1.

Porters Diamond model

Porter argues that it is difficult for countries or regions to gain sustained industrial growth if they overly dependent on their inherited factors such as lands, nature resources, cheap labour forces that can build their comparative advantages, meaning that in new economic system countries or regions need to build their competitive advantages in obtaining international competitiveness. Therefore, Porter introduced a new concept named clusters. Porter claims due to the factor of clusters being geographic proximity, it can, in three aspects, pushing regional economic development forward: 1. It can increase the production efficiency of the companies in the clusters to achieve economic of scales. 2. Domestic pressure and challenge drives innovation activities within the clusters. 3. The clustering effect that leads to demands increase within the regions, which attract inflows of supporting industries. According to Porters research, he claims that the companies within the clusters through four interlinked advanced factors and activities in achieving national competitive advantages. In addition, the government can proactively influencing these four factors and activities in favour the clusters to be healthily growing. In Figure 4 is Porters diamond model which shows these interlinked advanced factors and activities that influence the competitive advantages of nations in global competition: Colombias National Diamond reveals some of the key issues that the country faces to improve its competitiveness. While some factor conditions have helped the country develop its most important clusters (a rich biodiversity has certainly fostered Colombias initial agricultural orientation), there are several deficiencies that continue to hold back national competitiveness.

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Porters Diamond Model

Firm Strategy, Structure and Rivalry: The business environment is dynamically changing, in which industries are being created, organised and managed. In other words, rivalry impels industries and enterprises to innovate and to upgrade. However Porter claims regional level of rivalry is the most important competition out of all, because enterprises might feel comfortable to stay within the regions if there is not enough competition, which not only discourage enterprises to seek bigger market, but also it reduces firms motivation to continuously innovate and upgrade. Local rules and incentives that encourage investment and productivity

Demand condition:

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If consumers have high requirements towards quality, design and services of products, in order to satisfy the market enterprises have to continuously improve their products to comply with consumers tastes. Porter indicates that if there are sophisticated customers in the regions whose requirements indicate the global demands or maybe it can even leading the global trends, which is no doubtful to enlighten regional enterprises to innovate in the positive direction in gaining more international market shares, through which national competitiveness can get enhanced. Demanding and sophisticated local customers and needs Challenging quality, safety, and environmental standards e.g., incentives for capital investments, intellectual property protection Related and supporting industries: Firms can corporate in innovation processes and share knowledge through vertically and horizontally integrating among related and supporting industries. Additionally, to obtain competitive advantage, it is needed to corporate with world-class suppliers, which enables firms to follow the standards of international market. Capable, locally based suppliers and supporting industries The presence of clusters instead of isolated firms

Factor conditions:
Porter has distinguished between created and inherited factors of production. Further he indicates that the crucial factors of production are specialised and difficult for imitating such as heavy and continuous investments, which are created rather than being inherited; since the inherited factors normally can be achieved by any enterprises, which cannot enhance firms with competitive advantages continuously. Contemporary the unique features enhance more values. High quality, efficient and specialized inputs to business Natural endowments Human resources Capital availability

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 Physical infrastructure Administrative infrastructure (E.g. registration, permitting) Scientific and technological Infrastructure Colombias competitiveness has suffered from the continued conflict and violence and by the limited allocation of resources to research and development of high-value added sectors. Nevertheless, some variables have helped the countrys sustained growth and outpacing of its Andean neighbors throughout the last decade: the high quality of management education, as well as recent improvements in local supplier quality and quantity, have played a critical role in Colombias performance. In terms of the countrys overall competitiveness rating, the Business Competitiveness Index ranks Colombia 59th of the 129 countries included. This places Colombia well ahead of its Andean neighbors4, although it still lags other Latin American countries like Chile and Brazil. Looking at the progression from previous years, Colombia has made very slow progress in terms of both BCI and NBE, while COS has experienced a slight setback (see Table 2). A more detailed look at the micro variables reveals that while in general, Factor Conditions have shown significant improvement since 2001 (13 out of the 19 micro variables improved by at least 5 places from 2001 to 2006, and of those, 6 variables improved by more than 10 places), Demand Conditions have been relatively stagnant (only 1 out of the 5 micro variables showed an improvement of 5 places or more for the same period). The improvement shown by Factor Conditions variables has certainly contributed to the sustained growth that Colombia has experienced in the last decade. In particular, progress has been most visible in terms of Judicial Independence, Efficiency of the Legal Framework, and in the Reliability of Police Services. These three variables compose some of Colombias greater strengths relative to its overall position, as they ranked 43, 42 and 41 respectively. Colombias most important relative strength lies in the quality of its management education (ranked an impressive 32nd).

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Significant progress was also made in the Availability of Scientists and Engineers, although the overall ranking for this particular variable is 60, still below the aggregate country ranking of 59. These improvements are reflected in Colombias business environment, as evidenced in The World Banks Doing Business survey, where Colombia was ranked 79 among 175 countries, ahead of countries like China, Costa Rica and Italy. The results of the survey place Colombia considerably above the South American regions average rankings in terms of ease of starting a business (which takes an average of 44 days and costs 19% of GNI per capita, against regional averages of 73 days and 48% of GNI) as well as in terms of registering property (which takes an average of 23 days and costs 3.5% of property value in Colombia as compared to a regional average of 77 days and 6% of cost). However, progress still remains to be seen in the areas of Paying Taxes (Total Tax Rate in Colombia came in at 82.9% of profits as compared to a regional average of 49%) as well as in Enforcement of Contracts (which take an average of 1,346 days in Colombia against a regional average of 642 days). Moreover, it is worrisome that Colombia lags the region in terms of ease of trading across borders (it takes on average 34 days to export at a cost of US$1,745 per container in Colombia as compared to 22 days and US$1,069 in the rest of the region). Given the nature of the armed conflict in Colombia, its not surprising that trading costs and enforcement of contracts have suffered as a consequence. This, however, should improve with the approval of the FTA with the United States and other trade agreements. But if Factor Conditions are a relative competitive advantage for Colombia5, the question remains, why then is overall competitiveness lagging? The question becomes even more perplexing when we observe that the general Context for Firm Strategy and Rivalry has not only shown significant improvement in the past five years (5 of the 10 micro variables showed an improvement of more than 5 spots from 2001 to 2006), but is also a relative competitive advantage for Colombia (Average micro variable ranking is 48 compared to an overall 59 rank for the country). Worth noting in particular are the improvements the country has made in terms of Favoritism in Decisions of Government Officials, Intellectual Property Protection, Intensity of Local Competition and

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Cooperation in Labor Employer Relations, which ranked 48, 45,46 and 30 respectively while showing an overall improvement of more than 5 ranks for the period studied. This data seems to show that the efforts undertaken by President Urine have significantly improved the environment in which companies operate and the prevalence of the rule of law despite the continued turmoil. Although Factor Conditions and Context for Firm Strategy and Rivalry have shown progress, it is the Demand Conditions and Related and Supporting Industries that seem to be holding competitiveness down. For the most part, Demand Conditions have been stagnant during the past five years, with the exception of Government Procurement of Advanced Technology Products which improved by 10 spots. Meanwhile, Buyer Sophistication remains a competitive disadvantage for Colombia with a rank of 65 and shows no sign of recent improvement. For Related and Supporting Industries, most of the microvariales have shown some sign of improvement, in particular Local Supplier Quantity and Reliance on Professional Management, which remain a competitive advantage for Colombia at a rank of 42 and 37 respectively. However, Company Spending on R&D continues to lag with a rank of 60. With low R&D spending, Colombia continues to rely on a model of exporting agricultural raw materials without much value-added, and a general inclination to import machinery and technology. As mentioned in the country analysis, we link several of these conditions to the prevalence of internal conflict and violence, given the impact they have in the accumulation of human capital which, in turn, holds back the demand conditions.

2. Per Capital Income of the Country

INTRODUCTION:
Colombia was one of the three countries that emerged from the collapse of Gran Colombia in 1830 (the others are Ecuador and Venezuela). A four-decade long conflict between government forces and anti-government insurgent groups, principally the Revolutionary Armed Forces of Colombia (FARC) heavily funded by the drug trade,

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escalated during the 1990s. The insurgents lack the military or popular support necessary to overthrow the government, and violence has been decreasing since about 2002. However, insurgents continue attacks against civilians and large areas of the countryside are under guerrilla influence or are contested by security forces. More than 31,000 former paramilitaries had demobilized by the end of 2006 and the United Self Defense Forces of Colombia (AUC) as a formal organization had ceased to function. In the wake of the paramilitary demobilization, emerging criminal groups arose, whose members include some former paramilitaries. The Colombian Government has stepped up efforts to reassert government control throughout the country, and now has a presence in every one of its administrative departments. However, neighboring countries worry about the violence spilling over their borders. In January 2011, Colombia assumed a nonpermanent seat on the UN Security Council for the 2011-12 terms. A major role for per-capita income in international trade, as opposed to simply country size, was Persuasively advanced by many early economists including Linder (1961), Kuznets (1966), and Cheney and Sequin (1975) . Yet this crucial element of their story was abandon by most later Trade economists in favor of the analytically-tractable but counter-empirical assumption that all Countries share identical and homothetic preferences. This paper collects and unifies a number of disjoint points in the existing literature and builds further on them using simple and tractable Alternative preferences. Adding non-homothetic preferences to a traditional models helps Explain such diverse phenomenon as a growing skill premium, the mystery of the missing trade, Home bias in consumption, and the role of intra-country income distribution, from the demand Side of general equilibrium. With imperfect competition, we can explain higher markups and Higher price levels in higher per-capita income countries and the puzzle that gravity equations show a positive dependence of trade on per-capita-incomes, aggregate income held constant. The effects of growth are quite different depending on whether it is growth in productivity or

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Through neutral factor-endowment growth, and suggestions are made for calibration, estimation, and gravity equations. The final section reports recent empirical results that good support to the Crucial assumption that produces many of the results just listed: skilled-labor and capital intensive Goods are systematically goods with high income elasticity of demand in Consumption. GDP $9,800 $9,600 $9,500 Per Capital-income 2010 2009 2008

Note: data are in 2010 US dollars Definition: This entry shows GDP on a purchasing power parity basis divided by population as of 1 July for the same year. Source: CIA World Fact book - Unless otherwise noted, information in this page is accurate as of July 12, 2011 GDP - per capita (PPP) (US$) Country 1999 2000 2001 2002 2003 2004 2006 2007 2008 2009 2010

Colombia 6,200 6,200 6,300 6,500 6,300 6,600 7,900 8,600 7,400 8,800 9,300 9,800

GDP - per capita (PPP) rank 109 of Colombia 9800

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GDP per capita, PPP (current international $)

Definition: GDP per capita based on purchasing power parity (PPP). PPP GDP is gross domestic product converted to international dollars using purchasing power parity rates. An international dollar has the same purchasing power over GDP as the U.S. dollar has in the United States. GDP at purchaser's prices is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources. Data are in current international dollars. GDP per capita based on purchasing power parity (PPP). PPP GDP is gross domestic product converted to international dollars using purchasing power parity rates. An international dollar has the same purchasing power over GDP as the U.S. dollar has in the United States. GDP at purchaser's prices is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources. Data are in current international dollars. Colombia GDP Per Capita stands at 2986 US dollars, according to the World Bank. The GDP per capita is obtained by dividing the countrys gross domestic product, adjusted by inflation, by the total population. Historically, from 1960 until 2008, Colombia's average GDP Per Capita was 1945.21 dollars reaching an historical high of 2986.00 dollars in December of 2008 and a record low of 1074.00 dollars in December of 1960. This page includes: Colombia GDP per capita (Constant Prices Since 2000) chart, historical data, forecasts and news. Per capital income From Wikipedia, the free encyclopedia Jump to: navigation, search This article does not cite any references or sources. NSVKMS MBA COLLEGE (GTU), VISNAGAR BATCH 2010-2012 9

Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (January 2008) Per capita income means how much each individual receives, in monetary terms, of the yearly income generated in the country. This is what each citizen is to receive if the yearly national income is divided equally among everyone. Per capita income is usually reported in units of currency per year. When comparing nations per capita income reflects gross national product per person, but it is also used to compare municipalities within nations. When determining the per capita income of a community, the total personal income is divided by the population.

Per capita income as a measure of wealth Per capita income is often used as a measure of the wealth of the population of a nation, particularly in comparison to other Particularly when comparing countries with substantially different levels of wealth, however, it has several weaknesses as a measurement. Economic activity that does not result in monetary income, such as services provided within the family, or for barter, are usually not counted. The importance of these services will vary widely between different economies, both between countries and among different groups within a country. Per capita income gives no indication of the distribution of that income within the country, so a small wealthy class can increase the measured per-capita income far above that of the majority of the population. As for the per capita income of the majority of the population, using the median income or Marty Sen's welfare function is the more appropriate approach.[citation needed] Differing currency exchange rates between countries mean that a given amount of money (for example, one US dollar) has differing values in different places. The US Central Intelligence Agency (CIA) reports that in 2001 Colombia's gross domestic product (GDP) was estimated at $255 billion. The per capita GDP was estimated at $6,300. The

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annual growth rate of GDP was estimated at 1.5%. The average inflation rate in 2001 was 7.6%. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange. It was estimated that agriculture accounted for 19% of GDP, industry 26%, and services 55%. According to the United Nations, in 2000 remittances from citizens working abroad totaled $1.578 billion or about $38 per capita and accounted for approximately 1.9% of GDP. Worker remittances in 2001 totaled $1.776 billion. Foreign aid receipts amounted to about $9 per capita. The World Bank reports that in 2001 per capita household consumption (in constant 1995 US dollars) was $1,446. Household consumption includes expenditures of individuals, households, and nongovernmental organizations on goods and services, excluding purchases of dwellings. The richest 10% of the population accounted for approximately 46.1% of household consumption and the poorest 10% approximately 1.1%. It was estimated that in 2001 about 55% of the population had incomes below the poverty line

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3. Literacy Rate Of The Country

Literacy rate; adult female (% of females ages 15 and above) in Colombia
The Literacy rate; adult female (% of females ages 15 and above) in Colombia was reported at 93.44 in 2008, according to the World Bank. Adult literacy rate is the percentage of people ages 15 and above who can, with understanding, read and write a short, simple statement on their everyday life. This page includes a historical data chart, news and forecast for Literacy rate; adult female (% of females ages 15 and above) in Colombia. Colombia is a free market economy with major commercial and investment ties to the United States. Transition from a highly regulated economy has been underway for more than 15 years. Colombia's average annual economic growth rate of over 5% from 2002 to 2007 can be attributed to an increase in domestic security, resulting in greater foreign investment; prudent monetary policy; and export growth.

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Literacy rate;
Adult male (% of males ages 15 and above) in Colombia The Literacy rate; adult male (% of males ages 15 and above) in Colombia was reported at 93.32 in 2008, according to the World Bank. Adult literacy rate is the percentage of people ages 15 and above who can, with understanding, read and write a short, simple statement on their everyday life. This page includes a historical data chart, news and forecast for Literacy rate; adult male (% of males ages 15 and above) in Colombia. Colombia is a free market economy with major commercial and investment ties to the United States. Transition from a highly regulated economy has been underway for more than 15 years. Colombia's average annual economic growth rate of over 5% from 2002 to 2007 can be attributed to an increase in domestic security, resulting in greater foreign investment; prudent monetary policy; and export growth.

Literacy rate; adult total (% of people ages 15 and above) in Colombia

The Literacy rate; adult total (% of people ages 15 and above) in Colombia was reported at 93.38 in 2008, according to the World Bank. Adult literacy rate is the percentage of people ages 15 and above who can, with understanding, read and write a short, simple statement on their everyday life. This page includes a historical data chart, news and forecast for Literacy rate; adult total (% of people ages 15 and above) in Colombia. Colombia is a free market economy with major commercial and investment ties to the United States. Transition from a highly regulated economy has been underway for more than 15 years. Colombia's average annual economic growth rate of over 5% from 2002 to 2007 can be attributed to an increase in domestic security, resulting in greater foreign investment; prudent monetary policy; and export growth.

Literacy rate; youth female (% of females ages 15-24) in Colombia

The Literacy rate; youth female (% of females ages 15-24) in Colombia was reported at 98.43 in 2008, according to the World Bank. Youth literacy rate is the percentage of people ages 15-24 who can, with understanding, read and write a short, simple statement on their everyday life.This page

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includes a historical data chart, news and forecast for Literacy rate; youth female (% of females ages 15-24) in Colombia. Colombia is a free market economy with major commercial and investment ties to the United States. Transition from a highly regulated economy has been underway for more than 15 years. Colombia's average annual economic growth rate of over 5% from 2002 to 2007 can be attributed to an increase in domestic security, resulting in greater foreign investment; prudent monetary policy; and export growth.

Literacy rate; youth male (% of males ages 15-24) in Colombia

The Literacy rate; youth male (% of males ages 15-24) in Colombia was reported at 97.55 in 2008, according to the World Bank. Youth literacy rate is the percentages of people ages 15-24 that can, with understanding, read and write a short, simple statement on their everyday life. This page includes a historical data chart, news and forecast for Literacy rate; youth male (% of males ages 1524) in Colombia. Colombia is a free market economy with major commercial and investment ties to the United States. Transition from a highly regulated economy has been underway for more than 15 years. Colombia's average annual economic growth rate of over 5% from 2002 to 2007 can be attributed to an increase in domestic security, resulting in greater foreign investment; prudent monetary policy; and export growth.

Literacy rate; youth total (% of people ages 15-24) in Colombia

The Literacy rate; youth total (% of people ages 15-24) in Colombia was reported at 97.99 in 2008, according to the World Bank. Youth literacy rate is the percentage of people ages 15-24 who can, with understanding, read and write a short, simple statement on their everyday life. This page includes a historical data chart, news and forecast for Literacy rate; youth total (% of people ages 1524) in Colombia. Colombia is a free market economy with major commercial and investment ties to the United States. Transition from a highly regulated economy has been underway for more than 15 years. Colombia's average annual economic growth rate of over 5% from 2002 to 2007 can be

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attributed to an increase in domestic security, resulting in greater foreign investment; prudent monetary policy; and export growth.

Primary completion rate; female (% of relevant age group) in Colombia

The Primary completion rate; female (% of relevant age group) in Colombia was reported at 112.17 in 2008, according to the World Bank. Primary completion rate is the percentage of students completing the last year of primary school. It is calculated by taking the total number of students in the last grade of primary school, minus the number of repeaters in that grade, divided by the total number of children of official graduation age. This page includes a historical data chart, news and forecast for Primary completion rate; female (% of relevant age group) in Colombia. Colombia is a free market economy with major commercial and investment ties to the United States. Transition from a highly regulated economy has been underway for more than 15 years. Colombia's average annual economic growth rate of over 5% from 2002 to 2007 can be attributed to an increase in domestic security, resulting in greater foreign investment; prudent monetary policy; and export growth.

Primary completion rate; male (% of relevant age group) in Colombia

The Primary completion rate; male (% of relevant age group) in Colombia was reported at 108.84 in 2008, according to the World Bank. Primary completion rate is the percentage of students completing the last year of primary school. It is calculated by taking the total number of students in the last grade of primary school, minus the number of repeaters in that grade, divided by the total number of children of official graduation age. This page includes a historical data chart, news and forecast for Primary completion rate; male (% of relevant age group) in Colombia. Colombia is a free market economy with major commercial and investment ties to the United States. Transition from a highly regulated economy has been underway for more than 15 years. Colombia's average annual economic growth rate of over 5% from 2002 to 2007 can be attributed to an increase in domestic security, resulting in greater foreign investment; prudent monetary policy; and export growth.

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Primary education; duration (years) in Colombia

The Primary education; duration (years) in Colombia was 5.00 in 2009, according to a World Bank report, published in 2010. The Primary education; duration (years) in Colombia was reported at 5.00 in 2008, according to the World Bank. Primary duration refers to the number of years of full-time equivalent duration in primary education in the school system according to ISCED.This page includes a historical data chart, news and forecast for Primary education; duration (years) in Colombia. Colombia is a free market economy with major commercial and investment ties to the United States. Transition from a highly regulated economy has been underway for more than 15 years. Colombia's average annual economic growth rate of over 5% from 2002 to 2007 can be attributed to an increase in domestic security, resulting in greater foreign investment; prudent monetary policy; and export growth.

Secondary education; duration (years) in Colombia

The Secondary education; duration (years) in Colombia was 6.00 in 2009, according to a World Bank report, published in 2010. The Secondary education; duration (years) in Colombia was reported at 6.00 in 2008, according to the World Bank. Secondary education, duration (years) is the number of grades (years) in secondary school. This page includes a historical data chart, news and forecast for Secondary education; duration (years) in Colombia. Colombia is a free market economy with major commercial and investment ties to the United States. Transition from a highly regulated economy has been underway for more than 15 years. Colombia's average annual economic growth rate of over 5% from 2002 to 2007 can be attributed to an increase in domestic security, resulting in greater foreign investment; prudent monetary policy; and export growth.

WORLD BANK INDICATORS - COLOMBIA - OUTCOMES

Previous Literacy rate; adult female (% of females ages 15 and above) in Colombia 92.9 Last 93.4

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Literacy rate; adult male (% of males ages 15 and above) in Colombia Literacy rate; adult total (% of people ages 15 and above) in Colombia Literacy rate; youth female (% of females ages 15-24) in Colombia Literacy rate; youth male (% of males ages 15-24) in Colombia Literacy rate; youth total (% of people ages 15-24) in Colombia Primary completion rate; female (% of relevant age group) in Colombia Primary completion rate; male (% of relevant age group) in Colombia Primary completion rate; total (% of relevant age group) in Colombia Primary education; duration (years) in Colombia Ratio of young literate females to males (% ages 15-24) in Colombia Secondary education; duration (years) in Colombia

92.4 92.7 98.4 97.5 98.0 113.1 108.6 110.8 5.0 101.0 6.0

93.3 93.4 98.4 97.6 98.0 112.2 108.8 110.5 5.0 100.9 6.0

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Conclusion
The Porter diamond model to effect in it can increase the production efficiency of the companies in the clusters to achieve economic of scales. The Domestic pressure and challenge drives innovation activities within the clusters. The clustering effect that leads to demands increase within the regions, which attract inflows of supporting industries. Per capital income is increase in year by year to comparison last year to 2009 in 9300 and 2010 in 9800 { US$)}to 5.38% is increase. Per capita (PPP) rank 109 of Colombia 9800 comparison to the world We have introduced a way to measure micro (company) level competitiveness based on the theoretical framework of Porter's Diamond model. And also we conclude that the generated competitiveness

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categories give a relevant framework to measure the in the database represented firms' relative competitiveness. We have concluded that per capita income alone can not be a satisfactory criterion for a rational national policy. Although our question concerns the impact of political regimes, one would be blind not to note first the grip over people's lives of sheer poverty. While regimes difference for material welfare, their effect pales in comparison to that of scarcity The literacy rate of the respondents is 59.82% among those 12.66% have gone above matrix. The population has 17.46% SC, 35.94% ST, 31.71% OBC and the rest General caste. While enquiring about the respondents occupation we found that 23.75% are household labors, 39.92 agriculture other categories being insignificant percentage. 61.87% of the population of the area is below poverty line. do make a

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Due to poverty and deprivations of essential needs, the tribal peoples living condition is very poor

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