Competitiveness. Its Advantages and Disadvantages

6864 words 28 pages

The world economy has entered an era of total competition. Traditional barriers have begun to fall, new-sophisticated competitors have emerged, and global rivalry increased. There are many examples around the world where the traditional sources of comparative advantage are less valuable than initially perceived for the development of a strong, competitive economy.
The new type of development is one that involves the whole market and all institutions in the economy. Productivity is that component which creates a competitive advantage rather than a comparative advantage; the latter only addresses only the supply side of the market system and ignores demand, historical chance and the role of government. Indeed, the model of
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Product Competitiveness represents the totality of features that assures a product some advantages in comparison to similar competitor's products. When determining the product competitiveness, there should be a reference to cost, quality and demand for that product.
The main determinant of national competitiveness and branch competitiveness is the competitive capacity of the enterprises that form the economic branch and country's economy. In this way, the levels of competitiveness may be presented as a pyramid. At the base of this pyramid there will be found the product's competitiveness, at the top of the pyramid – national competitiveness [1, p. 141]
For evaluating the national competitiveness there can be used the same methods as international institutions and organizations, making some adjustments, depending on the peculiarities of every country and which refers to the following [1]:
1. Determining the evaluation criteria of the factors that influence the economic environment of a country and establishment of their value in the global appreciation of competitiveness;
2. Evaluating the established indicators for every country;
3. Ranking the countries according to their position for every group of factors and estimating the world ranking, for the newly industrialized countries, the assessment is done aside


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