The International Institute for Management Development defines competitiveness as "a field of economic knowledge which analyzes the facts and policies that shaped the ability of a nation to create and maintain an environment that sustains more value creation for its enterprises and more prosperity for its people."
The World Economic Forum defines global competitiveness as "the ability of a country to achieve sustained high rates of growth in gross domestic product (GDP) per capita."
Business firms abide by the rules and regulations formed by the government. The government assumes a very important role in enhancing competitiveness. Governments must promote trade by reengineering systems and procedures. Governments should be more responsive, reducing bureaucratic red tape.
Physical infrastructure plays a critical role in improving the global competitiveness of a country. This will lead to the smoother movement of people, products, and services, facilitating faster delivery of goods and services.
The business environment should be as such that it improves coordination among public-sector agencies. The best methods include providing support and incentives for R&D activities, HRD and education, encouraging innovativeness and creativity, facilitating the improvement of industrial blocks, and productivity enhancements of SMEs.
High total factor productivity (TFP) is a boon for economic growth. It shows the synergy and efficiency of both capital and HR utilization and promotes national competitiveness.
Productivity campaigns are important because they promote public-awareness and provide mechanisms to use the productivity tools and techniques.
Intensifying R&D activities that contribute to creativity, innovation, and indigenous technological development is also an important factor.
Improving the capacities of SMEs to become increasingly productive suppliers and exporters makes strategic sense.
GLOBAL COMPETITIVENESS INDEX
The Global Competitiveness Reports asses the competitiveness landscape of 144 economies of the world. It provides information about the drivers of their productivity and prosperity. The Report is the most comprehensive assessment of national competitiveness worldwide.
To check out its 2014-15 edition, please click here.