Competitiveness
The National Competitiveness and Productivity Council takes a broad definition of competitiveness: "Competitiveness refers to the ability of firms to compete in markets. Ireland’s national competitiveness refers to the ability of the enterprise base in Ireland to compete in international markets".
National competitiveness is a broad concept that encompasses a diverse range of factors and policy inputs including education and training, entrepreneurship and innovation, Ireland’s economic and technological infrastructure and the taxation and regulatory framework.
For the National Competitiveness and Productivity Council, the goal of national competitiveness is to provide Ireland’s people with the opportunity to improve their living standards and quality of life. Improving living standards depends on, amongst other things, raising incomes and providing employment. To raise incomes and grow employment, productivity gains are necessary but in an economy with a small domestic market, this requires a healthy exporting sector to achieve economies of scale necessary for productivity gains. For a vibrant exporting sector, Ireland must maintain its national competitiveness.
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The Framework Model
The National Competitiveness and Productivity Council uses a “Competitiveness Pyramid” to illustrate the various factors (essential conditions, policy inputs and competitiveness outputs), which combine to determine overall competitiveness and sustainable growth.
Sustainable Growth
At the apex of the Competitiveness Pyramid is sustainable growth. Competitiveness is not an end in itself, but is a means of achieving sustainable improvements in growth and living standards. The ultimate goal of economic policy making is to achieve broad based improvements in people's well-being. The Council monitors progress towards this goal by assessing economic, social and environmental dimensions of wellbeing. The annual Competitiveness Scorecard benchmarks three elements of sustainable growth, namely income (growth rates, levels and distribution), quality of life, and environmental sustainability.
Competitiveness Outputs
The outputs of competitiveness are represented in the second (blue) tier of the Competitiveness Pyramid. These can be seen as metrics of current competitiveness. These metrics cover business performance, costs, productivity and employment. The indicators considered in this tier are defined as "competitiveness output" indicators and are not directly within the control of domestic policymakers. Ireland's performance in these areas is directly related to the quality of previous policies instituted at the input level.
Policy Inputs
The third (yellow) tier of the pyramid focuses on “competitiveness policy inputs”. Four categories of inputs are examined - the business environment, physical infrastructure, clusters and firm sophistication and knowledge and talent. These represent the drivers of current and future competitiveness. It is within these particular areas that policymakers can have the greatest impact on competitiveness.
Essential Conditions
A range of factors which are either beyond the immediate reach of policy makers or which are determined by geography or other exogenous factors (e.g. the global economic climate) but which have a significant impact upon relative competitiveness are reflected in the bottom (green) tier of the pyramid.
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Key Outputs
Each year the NCPC publishes an annual report Ireland's Competitiveness Challenge on the key competitiveness and productivity challenges facing the Irish economy and suggests specific policy actions to address these challenges.
As part of its work, the NCPC also periodically publishes:
• A Competitiveness Scorecard;
• The Costs of Doing Business report;
• A Productivity Statement; and,
• A series of competitiveness bulletins and other papers on specific competitiveness and productivity issues.
You can view all NCPC publications and papers here.
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