By Scott M Leeb / Alexander Maune
THIS article is a follow up to the previously published article by the same authors titled: “Competitive Intelligence as a game-changer for competitiveness.” CI has become a global phenomenon as a result of technological developments. The advent of mobile application technologies and the wider availability of internet connections have made it easier for individuals and organisations to access large amounts of data.
Carlos and Herrera (2021) argue that the business environment is complex due to increasing global competition. The businessman needs to master all the information that has strategic value, and CI is positioned as the most appropriate tool to achieve this goal.
Theoretical debates have generally focused on the increasing roles and functions of CI on competitiveness. CI plays an intermediation role between economic development and its factors.
Sawka, Kenneth A (1996) in an article entitled, “Demystifying Competitive Intelligence,” defines CI as knowledge and foreknowledge about the external operating environment. He considers CI a prelude to informed decision-making, and further argues that intelligence can be viewed as actionable information about a customer, market situation, regulator, competitor or any other external influence.
The information is made actionable through careful analysis and interpretation, which turns it into intelligence.
The notion of actionable information is essential in the context of CI. The ultimate goal of each intelligence process should be to facilitate decision-making that leads to action.
A more unified view of CI was recently provided as “… the process and forward-looking practices used in producing knowledge about the competitive environment to improve organisational performance” by Madureira, Popoviˇc, and Castelli (2021) in an article, “Competitive intelligence: A unified view and modular definition.”
CI has become a global phenomenon in today’s environment of intensifying global competition as a result of big data, artificial intelligence, internet of things, 5G, cyber security.
The adoption and use of mobile applications such as WhatsApp, Facebook, Instagram, Twitter, and Telegram have accelerated this trend by enabling high-speed availability and transfer of large amounts of data collected and accumulated by individuals and organisations over the years.
Organisations and individuals alike that are capable of transforming this data into information and knowledge faster and quicker remain at the top and thus achieve a competitive edge.
CI’s benefits were long understood in pre-modern Germany. Modern Germany’s intelligence grew in the 18th century, and by scouting the European continent the Germans discovered they could compete with British and French firms by applying foreign scientific advances to their own industrial processes. Because of that the Germans rapidly developed their own base of education and research that was used as a foundation for technological innovation (Rouach and Santi, 2001).
In an article published in the European Management Journal, Rouach and Santi (2001) state that post-World War II Japan was early endowed with a grasp of the importance of intelligence. Japan and intelligence have grown hand-in-hand. Information serves as the axis and central structural support of the nation’s companies.
Fleisher and Wright (2009) agree that Japanese corporate CI capabilities are well developed, benefiting both commercial and governmental programmes, which in turn support Japan’s international competitiveness. CI has had a significant influence in the country’s prosperity and claims: “It is their absolute and unbending belief in CI as a strategic corporate tool to make the best decision possible. CI is the secret to their continued success”. In his article titled, “Why care about competitive intelligence and market intelligence? The case of Ericsson and the Swedish Cellulose Company,” Søilen (2017) argues that Japan and Sweden are mentioned as examples of countries that take the CI discipline seriously.
Global Intelligence Alliance (2004) provides the following arguments regarding the impact of intelligence: The impact of intelligence operations is indirect, just like in advertising, when the decision-maker does not know which part of the budget is actually responsible for the profit.
Similarly, there is usually no direct causal relationship between revenues and the money spent on a particular piece of intelligence.
Therefore, it may be difficult to justify intelligence expenditures. One way of looking at the gains is to evaluate how much money the company has lost by not having effective intelligence. Even so, it is difficult to prove that a lost deal or a late product launch was in fact due to inaccurate information about the competitors’ actions or customer preferences.
The benefits of CI are directly identifiable, although there are no quantitative measures to support this. An improved market position and improved revenue/profits are not directly identifiable since they are “uncertain effects.”
These benefits fall into the category of bottom-line measures, which are usually the most commonly requested.
Chinese leaders have considered intelligence as a useful means of helping the country to overcome its relative isolation from other economic and global trading systems (Fleisher and Wright, 2009). The importance of intelligence can be traced all the way back to Sun Tzu, a 5th century BC philosopher and military strategist who made the case for intelligence as a key element of warfare when he wrote: “Know the enemy and know yourself, in a hundred battles you will never be in peril. When you are ignorant of the enemy but know yourself, your chances of winning or losing are equal. If you are ignorant of both your enemy and yourself, you are certain in every battle to be in peril”.
The current information/knowledge generation has placed CI at the centre stage for competitiveness and economic growth. To cement the centrality of CI in achieving national competitiveness Lee and Karpova (2018) reformulate the definition of competitiveness. They define competitiveness as an ability to achieve a high standard of living through productivity growth in the new global environment where knowledge becomes a critical factor. Although macroeconomic fundamentals have been considered critical in explaining economic development trends, CI has long been acknowledged as a strategic management means to improve competitiveness.
The Space Age, electronic, global village, and the fourth industrial revolution era have seen the phantasmagoria of events, ideas, and images exploding worldwide. This era has marked the dawn of a new reality, that is, truly global in its nature, snowballing with the enormity of its ideas and the velocity of its changes. The present era is even more accelerative so much that countries need to embrace CI to remain competitive in the global economy. Recently, CI has incorporated a new aspect called social CI. This relies on the notions of enterprise 2.0 and wikinomics, using systemic principles such as openness, participation, individual freedom, democracy, self-organisation, sharing and co-creation.
Previously, factors such as capital, labour and natural resources were traditionally considered as the only factors which matter for economic growth. The emergence of the internet and online databases has offered an almost inexhaustible supply of information that has caused information overload in many instances.
Reliable global information has become central to national success, whether the need is for knowledge of an industry, a market, a product or a competitor. CI is now at the cutting edge of competition, survival and growth of economies.
A country is likely to underperform without an appropriate CI infrastructure. Countries such as France, Sweden, Japan and Canada have recognised the value of government and industry working jointly in the development of an intelligence culture.
According to the strategic and competitive intelligence professionals website (SCIPs), CI has spread to six continents with 53 international chapters distributed as follows; North America (28), Australia (1), Europe (10), Asia (8), Africa (3), and South America (3). SCIP now has overs 300 ambassadors, 280 certified professionals, and 480 thought leaders.
The new paradigm shift in development economics is based on self-analysis, self-reliance, and self-renewal, which would seem to necessitate a development-orientated intelligence policy in a country.
According to Degerstedt (2015), the objective of CI is to understand how the surrounding competitive environment will impact an organisation — by monitoring events, actors, trends, research breakthroughs, and so forth — in order to be able to make relevant strategic decisions. A major trend in the world today is the increasing competition in global and digitalised markets where the speed of change and innovation is becoming faster than ever before due to developments in information technology. CI provides a better understanding of the dynamic global world. However, Søilen (2017) argues that new technology is also a threat to companies as today every individual is a potential spy. He further argues that corporate espionage has also become a big problem with its consequences still underestimated.
- Alexander Maune is a Talmudic scholar, researcher and consultant as well as a member of IoDZ
- Scott M Leeb is staff member at the University of Johannesburg’s Information and Knowledge Management Department