The National Competitiveness 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 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 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.
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.
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.
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.
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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Each year the NCC publishes a report benchmarking Ireland's competitiveness performance.
Ireland's Competitiveness Scorecard provides a comprehensive assessment of Ireland's competitiveness performance, using a range of statistical indicators drawn from data sources such as the OECD, Eurostat, the CSO and others.
The Council also publishes Ireland's Competitiveness Challenge. The Competitiveness Challenge report focuses on the national competitiveness issues of most importance to the enterprise sector over the medium term and identifies policy recommendations required to address these issues. Ireland's Competitiveness Challenge builds on the data published in Ireland's Competitiveness Scorecard.
Over recent years, a report benchmarking the Costs of Doing Business in Ireland has become a regular feature of the Council’s annual output, as has an annual Submission to the Action Plan for Jobs, which focuses on actions to enhance competitiveness in the short term.
In addition, the NCC publishes a range of other papers, submissions and reports on a variety of issues of importance to Ireland’s competitiveness. For example, NCC Competitiveness Bulletins focus on individual topics and highlight issues of concern to the Council, setting out briefly why a particular issue is of concern, and providing a summary of actions designed to enhance Ireland's competitiveness.
You can view all NCC publications and papers here.
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