What is competitiveness?

Almost all commentators on public policy have called for an improvement in Jamaica’s competitiveness position to help the economy achieve meaningfullevels of economic growth and development. However, they disagree on what competitiveness means. To the economist, competitiveness narrows down to critical macro-economic variables such as a stable exchange rate, low interest rates and low inflation. To the private sector, competitiveness is generally confused with competition. For them, competitiveness means winning market share from your competitors and reporting higher profitability over the previous year.  However, if we are to develop policies to help to reverse the negative trend in Jamaica’s competitiveness position, there has to be some commonality regarding what is meant by the concept. As a starting point, it is important to note that Paul Krugman and Michael Porter, two renowned commentators on the subject, quipped: for competitiveness, everything matters. This is a profound statement. It shows that economic competitiveness cannot be narrowed down to any single variable. Krugman and Porter are suggesting that the schools, the church, the roads, the family unit, the policies on competition, the institutions on property rights etcetera, all help to drive economic competitiveness. However, one may say that this is idealistic and we cannot  have a clear understanding  of the concept since too many variables are involved. 

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About the Author

Densil A. Williams

Densil Williams is Pro- Vice Chancellor and Professor of International Business, The University of the West Indies.