Can we measure the competitiveness of a country?

THE ECO SCAN – Many studies attempt to measure this concept which contains many variables. Explanations.

“The concept of competitiveness is difficult to grasp because it encompasses many different economic variables which make its measurement complicated”, indicates Marc Lassort, researcher at the.

Economists are accustomed to differentiating between price competitiveness, which measures a country’s ability to offer its products for export at a lower price than its neighbors, and non-price competitiveness, which measures a country’s ability to tax. its products by factors other than price such as product quality, branding, innovation and services.

According to, price competitiveness results from:

• production costs, namely the cost of capital (interest rates), the cost of labor (wages), the cost of intermediate consumption (energy, raw materials, components and equipment purchased)

• productivity (efficiency of labor or capital)

• transport costs;

• the exchange rate;

“In general, a good measure of competitiveness should satisfy at least three essential criteria: first, to cover all sectors exposed to competition, namely to represent all traded or tradable goods subject to this competition, and only those- the ; second, to include all markets where competition occurs; and, third, be developed from absolutely comparable data at the international level. In practice, the generally available indicators present imperfections at the level of these three criteria ”, warns the.

However, many studies attempt to measure competitiveness. For example, the World Economic Forum publishes an annual Global Competitiveness Report in which it ranks the most competitive countries. This report is based on more than one hundred indicators organized into twelve “pillars”: institutions, infrastructure, macroeconomic environment, health and primary education, market size, technological development, innovation, product market efficiency, labor market efficiency, higher education and vocational training, changes in financial markets, sophistication of business activities and innovation.