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National Competitiveness and Quality of Life

The competitiveness of a country is determined by the competitiveness of enterprises, industries, types of economic activity, clusters, municipalities, regions. However, the company’s competitiveness is affected by the national competitiveness in which it operates. Almost every sector of the economy contains the following five factors of competitiveness, including quality, price, advertising, research and development, and service. These principles affect the quality of life, which may vary since its indicators largely depend on the stage of economic development of the country.

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The core of the theory of national competitiveness is the concept of M. Porter, who formulated several vital provisions. The first is company competition forms competitive sectors of the country’s economy that ensure national competition (Fainshmidt et al., 2016). Then, national competitiveness is not inherited but created by inland producers. Moreover, national competitiveness is directly determined by the labor capacity, which is determined mainly by the pace of innovation introduction (Fainshmidt et al., 2016). Finally, the ultimate goal of increasing national competitiveness is to improve the living standards of the country’s population (Fainshmidt et al., 2016). This understanding of national competitiveness shows that labor productivity in the economy determines the level of its competitiveness and directly affects the quality of life.

For evaluating the region’s ability to cover the requirements of the population, it is proposed to use indicators identifying the quality of life. As a rule, areas with a capacity to deliver products and services have high financial stability and, accordingly, the welfare of the population (Guerrero et al., 2016). It reflects the well-being of the society and is characterized by a system of quantitative and qualitative indicators: the volume of real income per capita, the level and dynamics of prices for essential commodities, housing conditions, the level of education, and medical services (Guerrero et al., 2016). There is a directly proportional relationship between regions’ ability to produce goods and services, the population quality of living, and financial stability.

In terms of the knowledge-based economy, companies are increasingly competing not only for investments or consumers but also for attracting qualified, initiative specialists capable of innovative ideas. It is necessary to pay more attention to the measures aimed at increasing the purchasing power of the community, and above all, attracting investments to create new, highly paid jobs (Guerrero et al., 2016). If the region’s competitiveness in reference to wages and investor appeal decreases, then further development of the company and introductions of technical advances will become impossible; therefore, the living standards of the population will either remain at the same level or begin to decline.

One of the most significant factors characterizing competitiveness is consumer purchasing power. In the development of any region, innovation processes are currently becoming a priority. Moreover, human capital is the principal element in the productive forces of an innovative economy. The quality of life of the population is determined primarily by people’s incomes. In addition to the mentioned aspects, it is advisable to take into account the environmental component of competitiveness (Borsatto & Amui, 2019). This is because of conditions of anthropogenic pressure, along with increased emissions of harmful substances into the atmosphere (Borsatto & Amui, 2019). The state of the environment is increasingly affecting the quality of life of the population.

Competitiveness affects the quality of life in different ways. An indirect characteristic of the well-being of a region is the level of consumption of goods and services in the territory since it indirectly reflects the quality of life of the population in the area. The competitiveness is the ability to stably produce and consume goods and services in competition with those produced by other enterprises due to the most complete and proper innovation implementing and development, subject to environmental requirements, and the continuous advancement of the nation’s quality of life.


Borsatto, J. M. L. S., & Amui, L. B. L. (2019). Green innovation: Unfolding the relation with environmental regulations and competitiveness. Resources, Conservation and Recycling, 149, 445-454.

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Fainshmidt, S., Smith, A., & Judge, W. Q. (2016). National competitiveness and Porter’s diamond model: The role of MNE penetration and governance quality. Global Strategy Journal, 6(2), 81-104.

Guerrero, M., Urbano, D., & Fayolle, A. (2016). Entrepreneurial activity and regional competitiveness: Evidence from European entrepreneurial universities. The Journal of Technology Transfer, 41(1), 105-131.

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