Determining Competitive Advantage of Communities in a Rural Setting
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Journal of Educational and Human Resource Development 6:227-237(2018) Southern Leyte State University, Sogod, Southern Leyte, Philippines Determining Competitive Advantage of Communities in a Rural Setting Constantino G. Medilo Jr.* Frederick C. Aniga College of Teacher Education Southern Leyte State University Tomas Oppus, Southern Leyte, Philippines Abstract This study provided a framework for determining the competitive advantage of the communities in the rural areas using principal component analysis. The profiles of the municipalities in the province of Southern Leyte, Philippines were analyzed, and principal components identified. The data included density, total land area, revenue classification, number of literate residents, number of gainful workers, average household size, number of residents with academic degrees, number of hazards present and the rate of population increase. The results identified four indices as factors of competitive advantage, which included the general demographic index, crowding index, family size index, and hazard exposure. This paper concluded that competitive edge in rural areas is a function of general demographic factors, crowding, family size, and exposure to hazard. Demographic and geographical factors are vital to improving the competitive advantage of municipalities in the rural setting. Attaining competitive advantage in the rural environment means municipalities must have robust performance in literacy, population, the productivity of its citizens. Those municipalities should likewise perform well in controlling crowding and at the same time have the ability to mitigate the possible effects of natural hazards. The focus of determining competitive advantage away from economic indicators provides opportunities for looking at how communities in the rural see what they define as success. Keywords: Geographical economics; Local governance; Philippine studies; Social sciences; Climate studies Introduction helpful concept in understanding capabilities and in dealing with the country’s prosperity This paper aimed to provide a framework and productivity. In the context of municipality, to determine the competitive advantage of competitive advantage resides in the aptitude communities in a rural setting. Competitive to increase the productive activity and advantage allows organizations and services that generate significant presence on communities to improve the levels of the state, national and international markets, performance to reach targets. For the increasing the educational level, income, and public sector, it must be translated in the health of his inhabitants improving this increased quality in the services and efficient way their quality of life (MR, 2018). use of resources to propitiate the social The competitive advantage of a municipality and economic development (MR, 2018). is measured through different areas. Zhang According to Porter as cited by Silva and (2014) determined competitive advantage Tamayo (2016), competitive advantage is a through infrastructure such as transportation, Correspondence: [email protected]; ORCID: 0000-0002-0550-6882 ISSN 2545-9759 Medilo and Aniga JEHRD Vol.6, 2018 telecommunications, water, and sanitation; opportunities, high salaries and bonuses as improved public service which included well as low personal taxation (Fo¨bker, Temme, education, health, public security, and & Wiegandt, 2014), and education and quality housing; and reduced cost of doing of local physical infrastructure (Ghani, Kerr, & business through simplifying regulations, O’Connell, 2014). The local government then making it easier to open business, pay must be able to attract business and industry taxes, hire workers, acquire land, and exit to create jobs (Kincheloe, 2018) and meet from businesses. Additionally, Fo¨bker, the needs and expectations of the prospective Temme, and Wiegandt, (2014) based a residents. If these needs are not met, the municipality’s competitive advantage on municipality will experience brain drain (Gibbs, the provision of attractive housing, cultural 2018) that will weaken its advantage. amenities, and a high-quality educational According to Balestrieri (2014), people, environment. Meanwhile, Silva and Tamayo activity, and uses influence the competitive (2016) competitiveness measures among advantage of a municipality. The first the municipalities of Compostela Valley macro-category (population) considers the was obtained by employing the weighted fact that without a critical mass there is no average value of the three indicators such as stimulus to innovation, research, innovative economic efficiency, government efficiency, solutions, autonomous development and infrastructure development. and overcoming dependence, therefore, With all these factors in place, tangible advantage cannot exist without growth in result will redound to the influx of business population. The second macro-category and a vibrant and healthy economy, which can (activity) refers to economic progress, be further triggered by the implementation expressed by a level of employment, of policies or municipal ordinances that a standard parameter for investigating promote economic development that is, to competitive advantage. The third category attract investment, tourists, labour force, (uses) reports on the fact that the spatial and residents (Cleave & Arku, 2015). The organization system can be an essential local government unit must be able to offer stimulus for attractiveness and development. companies the lowest tax rates and the McGranahan, Kasper, and Maestre (2017) best infrastructures (roads, sewers, lax illustrated why people normally live in environmental regulations) to make the significant settlements and that city has municipality attractive to companies and better position than a small town or a village create jobs (Kincheloe, 2018). In effect, local to accommodate essential services, where councils have a significant role as actors that small municipalities usually cannot afford to compete with each other in essential areas build and maintain. to attract and retain residents, businesses, From all articles cited, there has been and skilled workers (Bjθrna,˚ 2014). However, no study conducted that measures the Anderson and Henrekson (2014) pointed out competitive advantage of municipalities in the that for a municipality to have an advantage, it rural areas based on the identified variables. must have the capacity to renew its economic Many of the studies undertaken focused base to maintain its relevance continuously. only on cities and other highly urbanized Meanwhile, the competitive advantage of a communities (McCarthy, 2016). Thus, this municipality is one consideration for someone study attempts to explore the competitive who is contemplating for his or her choice advantage of municipalities in the rural of residence. If a person decides to settle setting (Leigh & Blakely, 2016), and provide down in a particular municipality, the place a framework for measuring the competitive of choice most likely have enough attractive advantage of the communities in the rural job openings, including promising career areas using principal component analysis. 228 Medilo and Aniga JEHRD Vol.6, 2018 The profiles of the municipalities were also Lastly, the transient advantage views analyzed, and the principal components the organization’s competitive advantage identified. strategies as transient and eventually will have to be replaced to sustain the leverage. Theoretical and Conceptual The transient advantage view argues for the continual enhancement of the approach to Framework continually attain competitive advantage. There are theories which identify and According to Schwab and Sala-i-Martin explain the factors of competitive advantage. (2013) as mentioned in Siudek and Zawojska Wang (2014) identified six approaches on (2014, p. 93), ” competitiveness is the set competitive advantage, which include the of institutions, policies, and factors that market-based view, the resource-based determine the level of productivity.” The view, the knowledge-based view, the definition of Siudek and Zawojska (2014) capability-based view, the relational view defines various factors that determine of strategy, and transient advantage view of the competitive advantages of a country competitive advantage. or community. Paul Krugman, American The market-based view of competitive economist and a distinguished Professor advantage is concerned with establishing of Economics at the Graduate Center of and defending a strategic position regarding the City University of New York, added the ability to exploit natural economies that geographical factors could improve the of scale and scope (McGee, 2015). competitive position of a specific place or The resource-based view of competitive community (Sunley & Martin, 2017). advantage identifies the internal resources Determining the competitive advantage of a and capabilities of the organization as the municipality is dependent on several factors main ingredients to achieve competitive related to geography, institutional indicators, advantage (Madhani, 2010). In fact, an and other factors. Thus, this study, identified extension of the resource-based view, factors including density, area, revenue the knowledge-based view emphasized classification, literate residents, gainful the importance of knowledge to the workers, household size, academic degree sustainable competitive advantage of the holders, the rate of population increase, and organization (Curado, 2006). Knowledge is