|a a macroeconomic perspective which deals with internal and external balance at country-level and focuses on real exchange rate management as the principal tool for competitiveness;|
|b a business strategy perspective which is concerned with rivalries between firms and countries and a limited role for public policies in fostering competitiveness;|
|c a technology and innovation perspective that emphasises innovation and learning at the enterprise and national-levels and active public policies for creating competitiveness.|
Given the diversity of thinking on the issue, it is not surprising that the academic debate on competitiveness has become so convoluted and emotional. There is also little sign of a consensus being reached over practical guidelines for policy makers. The inconclusive state of the academic debate means that the concept of competitiveness remains somewhat elusive particularly at the national level. Furthermore, the connection between national and enterprise-level competitiveness still seems vague and there appear to be contradictory views on its policy implications.
Against this background, this chapter assesses the concept of industrial competitiveness and policies to enhance it in developing countries attempting to integrate with the world economy. Our main concern is the competitiveness of the manufacturing sector rather than the broader notion of economic competitiveness (i.e. the competitiveness of the economy as a whole). The chapter begins by examining the application of traditional approaches-notably, perspectives emanating from macroeconomics and business strategy-to analysing issues of industrial competitiveness and public policies in developing countries. Having highlighted the strengths and weaknesses of traditional approaches,