Analysis of Factors Which Impact on a Country's Economic Development and Competitive Advantages

Abstract

Competitiveness, as one of the key factors in a country’s development, enables improvement of the overall atmosphere for individuals and for firms, and for the country itself when compared with other similar entities. Since change is not just desired but required, it becomes clear that change is one of the preconditions for survival in world markets. This paper examines the theory of competitiveness, according to which the competencies of certain countries were not inherited, but created through strategic choices and their implementation, based on knowledge and developed infrastructure, high technology and innovation. In this context, analyses of competitiveness indicators are of great importance. Based on these it is possible to evaluate business success at company and industry level, by comparing numerous macroeconomic (macroeconomic policy, market infrastructure, institutional development) and microeconomic factors (business environment, sophistication of company operations and strategies). For the purposes of this study, we analyzed the World Economic Forum methodology, which contributes to a better understanding of the competitiveness profile of certain countries and how they can improve and specialize. Certain rankings help the creators of economic policy to shape and evaluate national results in terms of competitiveness, which further assists firms in improving their competitiveness in relation to other firms. The creation of a highly competitive economy is a complex and continuous task for any country that wishes to develop, and in that context the role of the state in creating an environment that will stimulate competitiveness is paramount, as this is a way to mitigate the effects of recession and determine the speed of economic recovery.