National Competitiveness Council (NCC) - Ireland

Source: National Competitiveness Council (NCC)

The National Competitiveness Council (NCC) defines competitiveness as 'the ability to achieve success in international markets leading to better standards of living for all. It stems from a number of factors, notably firm level strategies and a business environment that support innovation and investment, which combined lead to strong productivity growth, real income gains and sustainable development'.

National Competitiveness Framework Model

The 'competitiveness pyramid' below illustrates the framework used by the National Competitiveness Council for understanding national competitiveness. It distinguishes between the 'inputs' into national competitiveness and the 'outputs' of national competitiveness.

The 2003 Annual Competitiveness Report (ACR) and Competitiveness Challenge are organised around this framework:

• The ACR benchmarks Ireland's performance for both inputs and outputs relative to 15 other countries.
• Drawing from the analysis in the ACR, the Competitiveness Challenge makes recommendations on the policy actions needed to improve Ireland's international competitive standing. These recommendations are grouped under the five 'policy input' headings shown on the bottom level of the pyramid.

The NCC Data Centre (opens in new window) also makes use of the competitiveness pyramid to provide up-to-date graphs and data tables showing Ireland's competitiveness in comparison to 15 other countries.

The Competitiveness Pyramid

Inputs

The 'inputs' (in the bottom row of the competitiveness pyramid) represent the foundation stones of the economy and are the primary drivers of competitiveness. The Council believe that it is within these particular areas that policymakers can have the greatest impact on competitiveness. It is crucially important to measure Ireland's competitiveness at the input level and then benchmark it vis-à-vis best international practise. This allows policy makers to identify policy weaknesses and thus design specific policies to address these concerns.

This process of measurement and analysis is brought to the next stage in the Competitiveness Challenge 2003 which contains key recommendations, each of which addresses an area of concern as identified in this document.

Intermediates

The second stage of the competitiveness pyramid is the 'intermediate' stage. Building competitiveness in the intermediate area (moving up the pyramid) allows for strong economic stability, as productivity is maximised in parallel with increases in real wages. This area, whilst measurable, is neither a complete input nor output area.

Outputs

Finally, a range of national performance indicators are then examined to provide an overall macroeconomic view of Irish competitiveness. These indicators are defined as 'output' indicators and are not directly within the control of policymakers. Ireland’s performance in these areas is directly related to the quality of previous policies instituted at the input level and the ability to build a strong intermediate stage of competitiveness. Competitive gains at the lower levels of the pyramid allow growth potential to be maximised at the apex, whilst providing suitable conditions for sustainable development.

The NCC Data Centre

Up-to-date graphs and data tables showing Ireland's competitiveness in comparison to 15 other countries are available in the NCC Data Centre (opens in new window).

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