areas for future research.

KEYWORDS:change; institutional theory; creativity; innovation; personality; divergent thinking; discourse; discursive; policy; entrepreneurship; social skill; social economic status (SeS); parenting; communal networks; economic systems; political systems.

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“Implementing innovation policies in developing countries has proved to be a challenging task. Academics, development practitioners and policy-makers are still struggling with understanding how to conceptualize innovation in developing countries, identifying who are the beneficiaries of innovation processes and more generally conceptualizing innovation system policies in the South. Furthermore, in designing innovation policies, policy makers often lack tools for identifying problems in the system and for selecting policies supporting innovation and competence building to tackle them.” (chaminade, lundvall, Vang-lauridsen, & joseph, 2009, p. 2)

Throughout contemporary economics and institutional literature, many scholars argue for governmental policies that encourage citizens to engage in entrepreneurial activity as a safeguard to sustainable progress, especially during financial crises (choe, 2006; Salkowitz, 2010). The institutional context is relevant since it emerges from social discourses and ideas that frame the broad constraints, normative expectations, and incentives which, in turn, guide and mediate the behaviors of individual actors and organizations. Traditionally, scholars have viewed nations as geopolitical entities and legal cultures that firmly establish institutions with the aim of providing social assurances for citizens and reducing social costs. however, while this dominant rational choice and economic institutional theory provides some help with the challenge of empowering citizens, it may not fully or robustly consider the antecedent micro processes that enable actors (chaminade et al., 2009; Green, li, & nohria, 2009; Maguire & hardy, 2009; Mahoney & Thelen, 2010; peters, 2012), especially those who may be viewed as vulnerable, to gain agency or become “socially skilled” (fligstein & Mcadam, 2012). recent research (chaminade et al., 2009; lundberg & Weurmli, 2012) confirms the need for scholars, policy makers, and practitioners to more deeply understand agency and human development processes. consistent with emerging discursive and sociological views on institutionalism (peters, 2012), the underlying aim of this paper is to gain insight into the embedded micro and macro processes that enable sustainable opportunity for those in society who often are most at employment risk. While i am most concerned about adolescents and young adults during the “transition to work” stage, the research as necessary encompasses developmental needs throughout various stages (lloyd, Behrman, Stromquist, & cohen, 2006). My research is guided by the questions, “What are the antecedent and contextual variables that influence and predict high levels of creative behavior among the young in developing countries?” and “Which institutional strategies might governments deploy to encourage creative and entrepreneurial behavior in adolescents and young adults?” To answer these questions, i begin this exploration by first defining creativity then deepening my understanding of the cognitive underpinnings of creative behavior. next, i review the developmental psychology and social influences literature on creativity, especially that research which is most relevant for emerging economies. i discuss the implications for national macro systems and delineate an entrepreneurial capacity development framework that offers insights about discursive strategies for institutional change (Barbato & Kratochwil, 2009; Gofas & hay, 2010; peters, 2012; Schmidt, 2010). lastly, i conclude by discussing additional areas for future research.

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Creativity, Innovation, Sustainability and Entrepreneurship Defined

Sternberg and lubart (1999, p. 3), building upon the work of many other creativity authors, define creative behavior as “the ability to produce work that is both novel (i.e., original, unexpected) and appropriate (i.e., useful, adaptive concerning task constraints) . . .” as judged by independent critics. amabile (1998) argues that creativity consists of three components: expertise, creative thinking skills, and motivation. She prescribes a widely accepted method for judging creative products or outcomes along the discrete variables of creativity, technical goodness, and aesthetics, known as the “consensual technique for creativity assessment” (amabile, 1996). from a developmental perspective, creativity at the individual level is viewed not as a priori or an inherent ability, but rather as an actor’s domain-specific expertise, recognized by an audience, that temporally evolves through deliberate practice (Gruber & Wallace, 1999; Sternberg & o’hara, 1999). consistent with this point, deliberate creative development is not a mystical phenomenon restricted to only a few “gifted” actors, but rather a systemic possibility for many actors who make investments in developing their divergent thinking abilities (M. roberts, 2006). however, individual creativity becomes socially impactful often when collectively organized through entrepreneurial firms that seek to innovate.

historically, many authors have defined innovation as a firm-level sequential two-part process of idea generation (i.e., exploration) and commercialization (i.e., exploitation) of the most promising ideas into useful products or services (Benner & Tushman, 2003; March, 1991; e. roberts, 1988). however, a new view of innovation suggests that it is an information-driven distributed agency process of changing social institutions and industry structures to permit the acceptance of novel market-tradable value or utility (edgell & Vogl, 2011, 2013; fischer, 2000; Garud & Karnøe, 2003; hargadon & douglas, 2001). in this view, utility takes various beneficial forms including products or services, production processes, organizational structures, and institutional structures (Teece, 1988). furthermore, i have adopted the widely accepted definition of sustainability put forth by the united nations (Brundtland, 1987): sustainable entrepreneurial activity meets the needs of present inhabitants of the earth without compromising the ability of future generations to meet their own needs. This suggests that national development and innovation activities should purposefully minimize any harm resulting from their processes while creating benefits (value) for current and future citizens (edgell & Vogl, 2013).

Building upon the definitions above, entrepreneurs are those who through the actions of entrepreneurship, a combination of creativity and business expertise, are able to lead the sustainable introduction of innovations or novel market value (reynolds, 2010). entrepreneurs are often driven by their intuitive sense that the current and accepted equilibrium in a given stable system is unsatisfactory, a view that the system could be more beneficial to multiple stakeholders if certain novel or creative changes were introduced. although entrepreneurs have traditionally been conceived as transformative economic agents in marketplaces, current scholarship extends the scope to include those who through social skill (fligstein, 2001; fligstein & Mcadam, 2012) introduce novel change within social and political arrangements. furthermore there are emergent conceptions of “social entrepreneurship” that feature entrepreneurs who, working through hybrid “social venture” organizational forms, transcend boundaries to achieve social change and impact (purpose) through sustainable economic means (Martin & osberg, 2007).

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Cognitive Perspective: Creativity, Personality, and Thinking Style

expertise; metacognition; and associative theory and divergent thinking. Simply put, highly creative individuals tend to use divergent thinking, pulling from their memory of various random thoughts to assemble unusual or unique combinations. This may require a constant flexibility in thinking and willingness to continuously iterate until reaching a degree of satisfaction. furthermore, he makes a case for problem framing as essential for creativity by noting that “it may be the case that creative solutions are only possible when there is an original problem” (runco, 2001, p. 2894). also, puccio, firestien, coyle, and Masucci (2006) give empirical evidence that actively increasing divergent thinking, as is the case with brainstorming, can lead to enhanced creativity outcomes. Basadur, runco, and Vega (2000) empirically demonstrated the benefits, greater ideation, and enhanced idea evaluation, derived by carefully avoiding premature convergence. prematurely drawing conclusions (e.g., stopping the ideation process due to the belief that the most novel idea has been generated) is perhaps a form of inflexible cognitive style that is correlated with high levels of the personality disposition unexploring.

Eager was, after unexploring, the factor that differed most between divergent and convergent thinkers, with divergent thinkers scoring low and convergent thinkers scoring high. This result is consistent with feist’s trait predictions that achievement would be aligned with more convergent thinkers while lack of conscientiousness and norm doubting would be aligned with more divergent thinkers. This difference might be best explained by returning to runco (2001, p. 2893) who argues that not only does problem framing and divergent thinking require a flexible perspective, but also a “questioning attitude.” norm doubting would be consistent with an actor who questions assumptions and prefers divergent over routine thinking. furthermore, lack of conscientiousness would allow divergent thinking actors to flexibly switch perspective and assumptions, internally released from a sense of obligation to consider how these shifts might impact others. Given that the subsumed trait, achievement, may derive its meaning from extrinsic sources, such as evaluation by others, its opposite,

The study of personality (i.e., behavior sets expressed as character traits) is interesting since it offers support for and insight into human agency, the desire and ability of actors to proactively shape or change their environments. personality factors or multitrait measures, considered by social scientists to be more comprehensive than individual traits, make analysis of a range of actor behavior possible (Sandy, Boardman, & deutsch, 2000). in particular, much research links divergent thinking cognitive style to creative ability, especially an actor’s capacity to make remote associations and, thus, generate novelty (Wechsler, 2006, 2009).

Divergent Thinking.

divergent thinking is a cognitive process used to generate novel ideas by exploring many possible problem frames and solutions and is characterized by acts of acknowledging existing assumptions and mental constructs about a given situation then deliberately seeking to break or destruct those concepts (Mauzy & harriman, 2003). This is done while, often simultaneously, searching to make new or remote (unusual or novel) connections between existing ideas that could be further transformed into new mental constructs, ideas or frames about a given situation. edgell (2007) empirically tested a diverse population of immigrants, minorities, and others involved with independent media in the united States to understand how various forms of actor heterogeneity (i.e., cognitive, creative, and social) and dissonance positively influence organizational creativity outcomes. This work exposed dissimilarities in social identity constructions between networked divergent and convergent thinking actors. in particular, there were considerable personality differences between adult individuals who were divergent thinking and those who were convergent thinking. They had diametrically opposed scores for personality factors (in priority order) identified as “unexploring”, “eager”, and “Socialized”. Unexploring indicates an actor’s degree of unwillingness to explore new ideas and experiences whereas Eager indicates an actor’s degree of eagerness to engage in social situations and abide by prevailing social norms. Socialized indicates an actor’s degree of socialization or willingness to engage in social relations. divergent thinkers scored very low while convergent thinkers scored very high for these three factors. as such, these factors may be referred to as the “fault line” between the two cognitive styles.

Unexploring showed the highest degree of distinction between divergent and convergent thinkers. This is supported by runco’s (1994, 2001, 2007; 1999) considerable work that places cognitive ability at the center of creative activity. he proposes a model of creativity that delineates four cognitive dimensions along which creative actors differ from others: information processing and perception; memory, information, and

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non-achievement, logically fits with divergent thinkers’ profiles, as they seem to need a high degree of freedom from social conscientiousness and expectation to cogitate divergently and ideate (runco, 2001).

The least distinct, yet still significant, difference between divergent and convergent thinkers was socialized. With this factor, again convergent thinkers scored high, while divergent thinkers had low scores. The need for low arousal and protection from high sensory stimulation may, in part, explain why divergent thinkers tend to withdraw from social settings or engagement with others. Martindale (1999) writes of research that describes how divergent thinkers lack cognitive and behavior inhibition and, therefore, social settings may be more stressful for them than others. Martindale agrees with runco (2001) but clarifies that the most likely explanation for a divergent thinker’s withdrawing is probably heightened sensitivity due to “augmentation,” the divergent thinker’s amplification of stimuli intensity as a strategy for widening associative possibilities. runco also explains that this aids divergent thinkers in noticing subtle associations that might be overlooked by others. Martindale (1999), consistent with Vartanian, Martindale, and Kwiatkowski (2007), points to an impressive array of research (coren & Schulman, 1971; dentler & Mackler, 1964; horton, Marlowe, & crowne, 1963; Krop, alegre, & Williams, 1969) supporting his argument that increased cortical arousal causes a discernible decrease in creative output from individuals. even the mere

presence of others (Zajonc, 1965) or extrinsic rewards (i.e., cash incentives) are problematic, as these situations increase arousal which in turn decreases creativity (amabile, 1998; Martindale, 1999). chen (2006) explains that increased arousal leads to greater cognitive loading that, in turn, impedes information processing, ultimately resulting in reduced cognitive flexibility and creative thinking. forms of stress that increase arousal are also detrimental to creativity (Van dyne & jehn, 1998). de dreu and Weingart (2003) present research that demonstrates how even the anticipation of stressful situations (i.e., hostile relationships) can decrease an actor’s ability to think and perform creatively. Vartanian et al. (2007) empirically demonstrate a link between the speed of information processing and creativity. in their negative priming tests, individuals with high creative potential reacted much more slowly than those with less creative potential. Martindale (1999) reports on his empirical research (Martindale & hines, 1975) that demonstrates creativity requires a form of “defocused attention” that results from very low levels of cortical activity that are not typical for the average actor when engaged in mental activity. runco (2001, p. 2892) refers to this phenomenon of defocused attention as “wide attention deployment strategies.”

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Social Economic Status (SES).

SeS is interesting in that the benefits normally associated with wealth may not significantly influence the development of creativity in the young. in contrast, the work of Gardner (1983, 1993a, 1993b) suggests that SeS may not be a primary predictor of creative development. rather his research reveals that the family’s resource allocation strategy may matter most. Both rich and poor families of highly creative adults were supportive. early on, these families identified the child with high creative potential and supported that child with a disproportional share of resources.

other research indicates that lower SES may confer benefits (Bruininks & feldman, 1970; dudek, Strobel, & runco, 1993). dudek et al. (1993) show that many creative individuals come from larger lower income families. runco (2007, p. 52) explains that this may occur since children from such families may have fewer restrictions, distractions, and toys—all factors that may encourage them to divergently invent ways to play perhaps by using found or discarded objects or other freely available materials.

however, the literature does distinguish between the influences of lower income status and of abject poverty. poverty, especially extreme forms, probably does not yield any positive influence on creative development for most children (freire, 2000; Gissi B, 1990; Martín-Baró, aron, & corne, 1994; nunes, Schliemann, & carraher, 1993; preiss & Strasser, 2006). as preiss and Strasser (2006, p. 61) point out, “On the one hand, strategies such as those applied by street kids to survive are indeed creative strategies; on the other hand, what psychologists consider typical attributes of a culture of poverty are indeed factors that very much limit people’s potential for creativity, such as fatalism, hopelessness,

and feelings of inferiority, among others.” This supports csikszentmihalyi’s assertion that the incidence of creativity at the individual level is positively influenced by “slack” mental and physical energy or an excess of energy above and beyond that needed for daily existence (csikszentmihalyi, 1999, p. 322).

Parenting.

Much of this literature indicates that the direct influence of parents’ own creativity, attitudes, and behav-iors are multi-faceted and powerful. first and foremost, a parent’s own creativity is an important predictor of child creativity (noble, runco, & ozkaragoz, 1993). This may be true due to behavioral modeling and social values transmission (runco, 2007, p. 61). interestingly, noble et al. (1993) found that in the united States the correlation between a father’s creativity and that of the child was more significant than that of the mother and child. even more interesting, Bloom and Sosniak (1985) revealed that families which had a particular interest and understanding of a particular domain transmitted that appreciation to the creative child. Yet, Wechsler (2000) through ethno-graphic research on twenty Brazilian writers and poets revealed that the dyadic relationship between mother and child may be of most interest. Mothers, more than teachers as is often cited in works originating in north america, were the driving influencers of creativity. all participants claimed that their mothers were their key creativity mentors and possibly even their key means of emotional support. it could be that in less tolerant circum-stances, the mother provides creative and emotional sup-port for those who are viewed by others as different.

Both albert (1991) and Milgram (1991) found that parents often act as cultural filters, determining the optimum levels of both diverse experiences and

Developmental Perspective: Creativity, Family, and Community

The developmental literature addresses the ways in which localized contextual variables influence the advancement of creative behavior in children and young adults. raina’s (raina, 2003; runco, 2007) works uncovered that many creative adults trace their abilities to special experiences, events in early childhood that triggered their life-long curiosities. While triggering events seem important, other scholarship centers on education as a strategy for fostering creativity. Yet another emergent body of literature delves into the contributions of those individuals outside traditional educational systems such as community and family mentors (cox, daniel, & Boston, 1985; piirto, 1992). for example, empirical data links parenting practices during preschool years to the flourishing of creative potential later in high school (Goertzel, Goertzel, & Goertzel, 1978; nickerson, 1999; Singer & Singer, 2006). Given this evidence, the family and local community play an important role that may complement that of the broader educational system. if this is the case, then which particular family and community variables might influence creative development the most? from the growing body of evidence, many of these important variables fall into three broad categories: social economic status, parenting, and communal networks. each category is explored in detail below.

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permissive environments that support divergent thinking in their children. however, they caution that too much diverse experience leads to confusion and excessive permissiveness leads to insecurity. healthy attachment is important since secure bonding ensures more exploration by children since they are confident that their parents will still be there when the exploration is done (runco, 2007, p. 53). Taylor (1999) suggests that parents should allow children at an early age to exercise autonomy and independence, thus allowing for high originality that might express itself as non-normative or unconventional ideas and unrealistic perceptions such as imaginary friends and other worlds. furthermore, csikszentmihalyi and others (csikszentmihalyi & csikszentmihalyi, 1993; csikszentmihalyi, rathunde, & Whalen, 1993) found that young people from backgrounds that were both stimulating and supportive enjoyed learning which led to higher levels of creativity. lastly, runco (2007, p. 59) clarifies that the implicit theories (i.e., beliefs about creative expression) held by role models including parents, teachers, and mentors, may establish bias, affect, and resource allocation. parental theories that value creativity and divergent thinking may positively influence the young.

consistent with the notion of permissive environments, other research (raina, 2003; runco, 2007; Walters & Gardner, 1984) focuses on “crystalizing experiences”, particular moments that occur in childhood. This phenomenon occurs when a child’s self-nurtured interest in a domain becomes explicit and deliberate, often stimulated by direct exposure to particular materials such as a simple yet fascinating toy, a stimulating book, a series of discarded objects, etc. These important exposures can give children a lasting sense of creative interest, direction, and identity.

Communal Networks.

To a certain degree, creative individuals may arise from communal networks that provide both sup-port and access to domain knowledge. Many research-ers agree that creative agency is a feature of systems rich in formal education institutions and actors such as teachers, mentors, friends, and other community mem-bers (csikszentmihalyi, 1999; feldman, 1999; feldman & Goldsmith, 1991; Gardner, 1993a; Goldsmith, 1990; Gruber & Wallace, 1999; Wallace & Gruber, 1989). for example, recent research (hoxby & avery, 2012) on low SeS populations in the united States revealed that many high-achieving students who were low-income tended to not apply to selective universities. The authors noted that this may be the result of insufficient networks that do not bring these students in contact with teachers or others who have attended a selective educational institution. for creative or divergent thinking adults, it is important to have a network of peers who supply both domain-specific critical input and feedback as well as career possibilities (amabile, 1983, 1985, 1990; Kasof, 1995a, 1995b). inter-esting, while creative adults often have difficulty making close and lasting friends, they often need and experi-ence strong and supportive relationships before creative breakthroughs. however, after the creative discovery, the relationship may lapse or even dissolve (Gardner, 1983). This is consistent with other research that shows highly divergent thinking actors tend to be less social-ized (edgell, 2007). for children, teachers, mentors, and guides may take on the role that expert peers play in the networks of creative adults. furthermore, creative children may generally have different social experiences. in a hong Kong based study, popular children who made friends easily were judged, by teachers and peers, to be the most creative (lau & li, 1996). however, that same study showed that “controversial children”, a group that was both loved and hated by different peer groups, scored higher than average for creativity.

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National Systems, Institutional Change and Policy Implications Framework

although the locus of this research has been to review the micro processes that support the development of divergent thinking individuals, it is important to summarize the most relevant national systems research. Such scholarship provides insights about the macro systems needed to either complement or support effective micro processes. csikszentmihalyi (1999, p. 322) delineated a framework for evaluating broad social or macro factors that impact the incidence of creativity. his systems view suggests that countries with tolerant or permissive normative social influences that embrace diverse behaviors tend to generate more novelty. This is supported by a considerable body of research (florida, 2002; florida & Gates, 2003; hannerz, 1996; Stolarick & florida, 2006). also, countries with complex social systems that are rich with differentiation and integration provide more fertile environs for divergent thinking individuals to flourish. at the national level, differentiation refers to the degree of specialization and competition for resources spread across the population. integration is defined as the degree to which the population shares cultural symbols, engages in collective rituals, holds shared norms, accepts as legitimated the political structures, and tolerates inequalities when correlated with talent distribution (Turner, 1981). in terms of effective economic systems, it seems that mercantile forms, as opposed to rentier arrangements that tend to resist change, may encourage divergent thinking (csikszentmihalyi, 1999, p. 322). accordingly, mercantile economic forms coupled with inclusive political institutions, as opposed to extractive institutions, (acemoglu & robinson, 2012) might favor high degrees of mobility and productive conflict that yield greater opportunity for creative experiences. research indicates that task (e.g., content-based) conflict, as differentiated from relationship and process forms of conflict, is essential for the development of creative outcomes (Bezrukova, jehn, & Zanutto, 2001; edgell, 2007; jehn, 1995; jehn, northcraft, & neale, 1999; Van dyne & jehn, 1998).

Given the scholarship about highly divergent thinking actors, the developmental needs of creative children, and effective national systems, what can governments do to foster the flourishing of creative and entrepreneurial individuals? evidence from developing nations suggests that some of the behaviors consistent with the personality factors described above may be viewed as non-normative and socially less acceptable (choe, 2006; csikszentmihalyi, 1999). Since highly divergent thinkers score low for socialized and are predisposed to expressing authentic points of view or “psychological androgyny” (cook, 1985), it would be no surprise to learn that they face intolerance and repression in collectivist societies that value conformity (house, 2004; javidan, dorfman, de luque, & house, 2006). however, Soriano de alencar, fleith, and Martinez (2003) studied latin american college students and teachers and revealed that respondents ranked “social repression” as the least problematic of four principle barriers. in contrast, respondents cited perceived lack of time or opportunity as the most difficult barrier followed by shyness and inhibition next then lack of motivation (preiss & Strasser, 2006; Soriano de alencar et al., 2003). if time and shyness coupled with inhibition are the most difficult challenges to creativity faced by young adults, then perhaps policies and programs aimed at these challenges would provide fertile conditions for creativity that feeds entrepreneurial activity. however, what sort of programs policies or institutional initiatives might accomplish these aims?

in the united States, a variety of government funded mentoring programs target at-risk youth in high poverty areas with conditions that, to a degree, resemble those seen in developing countries. Target children often demonstrate a range of risky behaviors, from aggression to depression. The most successful of these programs are intensive with at least four hours of contact weekly year-round (not just during the academic year) and persist throughout the students’ entire formal education years (Bornstein, 2011; duBois & Karcher, 2005). other social initiatives such as the burgeoning green schools movement aim to improve the environments that children experience (chapman, 2012). This initiative aligns with other research in the united States which indicates that the physical settings, such as classrooms, may have a greater impact on creative development than previously believed by experts (dudek et al., 1993). of particular interest are non-profit programs such as artists for humanity (afh) whose mission is to educate underserved city youth while providing them with paid employment in the arts as a means to self-sufficiency (anonymous, 2007). it is afh’s core belief that the creative process as realized through the arts can be both a life transforming and an economic rewarding experience for the young. other historical educational programs, such as the future farmers of america, have focused on providing youth with both practical skills and leadership capabilities (Weiler & Woodin, 1975). Similar programs might be effective for youth in highly agrarian regions of developing countries.

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assuming that the cognitive and developmental needs discussed above have been satisfied, traditional economic mechanisms might be a useful complement to encourage entrepreneurship and could become, despite being aimed typically at adults, a source of inspiration and motivation for young would-be entrepreneurs and innovators. for example, microfinance programs (Karmakar, 2008) and various technology transfer infrastructure initiatives (lall, 2001; ockwell et al., 2010; ray, 2012; Sharif & Baark, 2008; Yülek & Taylor, 2012) have, in varying degrees, proven effective. Korea provides a robust developing country case study of how national incentive strategies can encourage the development of a particular field of creative endeavor. choe (2006) describes how the Korean government used a four-pronged policy approach to develop the highly creative iT sector: industry subsidization; repatriation incentives targeted at Korean talent that had moved outside the country; loss guarantees that encouraged risk-taking; and establishment of multi-rival competitive markets.

at the national level, change and transformation is difficult perhaps since institutions often arise in response to the social need for stability, integration, and transmission. however, there is growing consensus among scholars that institutional change is not only possible, but also predicted and expected through gradual processes (Battilana, leca, & Boxenbaum, 2009; Boxenbaum & rouleau, 2011; duymedjian & rüling, 2010; Mahoney & Thelen, 2010; pettigrew, Woodman, & cameron, 2001). The patterning and re-patterning of human behavior is a slow process fraught with continuous struggle among diverse constituencies. The discursive and, to some degree, the sociological views of institutionalism provide gradual institutional change approaches. discursive theory suggests that institutions incrementally change in response to slowly emerging and shifting social ideas and values (peters, 2012, p. 120). of importance to discursive change is the individual agent or “bricoleur” (carstensen, 2011; Garud & Karnøe, 2003; lévi-Strauss, 1967; peters, 2012) who works through a “processual” (pettigrew et al., 2001) approach to change. The bricoleur works to build “advocacy coalitions” that broker policy ideas among various epistemic communities such as professional associations (peters, 2012, p. 117). These advocates stimulate institutional “coordinative” and “communicative” discourses around new ideas and value. change occurs gradually as actors’ schemas and scripts are slowly transformed (hargadon & douglas, 2001). Coordinative discourses refer to internal discussions and debates about guiding ideas and values among official members of an institution. Within intuitions, bricoleurs work to introduce new ideas and conceptions that subtly vary from existing understandings and meanings with the aim of reprioritizing ideas and values. Communicative discourses occur outside the institution’s formal boundaries and take place among the various social constituents and other relevant institutions. outside institutions, bricoleurs deploy social skill to form broader coalitions that frame and reframe issues that fuel social movements (fligstein, 2001; fligstein & dauter, 2007; fligstein & Mcadam, 2012). it is important to note that not only are actors’ understandings transformed during this process, but also so are the ideas, values, and visions discussed.

other approaches that might yield interesting localized initiatives beyond those discussed above include forms of appreciative inquiry (cooperrider, Whitney, & Stavros, 2008; holman, devane, & cady, 2007) such as positive deviance (pd) (pascale, Sternin, & Sternin, 2010). pd assumes that the solutions to complex social challenges for a given culture may be positively embedded in a small sample of the population. accordingly, those who use pd go about discovering, through meetings and careful analysis of local data, the few outlier exemplars (those who have far exceed the given expectation for a particular problem) and then comparatively determine the unique practices or what has worked well for that exceptional sample. These findings or “bright spots” (heath & heath, 2010) are diffused, often through discursive practices, so that they become the new behavioral norm for the entire population. Bricoleurs could use this method to seek out and learn from exemplar young entrepreneurs and innovators as a basis for social change.

To guide policy makers and would-be bricoleurs, i have developed a framework (see Table 1) that lists the critical antecedents, derived from the research discussed throughout the paper, and identifies corresponding discursive change strategies (e.g., coordinative, communicative, and advocacy) and focal discussants (i.e., constituencies that should be central to the discussions). Whereas coordinative discourses will follow the forms and genres that are permitted or possible within the institution, broader communicative discourses may take several forms ranging from awareness-raising through media (e.g., documentaries, advertising, social media, etc.) to community outreach through in situ forums to educational programming as discussed above. although advocacy primarily takes place in the environments external to the institution’s boundaries, it should be kept in mind that such actions may build into social movements that exert pressure on the institution, its members, and their coordinative discourses.

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TABLE 1. National Entrepreneurial Capacity Development: A Framework for Institutional Change

Perspective Antecedent Consideration Discursive Change Strategy

Focal Discussant

Cognitive

Individual personality and divergent thinking style• avoiding premature convergence• experiencing freedom from social normative expectations

(psychological androgyny)• Keeping arousal levels low• deploying wide attention deployment strategies

coordinative and advocacy

Governing and educational bodies

Developmental

SES• developing family resource allocation strategy that favors

creative child• realizing potential of lower SeS, but not impoverishment • providing slack mental and physical energy

communicative families

Parenting• expressing high parental creativity, especially paternal • demonstrating parental domain interest and focus• developing strong maternal dyad • enabling diverse experiences and permissive environ-

ments• forming healthy attachment• encouraging parent’s implicit theories of creativity to fa-

vor divergent thinking• enabling crystalizing experiences

communicative families

Local communal networks• having teachers and mentors’ implicit theories of creativ-

ity favor divergent thinking• having teachers, mentors, and guides act as expert peers• enabling tolerance of “controversial” children

communicative and advocacy

communities and educational bodies

National Systems

Social• enabling tolerant or permissive normative social influ-

ences• providing differentiated and integrated social system• encouraging mobility and task conflict• creating mentoring and educational programs• discovering and diffusing “what works well” (ai/pd)

coordinative, communicative, and advocacy

all (varies per situation)

Economic• Being mercantile• offering microfinance options• having technology transfer infrastructure• providing incentive programs

coordinative, communicative, and advocacy

Governing bodies and business entities

Political• Being inclusive and discursive

coordinative, communicative, and advocacy

all (varies per situation)

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Conclusion

The dominant rational choice and economic institutional theory has contributed to a greater understanding of how institutions function within society. however, this extant literature has lacked insight about the behavioral particulars that enable sustainable opportunity for those in society who often are most at employment risk. drawing from interdisciplinary literature that includes cognitive and developmental psychology, societal influences, and discursive and sociological institutional theories, i argue that embedded macro and micro processes are essential antecedents for nations who wish to enable sustainable opportunity for many of its young constituents. My paper outlines a discursive approach to institutional change and proposes an integrated framework for entrepreneurship that systemically highlights the collective importance of personality and divergent thinking style, social economic status, parenting, local communal networks, social systems, economic systems, and political systems.

however, my framework has limitations. interdisciplinary research, by its very nature is broad and challenging given the limitations that arise from discipline differences in vocabulary and research methods. despite these limits, i have endeavored to derive, from diverse literature, those developmental factors that logically predict positive creativity and innovation outcomes. Yet my assertions and assumptions may warrant further investigation, input, theoretical development, and empirical analysis. for example, while i have attempted to use research that is grounded in the specifics of developing nations, not all interesting and relevant topics have been thoroughly researched in the settings of developing countries (henrich, heine, & norenzayan, 2010; pfeffer, 2007). additional localized empirical research would be an invaluable complement to this work.

in conclusion, my framework widens institutional discourse to include a deeper understanding of developmental behavior processes that support creativity, innovation, and entrepreneurship. policy makers and association members may find my research useful as a broad systemic basis for stimulating discourses about social and institutional change and understanding the discursive means by which the institutional policies, social life, and national systems may be changed to better support creativity and innovation outcomes at the country level. for practitioners working in firms, i believe this research and framework is useful since it provides a language for discussions and advocacy about creativity, innovation, entrepreneurship, policy, and social consequences. in particular, this information sheds light on a previously underexplored area and suggests that developmental and behavioral processes do matter, especially when considering consequences to a broad array of stakeholders. i hope my paper sensitizes both researchers and others so that they become more aware of the relationships among developmental and behavioral antecedents, institutional change strategies, and social outcomes.

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Elena Kasimovskaya, Associate Prof., PhDMaria Didenko, MA student

AbstractThis paper deals with the problem of measurement in the field of two well-known concepts – international

competitiveness and sustainable development. The authors developed a methodology for composite index construction of Sustainable competitiveness and created the world picture, showing potential for long-term development of different countries.

correlation analysis conducted for 105 countries has revealed a link between the indicators of sustainable development and national competitiveness and the level of country’s development. newly constructed index encompassed global competitiveness index adjusted for the value of environmental performance index. an industry value added criteria was used for countries’ aggregation. in addition to the new rankings of countries, the index is of particular interest when considering countries in terms of per capita income: the data revealed a polynomial dependence of the authors’ sustainable competitiveness index on Gdp per capita, which allowed pointing out the most promising countries in the world.

Key Words: International Competitiveness, Sustainable Development, Sustainable Competitiveness, Global Competitiveness Index, Environmental Performance Index, Global Rankings, Sustainability Measurement.

International Competitiveness and Sustainable Development: are they apart, are they together? A quantitative approach.

Technology and globalization have accelerated thetrend towards a world, which is not only open, but also

transparent and immediate. Enterprises now benefit froman enormous choice in selecting their business locations.

Consequently, nations need to promote their respectivecomparative advantages in various areas.

(IMD World Competitiveness Yearbook 2013)

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Executive Summary.The contemporary world is changing very fast

and the rate of this change is speeding up. how will it look in 25-50 years? Who will be at the top? This paper represents an attempt to assess the current situation in the world by using two well-known concepts – the theory of international competitiveness and the model of sustainable development. The authors argue that on the country level a long-term effective development is not possible without both preserving natural resources at home and successfully competing on the international arena. The purpose of this research is to create and test a quantitative approach for measuring countries’ sustainable competitiveness and as a result to set up the world map which will give an inclination of every country’s potential in terms of long-term development.

The hypothesis tested in this paper is:There is a connection between the overall level of

country’s development and its sustainable competitiveness.The overall level of development of a country

is measured by Gdp per capita based on purchasing-power-parity. To evaluate sustainable competitiveness the authors construct a composite index, based on two indices – the index of international competitiveness (Gci –Global competitiveness index) and one of the possible sustainable development indices (epi – environmental performance index).

To prove the hypothesis the authors are consequently testing the relations between Gdp, epi and Gci. The article suggests a new approach to the construction of the aggregate index of Sustainable competitiveness (Sci). Based on Sci, all countries, covered by the research, are ranked and the world map is constructed.

IntroductionSince the 90s international organizations and

agencies, such as World Bank, iMf, un etc., have been publishing various surveys and reports concerning the indicators of sustainable development and national competitiveness for different countries. The World economic forum (Wef) produces one of the best known competitiveness indices – the Global competitiveness index (Gci). The forum defines national competitiveness as the ‘set of institutions, policies and factors that determine the level of productivity of a country’. The scientists underline different levels of the approach to this problem – micro-level, presented mostly by the methodology of firms ‘competitiveness analysis, and macro-level, usually used for the international comparisons.

in 2011 the eu directorate-General for regional policy suggested a new approach – that one of the regional competitiveness – and has developed a regional competitiveness index (l. dijkstra, p. annoni, K. Kozovska, 2011). under the regional framework a region is considered to be neither a simple aggregation of firms nor a scaled version of nations. The competitiveness of a territory is defined as the ability of a locality or region to generate high and rising incomes and improve the livelihoods of the people living there.

But all concepts and approaches mentioned above, tried to compare the countries/territories only in one dimension – the competitiveness or the sustainable development. The attempts to encompass both concepts are relatively recent. The latest Global competitiveness report (2012) and a research by South Korean agency Solability (2012) have presented new sustainable competitiveness indices. Yet as all authors admit there is still a long way to go to finding the combination of factors & methods that will give the true picture of sustainable competitiveness.

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Theoretical Background: two core concepts and the problem of measurement.

The term “international competitiveness” is associated first of all with the name of Michael porter (1990) and his famous book “The competitive advantage of nations”, also known as porter’s diamond theory. later porter and esty suggested merging the concepts of sustainable development and competitiveness (esty & porter, 1998). This paper represents an attempt of such iteration.

The measurement of international competitiveness is one of two cornerstones of this research. at present there are two most notable world indicators and countries’ rankings – the first provided by the World economic forum, in its Global competitiveness report, and the second presented by the institute for Management development, in its World competitiveness Yearbook (2013). The regional dimension of the international competitiveness, recently developed by eu, repeats the general logics of the composite index construction.

as for the common logics of composite index construction in social sciences – it was developed by lazarsfeld in 1958 (lazarsfeld 1958). currently this methodology is widely used by scientists and researchers all over the world. according to lazarsfeld, there are several successive phases of the composite indicators’ construction:1. concept conceptual analysis;2. dimensions identification and selection of variables;3. indicators measure;4. Weighting5. aggregation6. index

it is obvious that researchers could have different opinions concerning each of the above-mentioned stages, which, as a result, will affect the index construction and the comparisons, based on it. each approach originates from some assumptions, presupposes biases and contains its own strengths and weaknesses.

for example, the World economic forum calculates the index of global competitiveness (Gci) based on 9 variables, such as: institutions, infrastructure, macroeconomics, health and primary education, higher education and training, market efficiency, labor markets, financial markets, technological readiness, business sophistication, innovation. eu regional competitiveness index (rci) modifies the approach of the Global competitiveness index of the World economic forum. it consists of eleven pillars grouped in three groups: basic, efficiency and innovation. it takes into account the level of development of the region by emphasizing basic issues in

less developed regions, and innovative capacity in more developed regions ( l.dijkstra and others, 2011)

The construction of the indices, the measurement procedure and the countries’ coverage are highly debated by academicians and politicians, especially concerning the global forecasts. Thus, j. Walter (2005) identifies three main reasons for criticism of Gci index: weak theoretical economic base; unreliable statistical methods and predictions based on the criteria that the authors themselves are constantly changing. constant change in the composition of the index from year to year, the growing number of countries, various methods of calculations – they all make it impossible to construct reliable time-series and to evaluate the dynamics of changes for both: one selected country, and for the world as a whole. The recent attempt to evaluate the comparative shifts in the international competitiveness for the period of 1997-2013 and to construct a kind of competitiveness roadmap for the world was made by iMd (iMd World competitiveness Yearbook 2013).

The lack of social and environmental data when calculating a country’s competitiveness, which is also recognized by the experts of the World economic forum, leads to the idea of creating an indicator of a new kind – Sustainable competitiveness index (Sci), – which will include the above mentioned factors.

The measurement of sustainability is still a disputable point for scientists all over the world. currently there exists a wide range of indicators, which reflect different aspects of sustainable development, such as the undp human development index, the iSeW (index of Sustainable economic Welfare) created by daly and cobb (1990), the Gpi (Genuine progress indicator, (see Talberth et al, 2006), the Mdp (Measure of domestic progress, jackson, 2004), the index of economic Well-being created by Sharpe and osberg (2002), the hWi (human Wellbeing index prescott-allen, 2001), happy planet index (2006), The ecological footprint index, “emergy Sustainability index” (eSi) by M.Brown and S.ulgiati, etc. To have a reliable critical overview of the main sustainability indicators and their creation process one could address the article by p.-M. Boulanger (2008) “Sustainable development indicators: a scientific challenge, a democratic issue”.

at present the concept of sustainable development implies a balanced combination of economic, social and environmental development (Munier n., 2005, inclusive Wealth report, 2012).

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as global competitiveness index (Gci) has already been chosen as an economic component for the construction of the final index, further only social and ecological dimensions in sustainability indicators will be commented on.

The theoretical content of the social dimension of sustainable development is relatively little described in the literature. Thus, many authors (eames, 2002, colantonio, 2006, McKenzie, 2004, Murphy, 2012) emphasize the lack of integration of social issues in the context of sustainable development, as well as indicate the need to further develop the theoretical framework on the issue. The authors of this paper had to accept this limitation: at this stage of the research not to include any social component into their sustainable competitiveness index.

as for the ecological component – environmental performance index (epi) was selected, which creation, features, advantages and limitation are described below.

in 2006 in conjunction with columbia university, Yale university developed environmental performance index (epi), which includes 22 indicators. The index assesses the environmental changes and allows outlining the strengths and weaknesses of different countries within two aspects: the reduction of adverse environmental impacts on human health and the development of proper use of natural resources to maintain the stability of ecosystems. Main disadvantages of this index are mostly connected with the lack of variables, which could measure recycling, climate change, drinking water quality, desertification, etc., i.e. those factors that yet have to be measured accurately in most of the countries.

The authors of this research rely on this approach when measuring the sustainability of development. Statistics are taken from the site of Yale center for environmental law and policy Yale university, new haven and Yale university center for international earth Science information network columbia university.

When constructing a composite index the authors of this paper follow the general methodological approach, developed by lazarsfeld. The hard data from Wef is used, but the components of the final index and the process of aggregation are different. The paper represents the attempt of the international comparative statics analysis, mostly based on data for 2010.

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Methodology of the construction of Index of Sustainable Competitiveness.

Briefly the suggested approach consists of two components:• analytical component: a) The analysis of the expert opinion survey, the

identification of the average weights of the components for the final index for all the selected countries;

b) choice of a sampling criterion that will define the shift in expert opinion derived weights.

• Mathematical component: a) Bringing the components of the final index to the

same dimension; b) calculation of the required shift in each group of

countries, the adjustment of weights, obtaining the final value of the index.

as far as weighting and aggregation of the data need to be explained more deeply, let’s look at the procedure step by step.1) Selecting the components for the final index of

sustainable competitiveness (Sci): in theory, Sci should be a combination of indicators,

such as: global competitiveness, environmental and social sustainability. in this paper, due to the above-mentioned lack of countries’ data and indicators of social sustainability, Sci is constructed with the environmental component only.

in order to select environmental component for the final index an analysis was performed to assert compositions of available indices for adequacy of coverage of environmental indicators, the country sample and match components with components of the global competitiveness index. as a result, the choice was made in favor of the environmental performance index (epi), developed by the university of Yale.

2) The country sample: country selection is primarily determined by the

availability of data, i.e. the presence of both index values (global competitiveness and environmental performance index) for each country (113 countries).

as an additional criteria population size was selected: countries with a population of less than one million people (luxembourg, Brunei and iceland) were not included in the final sample.

3) Bringing the components to one dimension: When constructing an additive index of sustainable

competitiveness there is not only a question of the components’ weights, but also of their dimensions. environmental efficiency is measured on a scale of 1 to 100 and global competitiveness on a scale of 1 to 7. for convenience, we present the latest on a scale of 1 to 100.

4) The method of peer review: a questionnaire has been compiled in order to obtain

expert opinion weights for the components of the future sustainable competitiveness index. data processing and sequential analysis are performed to determine the average weights of the final index components for the entire array of countries: 70% for global competitiveness index and 30% for environmental performance index.

5) choice of criteria for countries’ aggregation: The heterogeneity of the countries in the general

sample indicates that it would be wrong to give the same weights to the final index components, regardless of the specific country.

as it is noted in iMd World competitiveness Yearbook: “Nations thrive on prosperity, a concept that we

define as “economic growth” plus “something else” that is less economic and measurable. The latter goal evolves with the economic and social development of a country: a poorer nation may emphasize access to food and shelter for its population, a more advanced economy may give priority to environmental protection or education. in both cases however, economic growth remains a prerequisite, a condition that is necessary but not sufficient.”(iMd World competitiveness Yearbook, 2013, appendix 3)

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Thus, countries’ grouping, which could adjust the weights obtained by peer review, is necessary. ideally, the criteria should be an indicator that affects both components, but in a different direction. The authors of this research assume that it could be industry Value added (iVa): when industry value added is big, the country’s competitiveness will be high, however, the damage to the environment will be more too, and hence the index of environmental performance will be lower. conversely, a low iVa indicator means the competitiveness of the country will be lower, but the environment will suffer less, therefore environmental performance will be higher. The value added indicator could also be used as a kind of barometer of country’s overall productivity and a mean of the split and aggregation of the countries. The authors proved this assumption by epi/Gci ratio, which is increasing, when we move from the most developed economies (in terms of industry value added) to the least developed ones (table 1 of the appendices).

Table 1. epi/Gci ratio.  group 1 group 2 group 3 group 4

EPI average 57.38653846 53.9453125 54.4575 51.1973913

GCI average 68.08441002 62.40236803 56.58607753 53.31551774

EPI/GCI 0.842873404 0.864475407 0.96238337 0.960271858

Sorces: www.wef.org; www.epi.yale.edu; authors’ calculations.

Because of the lack of data Greece, israel, Kuwait, Qatar and oman were excluded from the general sample. Thus, only 105 countries are left.

6) Grouping of countries into relatively homogenous groups. first, all countries are ranked in terms of industry value added. Based on the fact that, to obtain statistically significant

results, the preferred size of each group is at least 20 countries, the first 19 countries and the last 20 of the rankings are put into the first and last groups respectively in advance.

Then, for each country, which for now doesn’t belong to any group, the difference between its industry value added and industry value added of the country, next in the list, is calculated. all countries in the sample are ranked in decreasing order depending on the size of these differences. Thus, it is the ranking of the countries, after which in terms of industry value added follow the countries with the largest gap before them. That is, to comply with the idea of homogeneity, ideally each of the groups should end on the leading country in the rankings. however, it is also necessary to take into account previously agreed minimum group size.

The leader of the «gap rankings» is iran, the first group then is made up of 26 countries. next the rankings should be «cleaned»: all countries that will cut less than 20 countries into the second group are removed. next first country in the rankings is ecuador, which leaves 32 countries in the second group. The subsequent «cleaning» of the rankings gives the following border – latvia. in the end there are four groups with sizes of 26, 32, 24 and 23 countries. The groups with corresponding iVa can be seen in Table 32.

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Table 2. The country groups.

C ountr y name I VA C ountr y name I VA C ountr y name I VA C ountr y name I VAChina 2770657993125 Sweden 106437031900 Dominican Republic 15233815502 Cyprus 4297982296USA 2689500000000 Argentina 104620348779 Sri Lanka 14587546436 Panama 4134218153Japan 1495521758943 Malaysia 101428185159 Croatia 13614424301 Bosnia and Herzegovina 3819327470Germany 821539473684 South Africa 101177508881 Slovenia 12901612483 Honduras 3772290339Brazil 514914873989 Austria 98966972368 Bulgaria 12102999221 Paraguay 3742267042Italy 462101963297 Algeria 94871358605 Trinidad and Tobago 11854442344 Namibia 3039519921Russia 453528557414 Colombia 91819402379 Guatemala 11177434948 Armenia 2995620623Canada 453110473834 Belgium 90552631579 Lithuania 9141047462 Senegal 2592024792France 450550995148 Chile 78654937960 Uruguay 8945637533 Ethiopia 2538001882India 439683437918 Egypt 78330264411 Costa Rica 8671989302 Cambodia 2458529008UK 435420000000 Libya 67569221968 Serbia 8586434176 Jamaica 2413045349South Korea 353898803168 Nigeria 66749453322 Lebanon 7326036484 Zimbabwe 2296380493Mexico 344236648162 Philippines 65002859630 Jordan 7104407913 Macedonia 2291899147Indonesia 332649235643 Czech Republic 64971047120 Botswana 6401225356 Nepal 2272377247Spain 328430263158 Ireland 64190119118 Côte d'Ivoire 6238932689 Georgia 2248081787Saudi Arabia 269362133333 Finland 59827631579 Cameroon 6176338258 Mongolia 2048846475Australia 208946208889 Kazakhstan 59581172314 Bolivia 5923201425 Mozambique 1974550312Venezuela 190636711959 Denmark 58832562278 Ghana 5795845635 Nicaragua 1867649708Turkey 172354056259 Romania 58770949369 Zambia 5735479200 Albania 1622638912Netherlands 165327631579 Singapore 56015171134 El Salvador 5310400000 Kyrgyzstan 1256604550UAE 165268078240 Peru 50561302826 Kenya 5231522299 Tajikistan 1116935115Norway 149178476821 Portugal 45854868421 Tanzania 5127278173 Benin 866873424Thailand 142404933456 Viet Nam 43736562871 Estonia 4740218421 Moldova 637940208Switzerland 135482647856 Pakistan 42549423374 Latvia 4690564615Poland 130777777778 Ukraine 37691102669Iran 125701667207 Hungary 33750240454

Azerbaijan 31130380614Slovakia 27725827815Bangladesh 27617797660New Zealand 25066883117Morocco 24245121955Ecuador 20908599000

G R OUP 1 G R OUP 2 G R OUP 3 G R OUP 4

Sources: www.imf.org, authors’ calculations

7) adjusting the weights: after the division of the countries using the selected criteria, weights for each group are determined. The method of

deviation averages is used. We calculate the average values of global competitiveness index and environmental performance index for all the

countries in each group and compare them with the averages for the whole sample. Then, the resulting deviations are put together and distributed equally between the two components to adjust expert estimated weights.

8) construction of the final index: The thus-obtained weights are applied to countries depending on a particular group they belong to. Table 3 illustrates

all the calculations made according to the described above methodology on the example of group 1. The procedure is similar for each group. unfortunately, the size of the article does not allow to publish all calculations for all countries of the sample and for each group. The results of Sci calculations for all countries can be seen in Table 4 (appendices).

Table 4. Sci scores and country rankingsRank Country name SCI   Rank Country name SCI

1 Switzerland 78.96717422 54 Guatemala 56.104895

2 Sweden 76.07873 55 peru 56.06083455

3 Germany 73.02897635 56 romania 55.97270922

4 finland 72.84405505 57 Mexico 55.67498111

5 uK 72.60670003 58 el Salvador 55.63105068

6 denmark 72.11798369 59 azerbaijan 55.58808518

7 norway 72.08064838 60 Georgia 55.55031863

8 netherlands 72.06954474 61 jordan 55.27015082

9 france 71.58291458 62 Macedonia 55.19543191

10 austria 71.51330867 63 honduras 54.96308532

11 japan 71.48572058 64 jamaica 54.91005425

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Rank Country name SCI   Rank Country name SCI

12 Singapore 71.41249981 65 ecuador 54.78584889

13 Belgium 69.49614193 66 russia 54.63184782

14 uSa 69.37552159 67 Turkey 54.46872618

15 canada 68.95727605 68 Morocco 54.35818323

16 new Zealand 68.92362191 69 Trinidad and Tobago 54.1247824

17 Malaysia 67.49387847 70 algeria 54.04068026

18 australia 66.60454044 71 lebanon 53.32570182

19 South Korea 65.25687532 72 South africa 53.21668625

20 czech republic 65.12461593 73 Moldova 53.06778391

21 italy 64.93243232 74 dominican republic 52.97266458

22 ireland 64.91627236 75 nicaragua 52.79639588

23 poland 64.04132222 76 ukraine 52.78494769

24 costa rica 63.58311587 77 iran 52.72203176

25 chile 63.37635423 78 Bolivia 52.66744248

26 lithuania 63.30754146 79 cambodia 52.58909179

27 estonia 63.20935705 80 Serbia 52.47885513

28 Slovenia 62.94109248 81 armenia 52.37015665

29 cyprus 62.82890728 82 Benin 52.20370951

30 Thailand 62.68997215 83 Venezuela 52.06600779

31 Spain 62.67357305 84 Zambia 51.98115626

32 Saudi arabia 62.58518333 85 india 51.81786726

33 Slovakia 62.55418787 86 Mongolia 51.79190241

34 uae 62.44099515 87 Tanzania 51.73711931

35 latvia 62.1485009 88 Kenya 51.32224376

36 Brazil 61.08423542 89 Senegal 51.26865375

37 portugal 60.99259815 90 Kazakhstan 50.75328553

38 panama 60.97751847 91 ethiopia 50.67233186

39 hungary 60.34933436 92 paraguay 50.43056958

40 colombia 60.16205378 93 nepal 49.92102957

41 uruguay 59.533569 94 Ghana 49.90883204

42 croatia 59.43082404 95 Bosnia and herzegovina 49.4550506

43 Sri lanka 59.33502647 96 côte d’ivoire 49.38053417

44 indonesia 58.98734496 97 Bangladesh 49.09143266

45 china 58.58599547 98 Kyrgyzstan 49.05642632

46 albania 58.35556165 99 cameroon 48.92506138

47 Bulgaria 58.23488071 100 libya 48.49671482

48 Viet nam 57.81117059 101 Tajikistan 47.97531311

49 philippines 56.80736928 102 Mozambique 47.56246319

50 Botswana 56.76582947 103 pakistan 46.57801187

51 namibia 56.73481919 104 nigeria 45.69211812

52 egypt 56.4930665 105 Zimbabwe 45.25124597

53 argentina 56.43712905        

Source: authors’ calculations

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Table 3. Example: Grouping procedure and final index construction.

country name epi Gci epi adj Gci adjGdp per capita ppp,

current uS $Sci

china 42.24 4.835890667 42.24 69.08415239 7553.377 58.58599547

uSa 56.59 5.431088386 56.59 77.58697694 46811.056 69.37552159

japan 63.36 5.369310482 63.36 76.70443546 34280.079 71.48572058

Germany 66.91 5.387120686 66.91 76.95886694 36172.675 73.02897635

Brazil 60.9 4.284179197 60.9 61.20255996 11216.095 61.08423542

italy 68.9 4.366899335 68.9 62.38427621 29817.106 64.93243232

russia 45.43 4.237919109 45.43 60.54170156 15687.183 54.63184782

canada 58.41 5.301185836 58.41 75.73122623 40223.538 68.95727605

france 69 5.126924754 69 73.2417822 33959.535 71.58291458

india 36.23 4.328038334 36.23 61.82911906 3378.146 51.81786726

uK 68.82 5.252708617 68.82 75.03869453 35708.024 72.60670003

South Korea 57.2 4.93019622 57.2 70.43137457 29717.179 65.25687532

Mexico 49.11 4.192392166 49.11 59.89131666 13945.353 55.67498111

indonesia 52.29 4.430208351 52.29 63.28869073 4353.813 58.98734496

Spain 60.31 4.493409855 60.31 64.19156936 29751.366 62.67357305

Saudi arabia 49.97 4.948106768 49.97 70.68723954 27313.872 62.58518333

australia 56.61 5.111644871 56.61 73.02349816 39674.441 66.60454044

Venezuela 55.62 3.484842833 55.62 49.78346904 12280.678 52.06600779

Turkey 44.8 4.247490161 44.8 60.67843087 13293.919 54.46872618

netherlands 65.65 5.333473202 65.65 76.19247431 40888.008 72.06954474

uae 50.91 4.889271478 50.91 69.8467354 45759.383 62.44099515

norway 69.92 5.142782193 69.92 73.46831704 52034.15 72.08064838

Thailand 59.98 4.510130942 59.98 64.43044203 9215.488 62.68997215

Switzerland 76.69 5.630077683 76.69 80.42968119 43156.721 78.96717422

poland 63.47 4.50857763 63.47 64.40825186 18961.841 64.04132222

iran 42.73 4.139756481 42.73 59.1393783 12789.166 52.72203176

average 57.38653846 68.08441002

average before

grouping54.31257143 60.48945911

deviation -0.056597708 -0.125558255

weights deviation 0.091077981 -0.091077981

weights 0.391077981 0.608922019

Sources: www.imf.org; www.epi.yale.edu; www.wef.org., authors’ calculations.

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Findings: Sustainable Development, International Competitiveness and GDP per capita

The matrix (fig. 1), constructed in the dimension of epi and Gci, shows quite obviously that there is no necessary trade-offs between national competitiveness and environmental sustainability. The value of pearson’s coefficient for epi and Gci is 0,537, which means positive moderate relation, while the value of Spearman’s coefficient (0,532) shows that the relation is linear, but no clear patterns could be identified. The graph shows the country-spread.

Figure 1. GCI & EPI correlation.

Source: authors’ calculations

in some sense this conclusion coincides with this one of Wef:“There are no necessary trade-offs between being competitive and being sustainable. The analysis found a

positive correlation across the three dimensions of competitiveness and social and environmental sustainability” (Global competitiveness report 2012-13, p.57). The difference is that the last one included the social component of sustainability.

pearson’s coefficient for Gci and Gdp per capita equals 0,877, which represents a strong positive relation; while Spearman’s coefficient (0,852), also concludes that the relation is linear (fig. 2)

Figure 2. GCI & GDP per capita correlation

R² = 0.7699

3

3.5

4

4.5

5

5.5

6

0 10000 20000 30000 40000 50000 60000

GC

I

GDP per capita

R² = 0.3223

30

40

50

60

70

80

0 10000 20000 30000 40000 50000 60000

EP

I

GDP per capita

Source: authors’ calculations

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as for epi and Gdp per capita, the relation is only moderate but still positive, both pearson’s and Spearmen’s coefficients equal 0,568. The country spread on the graph clearly shows that no reliable regression model can be constructed for epi and Gdp per capita (fig. 3).

Figure 3. EPI & GDP per capita correlation.

R² = 0.7699

3

3.5

4

4.5

5

5.5

6

0 10000 20000 30000 40000 50000 60000

GC

I

GDP per capita

R² = 0.3223

30

40

50

60

70

80

0 10000 20000 30000 40000 50000 60000

EP

I

GDP per capita

Source: authors’ calculations.

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The figure 4 reflects the overall model, describing the current world in the framework of suggested sustainable competitiveness approach. Two types of models were tested – the additive one and the multiplicative one; the additive model with the highest r2 was chosen. Both models have proved a strong positive correlation between countries’ level of economic development (measured by Gdp per capita in ppp) and sustainable international competitiveness (measured by Sci, constructed by the authors of the research).

Figure 4. SCI & GDP per capita correlation.

China

USA Japan

Germany

Brazil

Italy

Russia

Canada

France

India

UK

South Korea

Mexico

Indonesia

Spain

Saudi Arabia

Australia

Venezuela

Turkey

Netherlands

UAE

Norway

Thailand

Switzerland

Poland

Iran

Sweden

Argentina

Malaysia

South Africa

Austria

Algeria

Colombia

Belgium

Chile

Egypt

Libya

Nigeria

Philippines

Czech Republic

Ireland

Finland

Kazakhstan

Denmark

Romania

Singapore

Peru

Portugal

Viet Nam

Pakistan

Ukraine

Hungary

Azerbaijan

Slovakia

Bangladesh

New Zealand

Morocco Ecuador Dominican Rep

Sri Lanka Croatia

Slovenia

Bulgaria

Trinidad and Tobago

Guatemala

Lithuania

Uruguay

Costa Rica

Serbia

Lebanon

Jordan

Botswana

Côte d'Ivoire Cameroon

Bolivia

Ghana

Zambia

Salvador

Kenya Tanzania

Estonia Latvia

Cyprus

Panama

Bosnia and Herzegovina

Honduras

Paraguay

Namibia

Armenia Senegal

Ethiopia

Cambodia

Jamaica

Zimbabwe

Macedonia

Nepal

Georgia

Mongolia

Mozambique

Nicaragua

Albania

Kyrgyzstan

Tajikistan

Benin

Moldova

R²=0.76883

40

45

50

55

60

65

70

75

80

85

0 10000 20000 30000 40000 50000 60000

SC

I

G DP per capita PPP, cur rent US $

Source: www.imf.org, authors’ calculations

according to the methodology suggested in this article, the most promising countries in sense of a long-term balanced development are Switzerland and Sweden, followed by united Kingdom, Germany, finland, japan, france and netherlands. in fact, Switzerland also leads all alternative rankings, such as Wef and iMd ones, despite of the difference of index components and measurement approach.

Malaysia looks surprisingly good and promising, especially comparing with the uSa, South Korea and australia. Most of “oil oriented” countries (russia, Kazakhstan, Venezuela, iran, Saudi arabia, uae, etc.) demonstrate much lower than average level of sustainable competitiveness, which is a more or less expected outcome. The picture for least developed countries, mostly presented by group 3 and 4, is less obvious and needs to be considered at the by-country level.

Findings: International Competitiveness and Sustainable Development- the picture of the world

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The results of the authors’ calculations allow to construct a world scoreboard together with high-lightening both components of the sustainable competitiveness for each country ( fig. 5, appendices )

Figure 5. The World Sustainable Competitiveness Scoreboard 2010.

11

Sources: authors’ calculations.

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Conclusions.Thus, the comparative statics analysis showed, that according to the quantitative approach suggested in this paper,

there is a positive correlation between the level of the development of the country measured by Gdp per head, and the indicator encompassing national competitiveness and environmental protection: the more developed the country is, the more sustainable it is in the sense of national competitiveness.

The authors realize that the method they used has its biases and limitations and that the results received are ambiguous, especially concerning the countries with low Gdp level. The by-group analysis confirmed the above-mentioned uniformity for all groups, although the degree of the relations between variables is different. unfortunately this article does not allow commenting on all points of the results received. But the comparisons with the results of other researchers, the alternative global rankings show that there are no serious discrepancies in by-country rank for the most developed countries despite of the different approach. This fact could be considered as a confirmation of a viability of the methodology, presented in this article.

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