Competitive landscape: Towards a better understanding of the competitive landscape

The competitive landscape refers to the context in which competitiveness arises. The analysis of the competitive landscape attempts to identify and understand the drivers and contextual elements that facilitate the evolution of competitiveness. To put it simply, the competitive landscape enables us to analyze a particular environment to observe the conditions under which competitiveness emerge. The roles of governments, industries and businesses are fundamental for the competitive landscape.

Through the development of particular policies, for example, governments facilitate a competitive landscape in which competitiveness can flourish. Also, governments encourage scientific advancement by the establishment of research and development funding schemes. Industries, similarly, shape the competitive landscape by leading businesses to adopt particular strategies. An industry's research and development strategy can significantly drive the competitiveness of firms in particular sectors. On their part, firms contribute to the adequate contextual conditions of the competitive landscape by striving to use available resources productively thereby helping countries to achieve prosperity.

The effectiveness of the governments, industries and firms' contribution to the construction of the competitive landscape depends on increased knowledge intensity among key players. That is to say the capacity of those involved to absorb the knowledge that drives a competitive landscape and their ability to constantly update that knowledge.

In this sense an effective competitive landscape is based on the optimal use of technology and innovation. These elements, for example, ensure the development of firms' core competences which ultimately solidify the degree of competitiveness in a particular country. Increasing knowledge intensity, in addition, requires the development of human capital. Technology can only have an impactful effect if a country's labor force has the skills required for its effective implementation. Accordingly, without the optimal use of technology innovation becomes stagnant.

The following table summarizes the fundamental elements of the competitive landscape.

Drivers Key concepts
Government Absorptive capacities
Industry Increase knowledge intensity
Businesses Human capital development


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Recommended readings

Bettis&Hitt. 1995."The new competitive landscape," Strategic Management Journal, Vol.16, pp. 7-19.

Blomstrom&Sjoholm. 1999. "Technology transfer and spillovers: Does local participation with multinationals matters?" European Economic Review, Vol. 43,pp. 915-23.

Cohen &Levinthal. 1989. "Innovation and learning: the two faces of R&D," The Economic Journal, Vol. 99, pp. 569-96.

Griliches. 1991. "The search for R&D spillovers," NBER Working Paper series #3768.

Hitt, Keats &DeMarie.1998. "Navigating in the new competitive landscape: Building strategic flexibility and competitive advantage in the 21st century," Academy of Management Executive, Vol. 12, pp. 22-42.

Joshi, Chi, Datta& Han .2010."Changing the competitive landscape: Continuous innovation through IT-enabled knowledge capabilities," Information Systems Research, Vol. 21, pp. 472–495.

Kokko.1994. "Technology, market characteristics, and spillovers," Journal of Development Economics, Vol. 43, pp. 279-93.

Narula&Marin. 2003. "FDI spillovers, absorptive capacities and human capital development: evidence from Argentina," MERIT-Infonomics Research Memorandum series, paper #2003-016.

Suggested Websites

The IMD World Competitiveness Center's Yearbook

UNDP Human Development Report