Can Government CI Bolster RegionalCompetitiveness?

Derek ParkerAlberta Agricutlure, Food, and Rural Development

EXECUTIVE SUMMARY

Government competitive intelligence (GCI) involves monitoring and analyzingexternal and internal factors to support government and industry clients in theirstrategic and tactical decision-making. The purpose of this article is to develop aframework for exploring GCI value in a world that already has functioning private-sector CI. The framework provides a foundation for the remainder of the textdiscussing possible GCI clients and how they could be serviced. The preconditionof value is that industry and government have intersecting competitiveness goals.The input factors that will create value are found where government and freeenterprise differ in types of knowledge, access to knowledge, and resourcecapabilities—if there were no differences, there would be no need for GCI. Inputfactors include a government’s unique perspectives, competencies, networks, andfunding resources. GCI value is defined through improved governance andincreased levels of competitiveness within a jurisdiction. © 2000 John Wiley & Sons, Inc.

What is government competitive intelligence (GCI)?One possible definition is the monitoring and analysis ofexternal and internal factors for strategic and tacticaldecision-making purposes, serving government and in-dustry clients. More important than finding an accept-able definition is discovering or uncovering how GCIcan create value in a world where CI already exists.Unique geographical approaches to GCI will surely un-fold, but some features are bound to be universal. De-

fining those universalities and outlining a framework forexamining GCI value is the output of this exploratoryprocess.

GCI TodayResearchers and analysts from government usually differfrom private-sector competitive intelligence practitionersin terms of their areas of operation, resources, experi-ence, clients, and the underlying motivations for con-

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ducting analysis. Where companies see consumers andprofits, governments see citizens and votes. Where busi-nesses are interested in outputs and doing, the publicsector turns to infrastructure and enabling, and so on.Given their differences, can branches and employeesfrom government contribute to industry and corporatecompetitiveness through involvement in competitiveintelligence initiatives?

Regardless of theory or rhetoric, some governmentemployees are finding themselves on the cusp of gov-ernment competitive intelligence or possibly beyond. Asgovernment units inch forward in GCI, they are wise toponder their niche role and ability to foster and ratchetcompetitiveness given the competitive state of regionalindustries and private-sector CI services. Better late thannever, the cusp teetering position is a good place to ad-dress some difficult questions:

RATIONALE—Why should governments get involved inGCI?

AREAS AND MODELS OF OPERATION— Who shouldGCI service and how should it be done—assisting indi-vidual firms, national or regional (jurisdiction-based) in-dustries, or government itself in becoming more globallycompetitive?

THE QUESTION OF EFFICACY— Are free-market pur-ists right that GCI will diminish the effective role of themarket and limit opportunities for private-sectorsolutions?

Why GCI?To date, a modest volume of material has been writtenon the rationale for and against GCI. Prescott and Gib-son (1996), Oxelheim (1999), and Calof and Skinner(1999) comment on how or why government shouldemploy GCI. Conversely, Lisse (1999) comments on thepitfalls of GCI.

Calof and Skinner (1999, p. 21) provide a brief per-spective on how Canadian government assets—size, out-reach potential, skills, and information—act as afoundation in developing five different government CIroles: awareness builder, developer, creator, partner, andmentor. Prescott and Gibson conclude that “the keyquestion is not whether governments should play a rolein a company’s CI efforts (since they all do), but whatshould be the purposes and methods used by a govern-ment” (pp. S44–S45, 1996). They then go on to postu-late five “assumptions” in support of GCI:

1. Competition is so complex that businesses do not haveall the resources necessary to remain competitive in aglobal economy.

2. Some countries select industries as priorities . . . so acountry is at a disadvantage if it does not engage in asimilar selection and assistance process.

3. Countries have a vested interest in industries and firmsthat help achieve security goals.

4. Governmental role in CI is a policy tool. To effectivelyimplement policy, the role of business competitivenessneeds to be clearly identified.

5. Governments have historically developed unique skillsand resources that permit them to collect and analyzelarge volumes of CI information efficiently andeffectively.

But is there truly ample rationale in the literature forGCI? By implication or direct reference, some senior CIor CI-related professionals think not. Michael Porter(1998, p. 185), for example, states: “competitive timefor companies and political time for governments arefundamentally at odds. It often takes more than a decadefor an industry to create competitive advantage. . . . Butin politics, a decade is eternity.” Watson (1997) suggeststhat many government departments are ill-equipped forconducting CI.

Current commentary on GCI is undoubtedly influ-enced by culture and historical interactions betweengovernment and free enterprise. Nonetheless, assessingthe value of GCI goes beyond simply repudiating orjustifying its existence. An articulate rationale for GCIbecomes the base camp for logically and strategicallydelineating GCI operating areas, functions, products andprocesses, and partnership opportunities with the privatesector. The base camp snag, as with any frontier activity,is the difficulty in measuring GCI value before suchinitiatives bear fruit (likely to be of sweet and bitter va-rieties). Savitz (1999) illustrates historical GCI value;however, with new political, ecological, social, techno-logical, and economic realities, yesteryear’s strategiesemployed today will surely lead to different outcomesand valuations.

In this article, GCI rationale is evaluated in terms ofhow it creates value through contributions to regionalor jurisdictional competitiveness. The precondition forvalue creation is that government shares a common goalof competitiveness with industry with sufficient clarity

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and integrity to sustain this position from one govern-ment to another. As new administrations bring withthem new philosophical perspectives and policy patterns,an explicit rationale for GCI linked to strategies andactions may help in addressing concerns of continuityand effectiveness. No doubt, there will be trade-offs.

The rationale for GCI is reflected in the extent thatcertain inputs contribute to value creation: unique gov-ernment competencies, networks, and perspectives cou-pled with an ability to commit resources. On the outputside of the GCI value equation, it is assumed that im-proved governance will be realized simply through anenhanced understanding of the external competitive en-vironment. What is not assumed is that GCI automati-cally leads to a higher state of industry competitiveness.Figure 1 illustrates this precondition, an input and out-put relationship.

Precondition for GCI Value Creation

A Common Industry/Government Goal ofCompetitiveness

While government and industry have different perspec-tives, interests, knowledge, and skill sets, they both sharethe goal of competitiveness. If a government doesn’tfoster competitiveness by developing good policies andtax rules, employing resources efficiently, and negotiat-ing effectively in the international arena, it will find itsjurisdiction at an economic disadvantage relative toother globally competitive regions. It may also find tal-ented individuals and companies fleeing for countries orregions where they are more rewarded for their efforts.In the increasingly global domain of business, this sharedcompetitiveness goal should only be lacking in but afew exceptionally insular nations of the world.

GCI Inputs to Value Creation

Unique Competencies

Before jumping to the derisory default button for gov-ernment, consider a few areas of government operation.Governments develop rules and regulations in areas suchas labeling, quality standards, food safety, and environ-

Figure 1.Precondition, Inputs and outputs of GCI.

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mental standards. They take part in international negoti-ations on issues such as free trade, import/exportstandards, cross-border health concerns, etc. Less fortu-nately, they are deeply aware of taxation issues regardingincomes, profits, sales, property, credits and waivers,accounting requirements, and so on. While governmentsare giving way to private enterprise and the market in theareas of infrastructure and utilities, their policy and reg-ulatory development roles continue to be important.

Furthermore, government involvement in health,education, and the environment—critical foundations oflife quality measures—provides an opportunity to de-velop unique competencies. Through work in these andother areas, government employees have developed re-search and analytical competencies that could conceiv-ably be applied in a variety of GCI projects. Thechallenges of building a framework that helps operation-alize government competencies in GCI projects andactivities may beckon a knowledge management ap-proach, with emphasis on knowledge mapping. Somediscussion of the underlying concepts are provided byVail (1999) and Davenport and Prusak (1998).

Different Networks

Beyond the issue of competency, government em-ployees may have opportunities that are not available tothe business community for building and accessing net-works. Through ongoing international and inter-government relations as well as reputations as benigncompetitors, governments can occasionally get throughdoors that are less open to free enterprise. These net-works are useful not only because they generate uniqueinformation, but also because they provide a fresh set ofminds capable of adding value to the analysis of factorsinfluencing the business domain. Conferences, overseasaid, political alliances, cooperative initiatives, and inter-national working relationships are examples that providethe conduit for information for government employees.

Adding to their networking capability is the largenumber of well-educated foreign nationals employed bygovernment that bring with them unique perspectives inconducting global GCI.

Macro Industry Perspective

Government employees that work in industry-oriented departments or ministries (e.g., agriculture,mining, forestry, technology, and so forth) are apt todevelop a solid understanding of specific industries andthe macro environment that affects them. While this

knowledge and orientation may not be overly produc-tive at a company level, it may be advantageous inworking at the industry or industry association level.The notion of industry clusters, raised to its currentlevel of notoriety by Michael Porter (1998), provides apotential arena for GCI applications. Evolving new clus-ter developments involves macro-prospecting andfacilitation—skills well-developed within many govern-ment departments.

GOVERNMENT EMPLOYEES, THROUGH

INTERNATIONAL AND INTER-GOVERNMENT

RELATIONS, MAY HAVE OPPORTUNITIES THAT ARE

NOT AVAILABLE TO THE BUSINESS COMMUNITY

FOR BUILDING AND ACCESSING NETWORKS.CONFERENCES, OVERSEAS AID, POLITICAL

ALLIANCES, COOPERATIVE INITIATIVES, AND

INTERNATIONAL WORKING RELATIONSHIPS ARE

INFORMATION CONDUITS.

Industry associations and clusters are particularly well-suited to GCI applications because they often fall withinthe geographical or jurisdictional confines of govern-ment bodies. Furthermore, governments are bound tofind GCI initiatives focusing on whole industry or sub-sector competitiveness less contentious than activitiestargeting individual firms.

Ability to Commit

Businesses, especially small and medium-sized enter-prises (SMEs), often lack the ability to dedicate time andcapital to CI. Governments can target SMEs and dedi-cate both time and resources to leveraging their com-petitiveness through GCI initiatives. Without GCI,small companies with resource or awareness limitationsmay never fully exploit CI opportunities.

Outputs from GCI

Improved Governance

GCI initiatives involving both internal and externalprojects would allow governments the opportunity tobetter understand the nature of competitiveness and theimpacts of existing policies, programs, information prod-ucts, and services. Governments that are more awareand responsive to competitive industry needs can play amore effective role in improving the environment inwhich competitiveness can flourish. Porter (1998, p.184) considers it incumbent on government to act as the

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catalyst and challenger of industry competitiveness byshaping the context and institutional structures that sur-round companies. As such, improved governance con-tributes directly and indirectly to the second output goalof improved competitiveness.

Improved Competitiveness

As mentioned, this second output goal cannot be as-sumed away as easily as the first. Indeed, the rationalefor GCI would be lost if the whole effort did not con-tribute net value to a region by nurturing and ratchetingcompetitiveness. While GCI initiatives and programs areultimately linked to improved competitiveness, observ-able effects could take years to materialize at the macrolevel. In the interim, the opportunity for enhancingcompetitiveness is assessed by investigating the integrityof the competitiveness goal and the input factors notedabove.

CaveatsSome factors conceivably disorient and interfere with agovernment’s ability to conduct valuable GCI work inservicing industry clients. One consideration is the dif-ferent bottom lines that characterize government andfree enterprise. The private sector’s overriding profitmotive is contrasted with government’s bottom line:success in dealing with the electorates’ varying priorities.Bureaucratic pace and the need for governments to ad-dress political pressures may be an additional source ofconcern, possibly leading to considerations on where tohouse GCI personnel.

The potential for government to be isolated from thebusiness decision maker—CI’s origin and destination—isanother source of concern. Business leaders, however,may want to take advantage of GCI practitioners forreasons noted earlier and because they may be less im-bued with prevailing corporate assumptions, myths, andtaboos (Gilad, 1994); also, their career ladders lean ondifferent pillars, making them potentially less hesitant todeliver bad news. At the industry level, GCI may bringtogether regional industries to address global competitiveissues (e.g., relative competitiveness of national or sub-national manufacturers or producers). Government may,in the context of GCI, bring together value chain part-ners in ways that, left to their own devices, industrymay not achieve. Ultimately, delivering the goods is whatwill bring GCI closer to the real decision makers andcloser to its potential to create real value.

Another worry not to be swept aside is that GCI mayend up as just another letterbox of information aside anexisting information overload scenario that research sug-gests may already be narrowing the attention span ofbusiness leaders (Gilad, 1994, p.48). Because govern-ment employees bring with them different perspectivesand networks than their private-sector counterparts, thepotential for the information arena to rapidly expand iscause for alarm.

The opportunity to lend competitive advantage toone firm over another reflects a potential miscarriage ofGCI. Lisse (1999) combines this concern with the viewthat GCI counters free-market principles and representsa misallocation of intelligence community resources(ibid., p.26). Philosophical perspectives may lead somecountries away from GCI (determined otherwise to beof economic value), but advancements in other nationscould pressure reconsideration.

While philosophically principled arguments representa valid perspective, it should be stressed that GCI is notintended to replace private-sector CI, but rather to sup-port and complement it. Where successful, GCI wouldhelp in imbuing competitive orientation and releasingpent-up demand for the unique services offered by CIpractitioners and trainers.

The Who and How of GCI?Once surmounted, the rationale for GCI becomes a linkto the ensuing game plan. A full game plan would ad-dress the remaining who, what, where, when, and howof GCI development. The text below goes part way bybriefly examining two of these concerns: who the cli-ents are and how they are serviced.

Three possible GCI clients include:

Decision makers in INDIVIDUAL COMPANIES (CorporateGCI);

Decision makers in WHOLE INDUSTRIES, SUB-SECTORS, and INDUSTRY ORGANIZATIONS. (IndustryGCI); and

Internal government decision makers (Internal GCI).

Corporate GCIThis form of GCI may help in fostering growth of aninfant competitive intelligence industry or in assistingcompanies to become more competitive and globallyoriented. Corporate GCI may be applied by govern-ment units, or facilitated through private- and public-

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sector CI trainers or academics. As noted, this GCIapproach invites controversy by potentially disadvantag-ing firms that, for whatever reasons, do not access thetraining or information services others do. This concernalone may lead some countries to focus GCI initiativeson industry associations and government clients.

For countries that undertake Corporate GCI, impactson companies in the same jurisdiction should be evalu-ated, as well as the available slack to absorb domesticgrowth. Ultimately, Corporate GCI may be more appli-cable in countries where SMEs—perhaps lacking in re-sources, competencies, and networks enjoyed by largercorporations—predominate.

Industry GCIGovernments often operate within the same definingboundaries as industrial organizations, giving IndustryGCI a starting-line advantage over Corporate GCI.Governments applying GCI at the industry level, how-ever, still risk diluting advantages previously conferred tofirms employing CI by pluralizing their intelligence ap-proach and accumulated knowledge. Governments con-cerned with these ramifications could avoid detailedcorporate analysis, focusing instead on broader issuessuch as general market access, political risk, national orregional strengths and weaknesses, potential value-chaininitiatives, and possibly competitor identification.

GOVERNMENTS CONCERNED WITH NEGATIVE

RAMIFICATIONS COULD AVOID DETAILED

CORPORATE ANALYSIS, FOCUSING INSTEAD ON

BROADER ISSUES SUCH AS GENERAL MARKET

ACCESS, POLITICAL RISK, NATIONAL OR REGIONAL

STRENGTHS AND WEAKNESSES, POTENTIAL VALUE

CHAIN INITIATIVES, AND POSSIBLY

COMPETITOR IDENTIFICATION.

The key concern here is that Industry GCI comple-ments what is already internalized at the micro-industrylevel. The training component of Industry GCI couldemploy government, industry, and academia to enhanceindustry or cluster competitiveness. Finally, the macroperspective that governments are inclined toward makesthis approach appealing.

Internal GCIThe true merit of Internal GCI is found in studyingother governments and the external competitive environ-ment to improve domestic government strategies, poli-

cies, regulations, products, and services. Given thatcountries and regions compete for labor, brains, andglobal financial resources, Internal GCI is unlikely to beviewed as optional. This fact makes Internal GCI per-haps the least controversial approach and, arguably, themost efficient given the obvious: governments tend tounderstand each other.

Beyond their corporate, industry, or internal clientconsiderations, GCI organizers will also be confrontedwith a geographic concern: should they provide assis-tance to local operations headquartered in other cornersof the globe? I believe, as does Oxelheim (1999), thatthey should because of their mandate to commit to bol-stering regional competitiveness. Indeed, effective GCIefforts may combine with the investment attraction ef-forts of public- and private-sector organizations tostrengthen inward investment, global orientation, andcompetitiveness.

GCI Modes of OperationSimilar to the private sector, two basic GCI modelsemerge:

1. A diffused approach in which virtually everyone in agovernment body or department contributes to the GCIeffort.

2. A more formal and concentrated approach, involving asmall unit with at least one manager in charge.

Michael Porter (1980, p. 72) argues against the dif-fused model in the private-sector case, saying: “All toooften, however, no one is made responsible for thecompetitor analysis at all. There seems to be no singlecorrect way to collect competitor data, but it is clearthat someone must take an active interest or much use-ful information will be lost.”

It is conceivable that the private sector’s unifyingprofit mantra simplifies higher order objectives andmakes a diffused CI approach attainable. Things may bemore complicated in the public domain where govern-ments maintain multiple goals, operate in multiple are-nas, and maintain multiple decision-making endpoints.Given this scenario, a centralized approach, such as thecreation of a GCI unit, takes the pole position in fast-tracking towards a workable model. Once a GCI unit isfunctioning effectively, it becomes increasingly possibleto provide the training that makes a sustainable hybridsolution possible: a core GCI unit with diffused GCIcapabilities among employees.

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Should such GCI units consider charging fees forservice? In the early stages of operation, the challengewill be to draw maximum value from the unique com-petencies, networks, and perspectives governmentsmaintain. As GCI units become more effective and aspartnerships with private enterprise begin to bear fruit,value could conceivably be examined in cost sharing orcost recovery arrangements with industry and govern-ment clients.

Can Government Do CI Well?Are the free market purists right when they say GCIwill diminish the effective role of the market and limitopportunities for private-sector solutions? Before an-swering this question head on, consider the followingthought: people are acutely aware of the imperfectionsof governments because when things go wrong they arevastly more palpable than when they go right. Further-more, when one considers the vast roles and responsibil-ities of governments even in the most capitalist ofnations, it is sometimes surprising that things don’t fallapart more often. Rather than defend the roles andscorecards of government, I would focus attention onthe competent individuals that are foundations to manyeffective public systems and organizations. The conclu-sion to this thread of logic—where there is competency,there is latent potential for continuous improvement,good analysis, and . . . GCI.

The unique programs and institutions that govern-ments develop and dedicate to GCI will ideally belinked to a regionally or nationally founded rationalejustifying its very existence. Once rationalized, GCI ini-tiatives provide a learning ground for refinement. GCIinitiatives, like their counterparts in the corporate do-main, are likely to encounter a body of naysayers thatcreate interesting challenges. To address the inevitablecriticisms, GCI practitioners need to identify and evalu-ate their contributions to improved competitiveness.Obviously, when criticism is of the constructive subset,it can help in making forward progress.

Concluding RemarksWe started this article asking how GCI could createvalue in a world in which CI already exists? As a neces-sary precondition, it was stated that government andindustry must share a common competitiveness goal.Creating GCI value was seen as an exercise in exploit-

ing the differences between government and theprivate-sector perspectives, competencies, networks,and resource capabilities. On the output side of theequation was improved governance and increasedcompetitiveness.

Calof and Skinner accurately refer to GCI in Canadaas “a hodge podge of ad-hoc activities” (1999, p. 22).While Canada’s “hodge podge” approach to GCI is wit-ness to the fact that things are happening, it is also evi-dence that a more systematic approach may hastenprogress and heighten the value of GCI. The systematicapproach was defined as evaluating the common goal ofcompetitiveness shared between industry and govern-ment, the input features and output potential as outlinedin Figure 1. Through a broader brain trust, expandednetworking opportunities, new analytical perspectives,new competencies, and committed resources, progres-sive governments can derive valuable GCI solutions sys-tematically and serendipitously. While many caveatsarise, perhaps none are as important as the concern thatGCI simply adds to the state of information overloadcurrently bedeviling business and government decisionmakers alike.

The point deserving reiteration is that developing asolid rationale for GCI in its national or regional con-text, and linking it to operational functions, may avertsome of the problems associated with an ad hoc ap-proach. When public- and private-sector goals arealigned and when unique government attributes areproperly exploited, GCI can create value in a world thatalready has functioning private-sector CI.

AcknowledgementThe author would like to thank Ben Gilad for encour-agement and private-sector perspective, Gibson Hannafor his detailed reviews and editorial assistance, andHanna’s competitive intelligence colleagues at AlbertaAgriculture, Food, and Rural Development.

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Gilad, B. (1994). Business blindspots.Chicago: Probus Pub-lishing Company.

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Oxelheim, L. (1999). Applying ’MUST’ analysis. CompetitiveIntelligence Review, 10(4), 65–73.

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Savitz, S. (1999). Mission to Beijing: Government-sponsoredCI in the 18th century. Competitive Intelligence Magazine,2(2), 27–29. [Online]. Available: www.scip.org/news/cimagazine.html.

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About the AuthorDerek Parker has spent two-and-a-half years as coordinatingresearcher for the competitive intelligence unit of Alberta Agri-culture, Food and Rural Development. Previously, he workedfor five years in Africa as a development project manager,teacher, and researcher. He has also worked as a supervisor forthe Bosnian 1996 federal elections under the auspices of Eu-rope’s Organization for European Cooperation and Develop-ment. In the fields of agriculture and agri-food, he has sixyears of public- and private-sector work experience. Derek hasa bachelor’s degree in economics (Calgary) and an M.Sc. inagricultural economics from the University of Alberta. He is aprofessional agrologist, a founding member of SCIP’s Edmon-ton chapter, and has been a SCIP member for the past twoyears. He can be contacted at the Economics and Competitive-ness Division, Alberta Agriculture, Food and Rural Develop-ment, #303, 7000-113 Street, Edmonton, Alberta, T6H5T6, Canada; Tel: 11 780-422-5577; Fax: 11 780-427-5220; e-mail: derek.parker@gov.ab.ca; Web site:www.agric.gov.ab.ca.

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