Governments Importance in National Competitveness

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‘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 borders), has changed how nations compete in international trade and investment thus has discredited the role of the state as an effective function for governments, being the main provider of goods and services as the central planner and controller of national economy. This reinforces the notion that in a global economy, governments must work cooperatively with the private sector, international financial institutions to develop institutions that support and sustain market systems through which enterprises of all sizes engage in regional and global trade and investment. Globalisation has not only increased international flows of capital and technology but has increased levels of international political interactions and cultural interchange as well. Governments must therefore accept the rise in globalisation and build its policies upon it. Institutional structure is where governments should start
Strong institutional structure for market competition must hold in order to gain participation in the g...

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...ations. When they operate fairly, effectively, and efficiently market economies facilitate competitiveness and stimulate economic growth, create jobs, raise incomes, provide opportunities for saving and investment, and give people the chance to improve the quality of their lives. Competitiveness in the global economy can generate the income needed for people, businesses, and governments to protect their environment and conserve natural resources, reduce poverty, and enhance human assets. Properly steered, economic growth enables organisations of civil society to work closely with business and government to strengthen the life support systems that improve human conditions and protect the global ecosystem. Therefore it is clear that governments’ role in creating national competitiveness is fundamental especially with the state of the world surrounded by globalisation.

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