Lessons in competitiveness and disruption for SA from five global capitals

Walking through Warsaw’s meticulously reconstructed Old Town confronts one with an uncomfortable truth: Poland has outpaced South Africa across nearly every economic measure over 30 years. Its income per capita now exceeds $28,000 compared to South Africa’s $6,500 — an eightfold increase since 1995 when it trailed South Africa.

This isn’t merely about economic policy. It’s about national psychology, strategic clarity, and the willingness to learn from disruption rather than be paralysed by it.

Recent immersive visits across five continents reveal that traditional frameworks of competitive advantage are being rewritten for modern contextual relevance. While strategic frameworks, like Michael Porter’s Diamond Model, remain foundational, today’s leaders are extending it to encompass behavioural economics, geopolitical agility, and “contextual intelligence”— the ability to read and respond to global disruptions while building domestic resilience and creating opportunities from crisis.

Argentina: beyond libertarian mythology

President Javier Milei’s shock therapy has captured headlines — slashing public spending, deregulating markets and reducing monthly inflation from 25% to under 3%. He has delivered undeniable economic stability, opening a window of potential that has eluded Argentina for years. Yet the narrative of libertarian triumph obscures deeper dynamics rooted in Argentina’s unique political economy.

In countries like Argentina and South Africa, cheap currencies matter. The Big Mac Index suggests the Argentine peso remains overvalued by 50% against the dollar, while South Africa’s rand trades at 20% below purchasing power parity. This underscores continued exchange rate distortions and differing challenges for both economies.

More significant than Milei’s macroeconomic experiment is the emerging behavioural shift from decades of dependency on state subsidies toward market-driven entrepreneurialism. Argentina’s agricultural exports jumped by 26% in 2024 as farmers invested in precision agriculture and expanded processing capacity rather than lobbying for government protection. This shift has made Argentina the world’s third-largest food exporter, with agriculture accounting for 60% of total exports — a behavioural transformation as significant as any policy change.

The cautionary tale for South Africa isn’t about adopting libertarian shock therapy but recognising that economic transformation requires psychological transformation. One cannot build competitive industries when business culture prizes regulatory capture over innovation, or when political economy rewards connection over capability.

Poland: disruption as foundation

Poland’s transformation from Soviet satellite to European manufacturing hub represents perhaps Europe’s most remarkable development story of the past generation. Walking Warsaw’s streets, the physical reconstruction mirrors economic rebuilding — both required confronting history rather than denying it.

With economic growth averaging 4% annually since 1992 and foreign direct investment per capita exceeding South Africa’s by a factor of three, Poland demonstrates that proximity to conflict — Ukraine’s war rages uncomfortably close — need not preclude progress.

The Polish lesson is about institutional persistence: building regulatory frameworks that attract investment, educational systems that produce skilled workers, and infrastructure that functions.

Institutions underpin national competitiveness. South Africa’s institutions have weakened against global standards, while Poland’s have strengthened. This isn’t inevitable — it’s a choice. Poland chose European integration and accepted the discipline it demanded. Strategic anchors should guide South Africa’s choices.

Egypt: civilisational ambition

Egypt defies easy categorisation. Neither wholly African nor Middle Eastern, it operates with a civilisational self-conception that shapes its economic strategy. Facing acute climate vulnerability — the Nile Delta’s future hangs on fragile temperature rises — Egypt pursues mega-projects with pharaonic ambition: a new administrative capital, Suez Canal expansion and massive renewable energy installations.

Whether this state-directed development succeeds remains uncertain. What’s instructive is Egypt’s clear-eyed assessment of constraints — limited arable land, water scarcity, geopolitical exposure — and its mobilisation of soft power through cultural influence and strategic geography. Egyptian technocrats possess a sophisticated understanding of their competitive position within regional and global systems.

The lesson for South Africa: strategic coherence and systemic awareness of regional positioning require diplomatic sophistication with long-term potential. Egypt’s mega-projects may prove wasteful, but they represent intentional strategy with global relevance.

Shanghai: the discipline of planning

Shanghai, China — the specification matters given Shanghai’s history of global connectivity and gleaming modernity — offers sobering insights into what national commitment achieves.

About 80% of vehicles in Greater Shanghai are electric, air quality has improved dramatically, and infrastructure functions with a precision that makes most Western cities seem shabby. Shanghai Port, larger than all US ports combined, deploys autonomous trucks and business model innovations now being exported globally.

This didn’t happen accidentally. China’s five-year planning cycles, focused on technological self-sufficiency and internal market development, demonstrate how long-term thinking shapes tangible outcomes.

Electric Vehicles (EVs) exemplify how China’s five-year plans shape our global future. In 2024, China produced 12 million of the world’s 17 million EVs — more than 70% of global production. EVs account for nearly half of all new car sales in China, with two million on Shanghai’s roads alone.

Chinese brands captured 62% of global EV sales in 2024, forcing global automakers to reconsider strategies as domestic brands offer comparable quality at lower prices. This dominance stems from strategic planning that prioritised battery manufacturing, charging infrastructure and domestic market development — a coordinated industrial policy that Western democracies struggle to match.

For South Africa, the question isn’t whether to emulate China’s authoritarian model but whether we can sustain a coherent industrial strategy beyond political pandering and dated policies. Chinese executives speak with clarity about targets, timelines and accountability. The Belt and Road Initiative expresses strategic intent regarding Africa’s role through port development, access to critical resources and opening unexplored markets.

South Africa needs a strategic response with clear stipulations for targeted infrastructure and development. Platitudes about South-South cooperation won’t suffice. We need commercial clarity to ensure Africa isn’t left behind as we negotiate favourable terms in relationships where power asymmetries are stark.

Silicon Valley: open innovation and scale

The United States presents a paradox: extraordinary innovation coexisting with political dysfunction and social fragmentation. Perhaps it’s time to abandon notions of an “American century” while recognising that pockets of US dynamism — technology clusters, research universities, entrepreneurial ecosystems — remain globally significant.

Silicon Valley retains competitiveness through open connectivity, attracting talent worldwide. Forty-five percent of tech company founders are immigrants. Comprising 2% of the US population, Silicon Valley generated 19% of new US patents, 52% of US venture capital funding, 20% of the world’s unicorns, and an astonishing 42% of global decacorns in 2024. Thirty-seven Fortune 500 companies are located there.

Silicon Valley is built on open innovation, true economic clustering where large companies catalyse start-ups, and labour mobility that has built a competitive edge since Intel’s 1968 founding in Mountain View.

The lesson isn’t about replicating Silicon Valley but understanding how innovation persists despite institutional decay. The intensity of focus on technological competition through clusters should alert South Africa: failure to scale and integrate African firms in future technologies will hamper development and risk irrelevance in a world of shifting powers and technological acceleration.

Competitiveness and prosperity are choice

Each location confronts intersecting challenges with a clear strategic orientation. South Africa’s challenge isn’t adopting any single model but developing contextual intelligence to learn selectively while building on genuine competitive advantages.

This requires an honest assessment of our competitive position, clarity about strategic priorities, and willingness to reward capability over connection. It demands behavioural change — from business, government and society — toward long-term thinking and institutional discipline.

The question isn’t whether South Africa can compete globally. It’s whether we’re willing to learn from those already doing so, and to make the difficult choices that competitiveness demands. Lessons from five locations suggest the world isn’t waiting for us to decide. DM

Professor Lyal White is a faculty member at the University of Pretoria’s Gordon Institute of Business. In 2025, he visited Argentina, Poland, Egypt, China and the US for contextual intelligence and learning.