The World Economic Forum defines competitiveness as the "set of institutions, policies and factors that determine the level of productivity of a country."
Another way to view it is to consider how it promotes wellbeing. A competitive economy is productive, leading to growth, increased income levels, and hopefully improved wellbeing.
Productivity has been found to be the main factor driving growth and income levels. Income levels are closely linked to welfare. Understanding the components that impacts this chain of events is important.
In essence, rising competitiveness means increasing prosperity. The World Economic Forum believes that competitive economies are most likely to grow more sustainably.
The WEF (World Economic Forum) breaks down countries' competitiveness into 12 areas. These are grouped into three sub-categories.
While the world is getting better at measuring things, there is still no fail-safe way to include a country's environmental record into its competitiveness core. Nor is there a way to measure if and how competitiveness makes people happy.
However, comparing the competitiveness of those economies engaged in monetary stimulus programmes, those with high competitiveness scores were more successful in driving economic growth.
Basic drivers of competitiveness such as infrastructure, health, education, and markets will always be important, but the data suggests that a nation's performance regarding technological readiness, business sophistication and innovation is as important in driving competitiveness and growth.
Leaders of emerging markets need to know that helping their economy succeed is more nuanced than previously thought.
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