ABSTRACT
This part is devoted to defining and analyzing the concept of competitiveness. A competitive economy is one that manages its resources and capabilities in order to maximize the productivity of its economic system. Sometimes, the country’s resources are given, such as natural resources and geographical position. Sometimes, they are built through policies, such as the level of education and the physical infrastructure. Productivity is, however, not an end in itself, for productivity must be—for a country to be competitive—conducive to job creation, salaries, tax revenues, international investment, and subsequently prosperity and quality of life for people. Part 2 describes two opposite examples, the Netherlands and North Korea, as representing what competitiveness means and does not mean. The second part is devoted to a detailed analysis of productivity trends in the last 70 years. The main takeaway is that the prosperity levels of the world have not increased substantially in the last two decades. There are several explanations for the so-called “productivity puzzle” that we entertain. Finally, and to describe alternatives to competitiveness in order to measure a nation’s success, we detail the experience of Bhutan with its Gross National Happiness Index.
