international competitiveness

• Why is international competitiveness considered a really important topic?

  Because countries compete to maintain growth and increase living standards
• What is the definition of international competitiveness?

  The ability of a nation to compete successfully overseas
• What is the primary reason international competitiveness is important for a nation?

  To sustain improvements in living standards and output
• In terms of international competitiveness, what is the key objective for a nation?

  To compete successfully overseas
• What three specific aspects can be examined to determine a country's competitiveness?

  • Price competitiveness of goods and services
  • Nonprice competitiveness
  • Ability to attract foreign direct investment
• What is essential for a nation to compete successfully overseas regarding its products and services?

  That they are price competitive
• What can allow a nation to compete effectively even when price competitiveness is lacking?

  Nonprice factors like branding and innovation
• Besides price and non-price competitiveness, what is another crucial factor for a nation's competitiveness?

  Attracting foreign direct investment
• What does the ability of a country to attract FDI suggest about its competitiveness?

  It suggests the country is quite competitive
• What are the three fundamental measures of competitiveness for a nation?

  • Unit labor costs
  • Global Competitiveness Index (GCI)
  • Terms of trade
• Which measure is considered the driving factor in determining competitiveness?

  Unit labor costs
• What is the formula for calculating unit labor costs?

  Total labor cost divided by output produced
• How does high productivity affect unit labor costs, assuming labor costs remain constant?

  It drives down unit labor costs
• How do strict labor regulations, such as high minimum wages, typically affect unit labor costs?

  They increase unit labor costs
• How do unit labor costs affect the price competitiveness of a country's goods?

  High unit labor costs reduce price competitiveness
• What does GCI stand for as a measure of competitiveness?

  Global Competitiveness Index
• What kind of measure is the Global Competitiveness Index (GCI)?

  An all-encompassing measure of competitiveness
• What factors are considered in the Global Competitiveness Index (GCI)?

  Infrastructure, innovation, and tax levels
• What happens after a nation's determinants of competitiveness are accounted for in the GCI?

  A rating is given for each determinant
• In the context of the Global Competitiveness Index (GCI), what does improving a nation's rank indicate?

  Improved international competitiveness
• What is the formula for calculating the terms of trade?

  (Index of export prices / index of import prices) * 100
• According to the text, what does a deterioration of the terms of trade imply for a nation?

  Potentially improved price competitiveness
• What are the key determinants of international competitiveness?

  • Unit labor costs
  • Labor flexibility
  • Tax regimes
  • Innovation
  • Infrastructure
  • Regulation
  • Economic stability
  • Skills in the labor force
• What can unit labor costs be dissected into?

  Productivity, minimum wages, skills
• How does labor flexibility relate to a nation's international competitiveness?

  More flexibility leads to more competitiveness
• What aspects of the labor force determine labor flexibility?

  Ability to move jobs and skill flexibility
• How do tax regimes, particularly corporation taxes, influence competitiveness?

  They stimulate technology and attract foreign firms
• How does innovation impact a country's competitiveness?

  It improves price and nonprice competitiveness
• How does strong infrastructure affect domestic firms' efficiency?

  It boosts their efficiency
• How does regulation typically affect the process of doing business?

  It enforces costs and makes it more difficult
• What is the effect of deregulation on prices in a nation?

  Prices tend to be lower
• How does a more stable climate affect a nation's ability to attract foreign direct investment?

  It makes it easier
• How should the determinants of competitiveness be linked to the three factors of international competitiveness?


  Each should improve at least one factor
• According to the video (made in 2015), what was the UK's ranking on the Global Competitiveness Index?

  Ninth in the world
• According to the video, what makes the UK competitive?

  Flexible labor force and low regulation
• According to the video, in what area does the UK struggle in terms of competitiveness?

  Price competitiveness
• What factors contribute to the UK's lack of price competitiveness?

  High minimum wages and low productivity