Reflective journal

  • Category:
    Business
  • Document type:
    Essay
  • Level:
    Undergraduate
  • Page:
    2
  • Words:
    1129

2Comparing the Competitive Advantage of Nations

Comparing the Competitive Advantage of Nations

Comparing the Competitive Advantage of Nations

Introduction

In measuring the country’s competitive advantage, the Gross Domestic Product (GDP) comes into play. The process through which the GDP is measured considers various elements that indicate the nature of the civilian’s lifestyle. When the GDP is high, this will be an indication that the lifestyle for the people in the particular nation is advanced, and mostly, the productivity of the state is also high. When the GDP is low, this means that people in such a country could be living is a difficult life condition which constitutes to little national yield. In this case, most of the residents embrace the below poverty line lifestyle. Given this, such is a tool essential for measuring the wellbeing of a nation. Factors that an analyst will have to consider in this case entail the level of technology, financial market development, innovation, infrastructural development, higher education and training among many more others.

Financial Market Development

For a country to embrace the competitive edge over the others, the government has to ensure that its financial markets work to promote the cause. In this case, there ought to be an availability of financial markets whose investors will feel confident to invest their money. For that reason, such financial institutions ought to be stable and trustworthy to the members of the public and even investors that could both be domestic or foreigners. Given this, the government should engage the appropriate regulations that will oversee the proper running of the financial markets. It is from this perspective that the financial market is going to embrace the required growth and consequently support the country’s competitive advantage.

Technology Readiness

Countries that are highly developed embody the use of latest technologies in the running of essential functions. Mostly, industries in these countries embrace every new technology in the market, and this constitutes to the overall growth. In the current world, the use of latest technology has been deemed productive more than the older ones. In this case, the latest technology is efficient, fast, produces large volumes of goods per unit time and evolves with the current world. Consequently, countries that have profoundly engaged the use of modern technology have gained more competitive advantage than their counterparts still using the ancient one. In this effect, governments have to employ all the measures possible to make sure that they evolve with the latest technology as this contributes much to their competitiveness.

Infrastructure

In any form of production, proper infrastructure ensures growth and development of such an economy. For instance, good transport network ought to be developed to provide easy transport of goods and services from one destination to the other. Moreover, this will support marketing of products and services since people need to be ferried from one destination to the other by the use of the same transport network. Therefore, it becomes imperative for a country to build adequate airports, harbors, roads and railways to help in the carriage of people, goods, and services. Moreover, all the centers of production need to be supplied with adequate electricity that will enable the constant production of goods. Appropriate communication systems will also have to be installed to enable the country to compete favorably with others.

Higher Education and Training

In the present world, higher education and training play a crucial role in augmenting the country’s competitive advantage. Only the workforce that is trained and learned can quickly adapt changes such as technologically related ones. For that reason, one way in which a country can engage in the creating its competitive advantage is by ensuring that there are enough institutions of higher learning in the country in which individuals can sharpen their levels of knowledge. Such an input will be highly welcomed in the industries, and this will ultimately add up to the country’s competitive edge.

Macroeconomic Environment

The presence of a suitable macroeconomic environment plays an important role is defining the country’s competitive advantage. In this case, the inflation rates have to be at the suitable condition as much of it might scare the investors away. In the same effect, the government has to reduce too many cases of unemployment as this has great implication to the country’s Gross Domestic Product. Furthermore, all people should be given a chance to contribute towards the national growth. If this happens to be the case, it will in turn help in making a robust competitive advantage.

Innovation

The ability of the available workforce in a given country to embrace change plays an instrumental role in determining the country’s competitive edge. Innovation entails coming up with new means of accomplishing tasks that could be more efficient than the previously used ones. Due to the growing demands and population, there is a need to come up with better and efficient means of production. Given this, innovation is ever playing a crucial role to satisfy the rising demands for goods and services. Countries with no ability to innovate have always lagged behind as they have to purchase technologies that have already been made elsewhere which proves expensive to them. Correspondingly, those countries that have embraced much innovation make their competitive advantage robust compared to others.

Goods Market Efficiency

Products produced by a state ought to attract a broad spectrum of consumers. For instance, in a situation whereby a nation is the sole producer of a given commodity, it is likely that such item will be in high demand in the market and therefore make its marketing efficient. All other nations will be seeking to purchase from such a country, and this will sharpen its competitive edge. Given this, it is reasonable when a country engages the production of a scarce commodity in the market as there are higher chances of growth and development.

Conclusion

To conclude, measuring the country’s competitive advantage require the use of GDP. Innately, the process through which the GDP is measured reflects numerous elements that designate the nature of the inhabitants’ lifestyle. In this case, when the GDP is high, this will be a suggestion that the lifestyle for the people in the specific nation is advanced, and mostly, the productivity of the state is as well high. On the contrary, when the GDP is low, this means that individuals in such a nation could be living is a challenging life circumstance which set up low domestic yield. In this regard, most of the residents embody the below poverty line lifestyle. In the view of this, such is a tool indispensable in gauging the wellbeing of a nation. Factors that an analyst considers, in this case, involve the level of technology, financial market development, innovation, infrastructural development, higher education and training among many more others.