CULTURE

MAKES ALL THE DIFFERENCE


As defined by Wikipedia, “culture” is what “…distinguishes life in one group from life in another group; mental content, norms, institutions and physical objects, among other qualities.”
 
In the economies of nations, it is what yields a competitive advantage over other countries.  Harvard Business School Professor Michael Porter wrote about this book in the 1990s with the seminal piece, “The Strategic Advantage of Nations,” written back in 1990.  Porter later refined this to be the five forces of competitive advantage being:
 
* Buyers’/customers’ power

* Suppliers’ power

* Rivalry among competitors

* Threat of new entrants

* Threat of substitute products

 

The importance of culture for a nation has come to prominence once again due to the recent comments by Republican presidential candidate Mitt Romney who, when visiting the Middle East, stated that “Culture makes all difference” in explaining the economic superiority of Israel over neighboring countries.  Here, Romney was merely advancing what another Harvard professor, David Landes, author of “The Wealth and Poverty of Nations“, had declared to be the thesis of his lifetime of study: “that culture was the single greatest single factor in explaining a society’s successes and failures.”
 
This is has nothing to do with religion, sex or race.  Culture here has everything to do with opportunity.  For those countries such as the United States and Israel that allow for its citizens to ascend in a culture that values achievement, the end result is a high standard of living for the people and an advanced society.  For the others, a country where its inhabitants must endure a bleak existence due to a lack of opportunity is, sadly, the inevitable end result.
 
The treatment of the females of a populace is a major factor in the culture of the country that will determine how advanced its economy becomes.  Probably the most important law in the United States in the past four decades was the enactment of Title IX in 1972.  Title IX prohibits discrimination in any institution receiving Federal funding on the basis of sex.
 
While Title IX is most often associated with athletics, it opened up education to females for schools in the United States.  This led to a wave of females entering graduate schools of business, law and medicine.  From there, political and cultural leaders such as Secretary of State Hillary Clinton and Inra Nooyi, the Chief Executive Officer of Pepsi Cola, ascended through the culture to global leadership roles.
 
But for a country where the culture does not value the input of women, the economy, and thus the people, will invariably fall behind.  In the May/June issue of Foreign Policy magazine, Mona Haltaway details the persecution of women. She reports on how they are repressed, raped, and murdered in the Middle East. She writes, “when it comes to the status of women in the Middle East, it’s not better than you think. It’s much, much worse.”
 
Culture is not just important for the economy of a nation, it is important for everything.  A country cannot separate its “…mental content, norms, institutions and physical objects” from how it interacts with other nations in the global economy.  It simply cannot be done.
 
In a recent OECD report, the nations with the most advanced economies were also the most highly educated.  Included in this group were Israel and Finland, hardly nations with any deep trove of natural resources that were unique to that country and thus highly valued by others.   What these countries have are cultures that emphasize the upward mobility of its citizens based on achievement, not sex or race.
 
Mitt Romney was right: “Culture makes all the difference.”