Mauro Libi: Competitiveness; what is it and how does it contribute to growth?

     According to the World Economic Forum, competitiveness is "the set of institutions, policies and factors that determine the level of productivity of a country". A country is considered to be competitive when it promotes the well-being of its inhabitants. The economy is competitive when its productivity leads to growth and allows higher income levels of its citizens who achieve greater well-being. Keep in mind that productivity is the main factor leading to growth and rising income levels, which are closely related to human well-being. Increasing competitiveness increases the prosperity of the people who conforms the societies.

     Competitiveness economies are more likely to grow sustainably by providing equal opportunities for all, which means all society members are more likely to enjoy and benefit from the economic growth fruits. The competitiveness of countries is measured through three sub-indices:

- Basic requirements that comprising institutions, infrastructure, macroeconomic environment, health and primary education. These elements are considered as fundamental and are usually the first to be addressed by countries in the early stages of development.

- Efficiency enhancers comprising the markets, whether financial, labor or goods. In this subscript, training and higher education, technological preparation, should be considered. These aspects allow determining the degree of preparation of the economies for the transition to more advanced economies.

- Innovation and sophistication is a subscript that encompasses the more complex areas of competitiveness needed by economies to establish businesses and research establishments with high qualification standards.

     Countries with the highest ratings on these pillars exhibit advanced economies with high gross domestic product per capita. Countries with the highest levels of competitiveness are more successful in boosting economic growth than those that are outdated in terms of competitiveness. It has been established that nations, apart from the basic competitiveness engines described above (infrastructure, health, education and well functioning markets) are considered to be competitive, but more if they take into account aspects such as technological layout, sophistication and business innovation.

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