‘National competitiveness is a measure of the extent to which a country is capable of generating more wealth than its competitors in world markets’. It is known that in order for economies to develop and increase social welfare within its country; national competitiveness must exist to achieve this. Economic performance, government efficiency, business efficiency and infrastructure are all factors of national competitiveness. Throughout this essay I will discuss the government’s importance and assessing different ways in which it can influence national competitiveness.
It is important to clarify that over past decades, globalisation (the movement toward greater integration and interdependence among people and organisations across national …show more content…
Making sure the macro side of the economy is strong will also aid national competitiveness.
Countries seeking to expand international trade and investment, create jobs and generate income and improve standards of living must create domestic markets in which most goods and services are available for consumers. Governments can help increase competition by allowing prices to reflect true scarcities. Governments can use macroeconomics adjustment policies such as taxation and interest rates to encourage market mechanisms that can efficiently and effectively allocate resources. This requires financial liberalisation and reducing price controls but will in turn increase efficiency and flexibility of producers and consumers to respond to market signals. This is only possible with government interventions.
Policies promoting market competition should prevent collusion through antitrust laws and reduce barriers to entry. At the same time, those countries that face inflation and declining output must ratify economic stabilisation policies aimed at reducing balance-of-payments deficits. Liberalisation of trade regulations and investment policies will encourage exports and foreign direct investment which all contribute to increasing national competitiveness. This allows new products
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2 Globalisation is the process by which the world is becoming increasingly interconnected as a result of massively increased trade and cultural exchange. Globalisation has increased the production of goods and services. The biggest companies are no longer national firms but multinational corporations with
Globalisation refers to the process of interaction and integration among the people, companies as well as governments of countries around the world, particularly in terms of trade, investment and technology. The process of globalisation, has profound impacts on the environment, culture, political systems, economic developments, prosperity and human physical well-being in the societies around the world.
Globalisation- Globalisation is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. This process has effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in
Government plays a crucial role in the market economy by ensuring the laws and regulation are abide by, and control the production of the private sectors, although, over the years its efforts in controlling such economies are minimal and insignificant. Market forces of demand and supply play a major role in setting trends that such market economies follow. Economic growth, inflation, interest rates, wage rates of workers and unemployment rates are some of the fields the government takes part in controlling, to boost the Gross National Product (GNP) of the state.
Globalisation has a very long history of the social development of the world it started many years ago. It left a remarkable sign throughout the time which many people use this term of globalisation. It often
The country can maximize their wealth by putting the resources in the most competitive industries. Government created comparative advantage rather than free trade because now easier moves the production processes and the machines into countries that can produce more goods (Yeager & Tuereck, 1984). However, many countries now move to new trade theory suggests the ability firms to limit the number of competitors associated with economic scale (reduction of costs with a large scale of output) (Krugman, 1992). The comparative advantage occurs when two-way trade in identical products, it will useful where economic scale is important, but it will create problem with this model. As a result, government must intervene in international trade for protection to domestic firms (Krugman, 1990)
Economic policy of nations and states, tariffs are tools used to control the flow of goods, services and resources being brought into the country. The overall purpose is to create security for the domestic industry from the imported product. These products can sometimes be less expensive to purchase than the goods being manufactured in the local economy. (McEachern, 2015) The government does this either stimulate or deflate trade with other countries. (Fontinelle, 2012)
Strong government support created competitive advantages in the aircraft industry and led Embraer to become a global player. As a factor condition in the determination of national competitive advantage by Porter (Exhibit 1), the government established an environment where Embraer was able to procure raw materials easily through no tax or duty on imports.
Countries are enabled by free international trade to specialise or to focus in the production of the goods in which they have a comparative advantage. Specialisation countries can take the benefit of efficiencies generated from increased output and economies of trade. The size of the firm’s market are increased by the international trade which results in lower average costs and increasing in productivity, as it ultimately leads to increase in production.
The theory of globalization today is a field of intensive debate as the efforts towards defining globalization most often highlight its individual aspects. According to Held and McGrew (1999), “globalisation is an idea whose time has come, yet it lacks precise definition”. Despite the ambiguity of the term “globalisation,” the use of the term, according to Held and McGrew, reflects increased interconnectedness in political, economic and cultural matters across the world creating a shared social space. Given this inter-connectedness, globalisation may be defined as: “a process which embodies a transformation in the spatial organisation of social relations and
Globalisation can be defined as the movement toward economic, financial, trade, and communications integration by countries and their populations globally. It is a constant process and it has resulted in the intertwining and generalisation of the needs and wants of people
In the article “The Competitive Advantage of Nations” Michael Porter describes a diamond shaped relationship of forces that define a country’s potential for being competitive in a specified industry. The four points on the diamond representing the different forces are: factor conditions; demand conditions; firm strategy, structure and rivalry; and related and supporting industries. According to Porter, the four points apply pressure to each other resulting in a national
A definition of “Globalisation” would be that : “Globalisation typically refers to the process by which different economies and societies become more closely integrated3.”