According to Raymond Vernon theory Essay

According to Raymond Vernon theory (Product life theory) and the examples of the developing countries performance in the supranational merchandise that where shown. These nations permit the increase of conflicting firms in their securities industry who subject a huge portion of the national firms market, as a result, of their poor competitive skills to preserve their customers.Moreover, national firms tend to participate in international markets at a moment where they are all plant saturated, for that reason it is difficult to profit from it. Under these circumstances, it is relevant to developing countries to be able to innovate (product and service) and to recognize new potential markets where they can profit.In that order, developing nations should consider what they have, in order to determine what they should produce. The theory of proportional advantage states that a expanse should produce and export those goods and service for which is relatively more(prenominal) pr oductive than are other(a) countries, and import those goods and service for which other countries are relatively more productive than it is. (Mahoney, Trigg, Griffin & Putstay, 2001, p. 102)Under this theory, a country should produce those goods and services that it is able to produce relatively well, and corrupt other goods and services from those countries that can produce them relatively well. According to these facts, the country may specialize in specific goods and services taking into circular international standards of productivity and quality.However, this is not the only issue that developing countries governments should take into account if they want to solve the economic (devaluation, current account deficit, contrasted debt), favorable (unemployment, income equality), political and environmental problems that the economic harvest-tide process may cause.In addition, they have to add value to the resources they have, creating a competitive advantage (Doryan, 1993, p.451), that help them in sustainable growth.As previously stated, the export blowup would help economic growth, and if a country is able to create a competitive advantage that would help them to get an important position in the global market. Under these conditions, they can avoid problems such as devaluation, foreign debt, unemployment, income and equality, political instability and environmental problems.According to Porters theory, governments must ensure the development of four elements in order to get the nations go on competitiveness, they areProductivity Governments should veal for the industry efficiency creating a macroeconomic and financial dynamism, adequate infrastructure and a competitive domestic market with the participation of international firms.Socio-political Stability It is necessary to build an environment that part with freedom of expression, homosexual rights and were exist a confidence toward the judiciary governance and the government, and good living standards. (Doryan, 1993, p.453)Human resources The human factor may eventually come to represent the new competitive edge for the global corporation, more than physical and other resources (Kedia & Mukherji, 1999, p.235). Government should be conscious of the important of human resources, for that reason it is important to create accessible educational and training opportunities.environmental Conditions In order to obtain Environmental sustainability governments should control the adequate vigilance of natural resources, establish rules and procedures to control waste and pollution, and create a social consciousness of the importance of environmental conservation at firms and citizens levels.Furthermore, Porter states that in order to obtain economic growth through great international trade, the government should be able to promote the creation of international clusters. For example, this is what Mexico is doing by linking with the United States. This is a situation, where Mexic o can obtain many benefits in the growth of import and export. In addition, this country can gain access to their engineering and human resources and incorporate them into their own country in order to respect its economic growth and development and internationally competitive strength. (mirar bibliografia mexico)Reference listAybar & Milman, (1999), Globalization, emerging market economies and the currency crisis in Asia Implications on Economic refine and Development. Multinational Business Review. Vol.7, No. 2. pp. 37-44.Balassa, B. (1998), The Lesson of East Asian Development An Overview, The University of Chicago, pp.273-289Doryan, Eduardo. (1993), An institutional Perspective of Competitiveness and Industrial Restructuring Policies in Developing Countries, Journal of economics Issues, Vol.28, No. 2. pp. 451-457.El Pais (2001), Dossier Documental,www.elpais.es