4. Determinants of competitiveness

Public policies do not usually have a direct impact on performance indicators, but they do have a direct impact on the determinants of competitiveness

The determinants of competitiveness are the most critical elements of the theoretical framework presented in Illustration 1, as they are the factors which affect the performance of a territory in terms of the outcomes (final and intermediate) analysed in the previous sections. Additionally, whereas public policies cannot usually directly impact outcome indicators, it is however possible to reinforce the factors which underpin these results.

The theoretical framework identifies three groups of determinants of competitiveness: those associated with firm performance; those associated with the structure of clusters and groupings of related activities in the economy; and those associated with the business environment in general. Although it would be possible to think of many potentially interesting elements in each one of these groups, the available information is normally limited for the European regions as a whole. The aim of this section is to focus the analysis on certain aspects which are particularly significant and for which there exist available data for the regional comparison, and accompany them with other analyses specific to the Basque Country in which the comparison is made not with regional, but national data, then present an overview in order to learn how the Basque Country ranks in comparison with these other regions.

  1. Among the outcome indicators considered, disposable income per capita and equivalent median income are in fact directly influenced by the effect of valuation and transfers.