New Horizons in Regional Science series
Edited by Philip Cooke, Mario Davide Parrilli and José Luis Curbelo
Chapter 8: Assessing Country Competitiveness: The Case of Spain
* Mercedes Delgado and Christian Ketels INTRODUCTION 1. There is increasing consensus about the need for context-specific policy advice to improve country prosperity (see, for example, Rodrik, 2007). In recent work we have developed a robust and novel diagnostic tool to assess country competitiveness, grounded in the latest academic research and designed to provide practical insights to policy-makers (see Porter et al., 2008; Delgado et al., 2010a). In this chapter we document the main features of the diagnostic tool and use it to assess Spain’s competitiveness and develop policy recommendations. There are many things that matter for country prosperity. Our framework incorporates a wide range of these factors into an integrated structure with three main areas: endowments, macroeconomic competitiveness and microeconomic competitiveness (see Figure 8.1). Macroeconomic competitiveness has two related areas: social infrastructure and political institutions (SIPI) and macroeconomic policy (MP). Policies in both of these areas are controlled mainly by central governments. Microeconomic competitiveness (Porter, 1990; 2003a; Porter et al., 2007) includes the sophistication of company operations and strategies (COS) and the quality of the national business environment (NBE). These factors are influenced by multiple stakeholders, including different government agencies, companies, and institutions for collaboration. While macroeconomic competitiveness sets general conditions that create opportunities for higher productivity, microeconomic competitiveness has a direct impact on the way these opportunities are actually translated into better performance. Building on the Business Competitiveness Index (for example, see Porter, 2003a; Porter et al., 2007) and on the recent literature on composite indices (see, for example,...
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