Thursday, July 25, 2019

Discuss the extent to which factor availability is no longer an Essay

Discuss the extent to which factor availability is no longer an effective explanation of the competitiveness of regions or count - Essay Example The essence of competitiveness and allied issues is to gain an insight into the economical wellbeing of the country and the effective allocation of resources. This paper concerns with the factors that drive regional competitiveness, and whether factor availability is a contributing factor to regional competitiveness in the modern era or not. The essay looks into the concepts of competitiveness and perfect competition from a microeconomics perspective. Considering the factors that influence competitiveness at the level of the firms, one can establish that competitiveness depends on the capacity of the firms to compete, progress and to make profits (Martin n.d.). Competitiveness Defined Competitiveness is present in the potential of the firm to make products on a regular basis which fulfill the criterion of open market with respect to price and quality amongst other factors. Moreover, it also relates to the competence of the firms in making products that are profitable. Competitiveness at a microeconomics level buttresses the notion that for a firm that fulfills the criterion of an open market, it needs to be more competitive than other firms in order to capture a share of the market. Likewise, a firm that is not competitive will not be able to sustain a large market share and over the period of time, it will be forced out of the business unless it is supported by some artificial protection (Martin n.d.). When considering competitiveness between regions, one has to look beyond the competitive and noncompetitive firms, and to include the common traits of competitiveness present between regions. According to the Sixth Periodical Report on the Regions, regional competitiveness can be defined as the â€Å"the ability to produce goods and services which meet the test of international markets, while at the same time maintaining high and sustainable levels of income or, more generally, the ability of (regions) to generate, while being exposed to external competition, r elatively high income and employment levels† (Martin n.d.). Different Perspectives on Competitiveness The notion of competitiveness of the national level is much more debatable and ambiguous. Although policy makers consider the attainment of competitiveness with respect to other firms as the main goal of the economic policy, competitiveness has been severely criticized and has been considered to be primarily â€Å"meaningless† (Martin n.d.); in fact, P Krugman, in his book Pop Internationalism, states that national competitiveness is a risky mania and has a vague macho ring to it (Krugman 1996). He argues that it is not correct to make a comparison between firms and countries because firms can be forced out of business if they are uncompetitive, but the same trend does not apply to countries. At the level of the firms, gaining market share affects other firms in the industry negatively, but on the regional or national level, the success

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