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Competition happens to be of vital criterion to assess the success of an industry, company, or country. According to the World Economic Forum competitiveness is the set of policies, factors, and institutions that determine the productivity level.

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What is Meant by Global Competitiveness?

According to the Int. Institute of Management Dev. competitiveness is a sphere of economic knowledge that analyzes the policies and facts that shaped a nation’s ability to form and maintain a surrounding that sustains higher value creation besides higher prosperity for its individuals.

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Significance of Global Competitiveness

There are several benefits of global competitiveness and some of them are mentioned below:

  • Increases productivity
  • Encourages FDIs
  • Increases the living standards
  • Maintains trade balance between export and import of a nation
  • Gains macroeconomic stability
  • Global competitiveness is important for the economic growth of a nation

The importance for global competitiveness can’t be ignored as it involves addressing some major issues, like government practices, macroeconomic policies, skills and education upgrading, the price of doing business, sustainable environment management, R and D and innovation, total factor productivity, and conformity with the international standards.

As a business operates within the guiding framework of a government, it does assume a highly vital role in enlarging competitiveness. A government should be highly business responsive by reengineering measures and systems to be highly approachable and lessen bureaucratic red tape which hinders the efficiency of a business. Forming a synchronized, stronger, and integrated network between the private sectors, government agencies, and academia would improve business.

Efforts must be taken to augment the integrity and accountability of public service. A manufacturing firm faces many problems and challenges and they form huge problems to effectual global and local competitiveness. The globally competitive companies make use of a broad knowledge base, internet technology, ad a global human network for flourishing against the international competition without the need for major travel, investment, or an international presence.

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The Factors that Affect Global Competitiveness

A business firm abides by the regulations and rules that a government forms. The government does assume a highly vital role in improving competitiveness. The governments need to endorse trade by reengineering processes and systems. Again, it is important for the governments to be highly responsive by lessening bureaucratic red tape. Some vital factors that affect global competitiveness are as follows:

Physical infrastructure – Physical infrastructure plays a crucial role in augmenting a country’s global competitiveness. It will result in a smoother movement of items, services, and people. Additionally, it also facilitates quicker delivery of services and goods.

Perfect coordination amongst public sector agencies – A business environment should coordinate among public-sector agencies. In this context, the finest processes would be proposing incentives and support for HRD, education, R and D activities, encouraging creativity and innovativeness, productivity improvements of SMEs, and augmentation of industrial blocks.

High TFP (Total Factor Productivity) – This is considered a boon for economic development. This shows the efficiency and synergy of both HR and capital utilization and endorses national competitiveness.

Augmenting R and D activities – The augmentation of R and D activities that result in innovation, original technological development, and creativity is also a vital factor.

Productivity campaigns – A productivity campaign is vital as it endorses public awareness besides proposing processes for using productivity techniques and tools.

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