is the shift in business attitudes towards greater focus on cost control, productivity, and international competitiveness. how well we do in the future will depend on us getting a number of things right. above all, we must ensure that we sustain and build on the progress made on the inflation, fiscal, and business fronts. but other things are also important. we must find the level of taxation that offers scope for entrepreneurship and risk - taking, while also allowing a level of government services that gives canadians the degree of social support that can help them accept, respond, and adjust to a rapidly changing world. we must also think about the skills canada needs to be able to exploit fully the benefits of rapid global economic change. this means strategic partnerships between employers and employees to promote on - the - job training, and partnerships between industries and educational institutions to improve skills and to develop new ones, suited to today's advanced technologies. this is very important if we are to avoid skill shortages that could constrain the expansion of our economy. conclusion to conclude, our economy has been expanding robustly over the past five years, inflation has remained low, employment and incomes have been rising. and we are now seeing encouraging signs of a productivity payoff from the restructuring of the past decade — a payoff which, if sustained, would provide the basis for rising standards of living for all canadians in the future. some of you may wonder if this conclusion is not overly optimistic in the face of a slowing u. s. economy. since tomorrow is our next pre - set date for announcing changes in the bank rate, i hope you can appreciate that i cannot comment on the current economic situation. we will be doing that in tomorrow's press release. what i can say is that the points i have been making here today are about the improvements we have seen in the fundamental, longer - term trends in our economy. because of these improvements, our economy is now in a better shape than it has been for some time to deal with all kinds of external shocks — including fluctuations in u. s. demand for our products. what i see ahead are challenges, but not the serious problems we were facing ten years ago. today, we have an economy with sound foundations, well - placed to rise to these challenges and prosper.

the cost structure of skill - based services. • it is now feasible to “ unbundle ” production of different types of goods and services. india does not necessarily have to be a low - cost producer of certain types of goods ( e. g., computers or discs ) before it can become an efficient supplier of services embodied in them ( e. g., software or music ). at the same time, it must be recognised that the “ death of distance ” and the growing integration of global product, services and financial markets in recent years have also presented new challenges for management of the national economy – not only in india but all over the world. the trend towards integration of markets, particularly financial markets, is by no means an unmixed blessing. unlike the old days, a heavy price may have to be paid by national economies for somnolence, sloth and non - conformity to generally accepted international norms and standards of macro - economic management, disclosure, transparency and financial accountability. another consequence of recent global trends is the greater vulnerability of national economies to developments outside their own borders. a crisis in any one or a group of countries, can be transmitted to other countries – including countries which may not have any strong economic linkages with crisis - affected countries. thus, the ’ nineties have been marked by a large number of currency crises ( for example, in mexico, russia, east asia and brazil – and currently argentina and turkey ) ; substantial swings in exchange rates ( including the exchange rate of three leading currencies – the dollar, the euro and the yen ) ; and run ups in asset prices followed by sharp collapse ( for example in japan and east asia earlier and the united states last year ). while the crises initially occur in one or two specific countries, their adverse effects are felt across the world. while we must be careful, on the whole, in my view, – the death of distance, the services revolution, and the mobility of capital – which characterise globalisation – present unprecedented opportunities for india. the primary source of comparative advantages today are : skills and ability to adapt and change. and, india has the advantage – of skills, of entrepreneurship and of managerial competence in taking advantage of these changes. if what i have said is correct, then, why are we not jumping with joy and optimism? why are we so “ unglobalised ” in terms of our share in trade, investment or communication? transition from a closed to a