Competitiveness: Perceptions, Reflections and Directions

Volume 14, Number 2 Article by D K Banwet , K Momaya , H K Shee September, 2002

Competitiveness: Perceptions, Reflections and Directions :

Competitiveness has gained importance as a subject of study during the last decade or so. The initial stimulus came during the eighties when the US experienced an economic decline. As American firms started losing ground all over the world in significantly important industries such as automobile, shipbuilding, electronics and steel, researchers began focussing attention on country and industry level competitiveness. Given India’s low and declining ranking in the Global Competitiveness Report and the World Competitiveness Yearbook, it is imperative that academics, industrialists and policy makers make a serious study of the factors that drive competitiveness at all levels, and take appropriate action.

The concept of competitiveness has drawn the attention of researchers and academics from a variety of perspectives using different methodologies. Banwet, Momaya and Shee attempt a systematic review of the large volume of literature available on the subject. Beginning by defining competitiveness and related terminologies like comparative advantage, competitive advantage and core competence, the authors go on to provide an overview of measurement methods used, standardisation of which has become difficult due to the multifaceted dimensions of competitiveness researched by authors from diverse disciplines.

The competitiveness of a country contributes to industry competitiveness, which in turn is responsible for country competitiveness. Because it is crucial to study company competitiveness and identify sources of competitiveness, the firm is adopted as the unit of analysis by many researchers. Literature on competitiveness thus falls into three categories, national, industry and company level competitiveness. Technological competitiveness is another dimension. Each category of literature revolves around the issues related to definition, variables and sources of competitiveness. Sources of competition range from macroeconomic phenomena (government policies, exchange rates, interest rates, trade balance and government deficits, availability of cheap and abundant labour and bountiful natural resources, etc) to microeconomic factors including networking and clustering, and company strategies and management practices. Describing these factors while also stressing the inter-relatedness of competitiveness at all levels, the authors attempt to provide an integrated framework combining country, industry and company competitiveness.

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