Welcome to my Definitions competitiveness-vii. Competitiveness - Definition and Measurement Problems
Much has been spoken about the need to almejarmos greater competitiveness, only being more competitive is that we will succeed, growth through competitiveness, etc. Anyway, so popular and widespread, this term is becoming an economic meaningless jargon. In this context, we discuss some of the concepts of competitiveness definitions and measurement issues related to competitiveness.
First, it highlights the complexity of the subject. When we use the term competitiveness, we are involving a multitude of variables that make it necessary we specify the context in which we are working, we can be talking about competition between companies in certain productive sectors in a given nation, between nations, in the short or long-term, ex-ante or ex-post, etc. Finally, the complexity of the issue requires us to give a focus to analysis but can incur the mistake of using the word in a sense so general that loses its meaning or relevance.
We begin this discussion with some of the definitions given to competitiveness and its most relevant indicators, whilst commenting on the limitations of each setting.
The problem of excessive generality can be spotted in Chesnais (1981), which defines a too broadly international competitiveness, characterizing it as the ability of a country to compete internationally.
An approach more specific and already considering the measurement problems can be found in the worldwide Competitiveness review of the World Economic courthouse, which analyzes the competitiveness of 80 countries. In the study, competitiveness is defined as the ability of a country to sustain economic growth in the coming years and measured by two different but complementary indicators. The first called Competitive Growth Index (Growth Competitiveness Index - GCI) assesses the conditions for economic policies and public institutions of a country, as a basis for economic growth in the coming years, associated with the existing conditions for the expansion of technological innovation.
The second indicator, called Current Competitiveness Index (Current Competitiveness Index - CCI), assesses the microeconomic aspects of a country, taken from the analysis of companies, market structure, and microeconomics policies as the basis for this competition.
Together, the competitive growth rates (GCI) and Current Competitiveness (ICC) seek to assess the ability of each studied economy to compete in a free market environment. We can see that in addition to a setting slightly more sophisticated, not limiting and costs. It uses two indicators together, easing the limitation that each index would have individually. Throughout this text, we will emphasize the use of indicators together in order to reduce the limitations of every indication and surround a great number of factors.
A setting somewhat different, focused on capital appreciation, but careful to avoid excessive general is found in Possas and Carvalho (1990), featuring competitiveness as the power to define (formulation and implementation) recovery strategies capital, since based on economic and non-institutional perspective.
The long-term connection between the competitiveness of changes of changes and modifications in performances trade for goods manufactured.
Haguenauer (1989) * grouped the competitiveness of notions into two groups: those that favor the performance in terms of sales and market penetration, which are expressed in market share indicators and its expansion; and seeking its roots in production efficiency, using the technical coefficients or productivity as indices. Possas (1997) believes that the use of the two indices together is a more appropriate way to measure the competitiveness of a company in a particular industry.
Possas, discussing the problem of competitiveness in the concept ex-ante and ex-post, featuring ex-post competitiveness and performance effectively been the agent in question. This depends on the competitiveness ex-ante and the success of the strategy chosen by the firm. But in most cases what matters is the ex-ante ability to compete in the near future. Possas proposes the construction of a sectoral vector to determine ex-ante competitiveness.
Cohen and Zysman claim that "competitiveness cause the degree to which a nation can, under conditions of free and equitable market,manufacture tools and services that pass the experiment of international markets by expanding both the real income of its citizens." different approach to the traditional but much sagacious in order to understand the competitiveness as among that objective to a specific purpose and is not in itself the ultimate goal.
An important comment should be made here, it is obvious that the use of indicators of market share type and profitability have drawbacks and turn away from reality with great frequency, thus a possible way to reduce these negative effects would we use the two indices together whilst still have inconveniences, these are significantly reduced when compared to the use of the indicators individually.
For Possas, technology affects quality and prices, acting indirectly in the competitive process. It seems increasingly latent competitiveness associated primarily with product differentiation through technological innovation and not on prices and costs.
We should point out that the generation of technology itself, is no reason to increase the automatically competitiveness but only with high interaction and application on reducing costs or increasing quality in the products of the various segments in which it operates, can bring some benefit when it comes to increasing competitiveness, in terms of the company or a group of countries. Only with high advantage over the old technology, a new technology is applied and becomes a cause of increasing competitiveness, either through significant improvement in the quality of the product or through significant reduction of costs or changing the technological paradigm in the industry, enabling a comparative advantage that provides a superprofit for a short period of time.
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