LATAM Revista Latinoamericana de Ciencias Sociales y Humanidades, Asunción, Paraguay.
ISSN en línea: 2789-3855, agosto, 2025, Volumen VI, Número 4 p 3115.
DOI: https://doi.org/10.56712/latam.v6i4.4494
Evolution of the concept of competitiveness: a chronological
review of the main theories and approaches
Evolución del concepto de competitividad: una revisión cronológica de las
principales teorías y enfoques
Arlethe Yarí Aguilar Villarreal1
arlethe.aguilarvll@uanl.edu.mx
https://orcid.org/000-0002-1438-2180
San Nicolás de los Garza Nuevo León. Universidad Autónoma de Nuevo León, Facultad de Ciencias Químicas
México
Jesús Fabián López Pérez
jesus.lopezpz@uanl.edu.mx
https://orcid.org/0000-0002-8283-6359
San Nicolás de los Garza Nuevo León. Universidad Autónoma de Nuevo León, Facultad de Contaduría Pública y
Administración
México
Artículo recibido: 03 de junio de 2025. Aceptado para publicación: 17 de septiembre de 2025.
Conflictos de Interés: Ninguno que declarar.
Abstract
This article offers a chronological overview of the ideas that have shaped the concept of
competitiveness, with the aim of showing its evolution and how it has changed and found new
applications over time. Through an in-depth review of the literature from the mid-20th century to the
present, it explores classical foundations—such as neoclassical economics and the theory of
comparative advantage—as well as recent approaches focused on innovation, intangible assets,
sustainability, and a more systemic view of competitiveness. Throughout the analysis, key moments
are identified that marked a shift in how the concept is understood: from a perspective focused solely
on prices and productivity to more comprehensive models that also consider social, technological, and
institutional factors. The study highlights how the concept has become increasingly interdisciplinary
and emphasizes the need to adapt theoretical frameworks to the current challenges faced by both
organizations and regions. This review aims to serve as a useful guide for those researching or working
on sustainable economic development who wish to gain a deeper understanding of the conceptual
foundations of competitiveness.
Keywords: competitiveness, economic theories, literature review, economic development,
innovation
Resumen
Este artículo ofrece un recorrido cronológico por las ideas que han moldeado el concepto de
competitividad, con el objetivo de mostrar su evolución y cómo ha cambiado y encontrado nuevas
aplicaciones a lo largo del tiempo. A través de una revisión exhaustiva de la literatura desde mediados
del siglo XX hasta la actualidad, explora los fundamentos clásicos —como la economía neoclásica y
la teoría de la ventaja comparativa—, así como enfoques recientes centrados en la innovación, los
1 Autora de correspondencia.
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ISSN en línea: 2789-3855, agosto, 2025, Volumen VI, Número 4 p 3116.
activos intangibles, la sostenibilidad y una visión más sistémica de la competitividad. A lo largo del
análisis, se identifican momentos clave que marcaron un cambio en la comprensión del concepto:
desde una perspectiva centrada únicamente en los precios y la productividad hasta modelos más
integrales que también consideran factores sociales, tecnológicos e institucionales. El estudio
destaca cómo el concepto se ha vuelto cada vez más interdisciplinario y enfatiza la necesidad de
adaptar los marcos teóricos a los desafíos actuales que enfrentan tanto las organizaciones como las
regiones. Esta revisión pretende servir como una guía útil para quienes investigan o trabajan en el
desarrollo económico sostenible y desean obtener una comprensión más profunda de los
fundamentos conceptuales de la competitividad.
Palabras clave: competitividad, teorías económicas, revisión bibliográfica, desarrollo
económico, innovación
Todo el contenido de LATAM Revista Latinoamericana de Ciencias Sociales y Humanidades,
publicado en este sitio está disponibles bajo Licencia Creative Commons.
Cómo citar: Aguilar Villarreal, A. Y., & López Pérez, J. F. (2025). Evolution of the concept of
competitiveness: a chronological review of the main theories and approaches. LATAM Revista
Latinoamericana de Ciencias Sociales y Humanidades 6 (4), 3115 – 3136.
https://doi.org/10.56712/latam.v6i4.4494
LATAM Revista Latinoamericana de Ciencias Sociales y Humanidades, Asunción, Paraguay.
ISSN en línea: 2789-3855, agosto, 2025, Volumen VI, Número 4 p 3117.
INTRODUCTION
In a business environment marked by dynamism and uncertainty, organizations are constantly under
pressure to maintain their competitiveness in order to ensure their continued presence in the market.
This scenario, already challenging for large corporations, becomes even more complex for micro and
small enterprises (MSEs), which must overcome multiple obstacles to remain active (Elikem Ocloo,
Akaba, & Worwui-Brown, 2014).
On a global scale, MSEs play a crucial role in contemporary economies, acting as generators of
employment, sources of income, and drivers of innovation and growth (OECD, 2021). However, in the
context of globalization, these enterprises face increasingly intense competition, particularly from large
multinational corporations, which tends to diminish their local competitive capacity (Porter, 2007). In
this sense, the business environment becomes a key factor that directly affects the growth and
sustainability of these productive units (Wanjohi, 2008).
In Latin America, MSEs constitute the structural backbone of economic activity. According to data from
the Economic Commission for Latin America and the Caribbean (ECLAC, 2021), MSEs represent 99%
of all enterprises and account for approximately 67% of employment in the region. Despite their
importance, their contribution to regional economic development remains limited due to a range of
barriers that restrict their competitiveness (Europyme, 2021).
In Mexico, MSEs represent a strategic component of the national economy, largely supported by a broad
base of micro and small enterprises. These organizations, particularly those linked to highly dynamic
sectors such as the automotive industry, face significant challenges in strengthening their competitive
position both nationally and internationally (Espinoza, Cavazos, & Cruz Álvarez, 2019).
Competitiveness has become a central concept in the business and economic spheres, representing
the ability of firms to maintain and enhance their profitability and market presence through advantages
related to products, services, and the conditions under which these are offered (Cámara de Diputados
del H. Congreso de la Unión, Secretaría General, 2021). According to the Mexican Institute for
Competitiveness (IMCO), competitiveness is defined as “the result of a set of structural economic,
social, and political conditions.” A competitive country is one that consistently attracts and retains
talent and investment. To measure this, IMCO developed the International Competitiveness Index (ICI),
which evaluates the capacity to generate, attract, and retain both human and financial capital (IMCO,
2021).
Within this context, micro and small enterprises (MSEs) in the steel industry play a significant role in
Mexico’s economic performance, particularly in the automotive sector (Nahuat Arreguin, Blanco
Jiménez, Cruz, & Buenrostro, 2016). These firms are critical drivers of national development, not only
through wealth creation but also as a primary source of employment (INEGI, 2021). However, recent
global, national, and state-level indicators reveal a decline in competitiveness in Mexico, including the
state of Nuevo León (Data México, 2023; IMCO, 2023; World Economic Forum, 2023). This downward
trend has been further aggravated by the economic crisis resulting from the COVID-19 pandemic (INEGI,
2022). Given that MSEs are key catalysts for regional economic and social growth, their
competitiveness is essential for mitigating unemployment and sustaining local development (INEGI,
2021). Following the global impact of the COVID-19 pandemic, the notion of competitiveness has taken
on new dimensions, incorporating sustainability principles. The concept of sustainable
competitiveness has emerged, defined as the set of institutions, policies, and factors that determine a
country's long-term productivity while ensuring social and environmental development (WEF, 2020).
This perspective aligns with the Sustainable Development Goals adopted by the United Nations in the
2030 Agenda (UN, 2015), integrating economic, social, and environmental dimensions into a systemic
and interconnected vision.
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The economic dynamism of Mexico is closely tied to the performance of MSEs, which underscores the
need to identify the factors influencing their competitiveness. In this regard, generating knowledge that
supports the strengthening and development of enterprises in strategic regions, such as the states of
Coahuila and Nuevo León, is a priority. Consequently, this study aims to provide practical insights and
tools that enable micro and small enterprises in the steel sector, particularly those oriented toward the
automotive industry, to design and implement strategies to enhance their competitiveness. The main
beneficiaries of this research are business owners, entrepreneurs, and managers operating within this
sector.
Over the past decades, the concept of competitiveness has undergone a significant evolution, shifting
from approaches focused exclusively on prices and productivity to more comprehensive perspectives
that incorporate innovation, sustainability, human capital, and technological capabilities. However,
despite the abundance of literature, there remains conceptual fragmentation and a lack of consensus
regarding the theoretical foundations that explain how the concept has changed and what factors
determine it in different historical and economic contexts. This situation hinders both the comparability
of studies and the development of consistent analytical frameworks for the formulation of policies and
business strategies.
Consequently, there is a need to conduct a chronological review that synthesizes the main theories and
approaches that have defined competitiveness, identifying key conceptual transitions, the predominant
variables in each period, and the trends guiding current research.
The concept of competitiveness is not only central in economic and business literature but also
influences the strategic decision-making of governments, industries, and companies. However, its
evolution has resulted in multiple, and at times contradictory, interpretations. A chronological review
offers several key contributions:
Theoretical Contribution: It clarifies the conceptual roots and illustrates how classical theories
(comparative advantage, costs, productivity) have been complemented or replaced by more recent
paradigms (innovation, sustainability, dynamic capabilities).
Practical Relevance: It provides an updated reference framework for designing public policies and
business strategies aligned with the factors that currently define competitiveness in highly dynamic
global environments.
Academic Value: It responds to the need to systematize and organize a concept dispersed throughout
the literature, offering a useful tool for researchers, students, and professionals seeking to understand
the evolution of the term in an interdisciplinary context.
In short, this work aims not only to describe the past but also to identify the trends that shape the
present and future of the concept of competitiveness, providing conceptual clarity and practical
guidance.
Therefore, the purpose of this article is to conduct a chronological review of the main theories and
approaches related to competitiveness, analyzing their evolution from traditional cost-based
perspectives to contemporary multidimensional frameworks. This review seeks to identify conceptual
shifts, highlight emerging determinants of competitiveness, and provide a comprehensive
understanding of how this construct has adapted to global economic transformations.
Accordingly, considering the diversity of existing definitions and interpretations of the term
"competitiveness," the following section presents an overview of the theoretical framework, including
definitions, relevant theories, and key studies that have shaped the understanding of competitiveness
over time
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The aim of this article is to review the conceptual framework that has guided the study of
competitiveness as a key variable in business dynamics, highlighting its theoretical evolution over time
and its applicability in emerging productive contexts. This article reviews the conceptual evolution of
competitiveness, with a particular focus on its application in SMEs, addressing both the foundational
theories and the recent transformations that have led to more comprehensive and sustainable
approaches.
The general objective is to analyze the evolution of the concept of competitiveness through a
chronological review of the main theories and approaches, identifying the key conceptual milestones
and their implications for current business and economic contexts.
METHODOLOGY
This study adopts a documentary and theoretical review approach, based on an exhaustive exploration
of specialized academic literature. The research design is based on a documentary and theoretical
review. Information sources included academic databases such as Scopus, Web of Science, EBSCO,
and Google Scholar, as well as institutional reports and books. The search and selection process were
designed to ensure the inclusion of relevant, high-quality sources addressing the conceptual evolution
of competitiveness.
The methodology includes:
• A literature review of scientific articles, books, institutional reports, and regulatory documents
from 1899 to 2023.
• A chronological and comparative analysis of the main theories and definitions of
competitiveness.
• A classification of approaches into three major schools of thought: firm-centered, environment-
centered, and the systemic perspective.
• The inclusion of analytical tables that systematize key concepts, authors, and theoretical
dimensions.
• The data used in this study come exclusively from secondary sources:
• Academic databases such as Scopus, Web of Science, EBSCO, and Google Scholar.
• Reports and publications from international organizations (OECD, ECLAC, WEF, IMD).
• Previous studies on SMEs, competitive strategy, innovation, and productivity.
The information is organized into thematic tables (e.g., theories by year and author, key definitions)
developed by the authors based on the literature review.
The following criteria were applied:
Databases and Sources
The literature review was conducted using recognized academic and institutional databases, including
Scopus, Web of Science, Google Scholar, and specialized repositories such as the World Economic
Forum (WEF), International Institute for Management Development (IMD), and institutional reports.
Books and seminal theoretical works by leading authors were also considered.
Keywords and Search Strategy
Search terms combined concepts related to competitiveness and its evolution, such as:
"competitiveness theory," "evolution of competitiveness," "systemic competitiveness," "competitive
advantage," "innovation and competitiveness," "digital competitiveness," and "sustainable
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competitiveness." Boolean operators (AND, OR) were used to refine the search and retrieve articles
addressing both classical and contemporary approaches.
Time Frame
The review covered publications from 1899 to 2023, starting with early theoretical contributions (e.g.,
Efficiency Theory) and extending to recent approaches incorporating digitalization, sustainability, and
resilience.
Inclusion Criteria
Peer-reviewed articles, books, and authoritative institutional reports.
Studies explicitly defining or conceptualizing competitiveness or proposing theoretical models.
Literature addressing macro (national), meso (sectoral), and micro (firm-level) perspectives.
Works that provide evidence or conceptual arguments relevant to understanding the chronological
evolution of competitiveness.
Exclusion Criteria
Non-scholarly sources (e.g., opinion pieces, blog entries).
Studies exclusively focused on operational performance or financial results without theoretical
contributions to the concept of competitiveness.
Articles lacking explicit discussion of competitiveness as a construct.
Selection Process
The initial search yielded a broad set of references, which were screened based on titles and abstracts.
Full-text reviews were conducted for works meeting the inclusion criteria. Redundant or overlapping
sources were eliminated. The final selection comprised seminal theoretical contributions, institutional
frameworks, and contemporary approaches that collectively illustrate the chronological development
of competitiveness theories and definitions.
DEVELOPMENT
Competitiveness has been extensively addressed in the literature as a complex and multifaceted
construct, supported by various theories that seek to explain its nature and determining factors.
From a theoretical standpoint, competitiveness has been conceived as a multidimensional concept,
with interpretations that vary according to the level of analysis. As such, it can be applied at global,
national, regional, sectoral, and even individual levels, allowing for its use in both macroeconomic
studies and research focused on specific business units.
Academic interest in competitiveness began to intensify in the late 1970s and was consolidated during
the 1980s, coinciding with the rise of strategic theories centered on competitive advantage and
organizational performance. Since then, a vast body of knowledge has emerged, addressing this
concept from multiple perspectives, including business strategy, productive economics, and territorial
development.
The concept of competitiveness has been extensively studied since the second half of the 20th century,
becoming a central theme in business strategy literature. In the 1970s, authors such as Ansoff (1976)
described it as the result of a strategic interaction between a firm and its environment, emphasizing the
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coherence between activities, products, and markets. Andrews (1977) offered an organizational
perspective, defining strategy as a pattern of objectives and policies aimed at achieving goals, and
introduced the SWOT analysis. Similarly, Miles et al. (1978) noted that effective strategy is configured
as an adaptive response to a changing market environment.
In the 1980s, Michael Porter revolutionized the study of business competitiveness by introducing his
theory of the five competitive forces, which laid the foundation for understanding industry dynamics
and strategic positioning (Porter, 1980; 1985). Concurrently, other scholars broadened the approach:
Scott (1985) introduced the concept at a national level; Hatten (1987) linked it to strategic management;
and Miller (1986) and Mintzberg (1987) explored internal dimensions such as innovation,
differentiation, and cost control.
In the 1990s, competitiveness became an increasingly complex and multidimensional phenomenon.
Porter (1990) redefined his focus on a nation’s ability to generate sustainable productivity, while Kotler
(1992) proposed competitive strategies based on a firm’s market position. Krugman (1994) provided a
critical view, arguing that national competitiveness cannot be assessed using the same logic as
corporate competition, since international trade often yields mutual benefits rather than zero-sum
outcomes. Other authors, such as Johnson et al. (1993), Ivancevich et al. (1997), and Lizcano et al.
(1999), enriched the discussion by emphasizing environmental factors, productivity, and strategic
actors.
In the 21st century, the approach to competitiveness has shifted toward a more comprehensive and
inclusive vision, especially regarding small and medium-sized enterprises (SMEs). Studies such as that
of Aragón et al. (2001) highlight the importance of managerial training as a driver of competitive
improvement. Likewise, the model proposed by Man, Lau, and Chan (2002) identifies internal resources,
external environment, and entrepreneurial characteristics as key determinants of SME competitiveness.
This review aims to explore the theoretical evolution of the concept of competitiveness, its most
influential approaches, and its application at various levels of analysis, with particular emphasis on the
SME context. Through a chronological analysis of major academic contributions, the goal is to provide
a solid conceptual framework for future research and strategies aimed at improving business
competitive performance.
The study of competitiveness in SMEs has become increasingly relevant due to the specific
characteristics that distinguish these organizations from large corporations. Man et al. (2002) point out
that SMEs differ significantly in organizational structure, responsiveness to environmental changes,
management styles, and their ways of interacting with other entities. These differences require tailored
analytical approaches, as competitiveness models designed for large firms often fail to capture the
short-term dynamics of SMEs.
In 2004, the World Economic Forum (WEF) institutionalized the Global Competitiveness Index (GCI),
establishing an international benchmark for evaluating national competitiveness. Since then, annual
reports have monitored economic progress and setbacks across countries (WEF, 2021). Nonetheless,
Casalet (2004) warns that the limited adoption of information and communication technologies (ICTs)
among SMEs creates structural imbalances, widening the gap they face when competing in globalized
environments.
Other studies, such as that of Greenwald et al. (2005), identify recurring constraints that limit SME
competitiveness, including small firm size, limited management capacity, and most critically, restricted
access to market intelligence. In response to saturated traditional markets, Kim et al. (2005) introduced
the Blue Ocean Strategy, which encourages the creation of untapped market spaces where competition
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becomes irrelevant. This strategy is built on four principles: creating new demand, focusing on the big
picture, reaching beyond existing customers, and ensuring commercial viability.
In the 2010s, the concept of competitiveness expanded toward more operational and sector-specific
approaches. Ahmedova (2015) defined it as efficiency in production, service delivery, and marketing
strategies, with an emphasis on low administrative costs and consumer preference. Rubio et al. (2016)
framed it as a firm’s ability to outperform competitors and achieve superior performance. Meanwhile,
Schwab (2018) developed a structured competitiveness model comprising 114 indicators grouped into
twelve pillars, allowing for a more detailed analysis at national and regional levels.
The objective of this article is to offer a critical review of these theoretical approaches, analyzing the
evolution and various interpretations of competitiveness over time.
THEORIES AND DEFINITIONS
The following section presents an analysis of the chronological evolution of theories related to
competitiveness. To provide a theoretical framework for the concept of competitiveness, the main
theories are presented chronologically in Table 1.
Table 1
Theories of Competitiveness
Year Name of the Theory Concept Author
1899 Theory of Efficiency Focuses on competitive advantage, which is
manifested through innovations within the
company, driving economic growth.
John M. Clark
1957 Market Behavior
Theory
Identifies six potential sources of a company's
competitiveness: market segmentation,
promotional communication, distribution
channels, product development, process
improvement, and product innovation.
Wroe Alderson
1959 Resource and
Capabilities Theory
Considers a company as a collection of
resources and a repository of knowledge; the
more resources it possesses, the more
individual competencies it has to offer various
services.
Pen Rose
1979 Economies of Scale
Theory
Indicates that economies of scale allow a
country to specialize in the production of certain
goods, resulting in cost savings.
Paul Krugman,
Kevin Lancaster
1980 Competitive
Advantage Theory
Rooted in the concept of productivity and its
determinants within the company. It focuses on
the value a company creates for its customers
that exceeds the costs.
Porter, M
1980 Management Theory Highlights the four-factor model for nations
competitive advantage, known as the diamond
model. Competitiveness depends on long-term
productivity, which requires a business
environment that supports continuous
innovation in products, processes, and
management.
Porter
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1990 Diamond Model of
Competitiveness
National or regional competitiveness depends
on four determinants: factor conditions (e.g.,
natural resources, infrastructure), demand
conditions (a sophisticated and demanding
local market), related and supporting industries
(presence of competitive suppliers and sectors),
and firm strategy, structure, and rivalry (local
competition conditions).
Porter
1990 Endogenous Growth
Theory
This theory suggests that investment in human
capital, innovation, and knowledge is crucial for
sustainable economic growth, and thus for
competitiveness.
Romer
1991 Resource-Based View
(RBV)
A firm's competitiveness is based on its unique
resources and capabilities. The theory has
evolved to include dynamic capabilities,
referring to a firm's ability to adapt, integrate,
and reconfigure internal and external
competencies to address changing
environments.
Barney
1993 Treacy-Wiersema
Theory
This theory proposes strategies different from
Porter, identifying companies that deliver
superior value through value disciplines:
operational excellence, customer intimacy, and
product leadership.
Treacy and
Wiersema
1993 Industrial
Organization Theory
Focuses on the interaction between internal
organization and input markets, highlighting
innovation and technology adoption as strategic
elements in competitive market distribution.
Jean Tirole
1995 Innovation-Based
Competitiveness
Theory
Emphasizes the central role of innovation in
competitiveness. Firms and economies that
invest in R&D and adopt new technologies tend
to be more competitive in the long term.
Freeman
1996 Systemic
Competitiveness
Theory
Argues that the creation of dynamic competitive
advantages in industrial sectors is based on the
interaction among the state, firms, intermediary
organizations, and society across four analytical
levels: meta (culture, values, social norms),
macro (national economic policies), meso
(infrastructure, technology, education), and
micro (individual firms and their ability to
compete).
Esser, Klaus
1998 Cluster Theory Suggests that economic organization and policy
should be understood through clusters, which
better reflect economic rationality. Porter
positioned clusters as a central unit of analysis
for competitiveness.
Porter, M
2000 Triple Helix Model Regional competitiveness depends on the
interaction between three spheres: universities,
industry, and government. Innovation and
economic development result from
collaboration among these actors.
Etzkowitz and
Leydesdorff
2000 Social Capital Theory Argues that social networks, trust, and norms of
reciprocity within a community can significantly
contribute to competitiveness. Communities
with high social capital tend to perform better
economically.
Putnam
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2005 Blue Ocean Strategy
Theory
Proposes that companies can achieve greater
competitiveness not by battling in existing
markets ('red oceans'), but by creating new,
uncontested market spaces ('blue oceans')
where competition is irrelevant.
Kim and
Mauborgne
2013 Inclusive and
Sustainable
Competitiveness
Theory
Promoted by the World Economic Forum, this
theory holds that competitiveness should
include social equity and environmental
sustainability alongside economic growth.
World
Economic
Forum
2014 Institutional
Entrepreneurship
Theory
Explores how institutional entrepreneur
individuals or groups who drive change within
institutions can influence competitiveness
through human agency and institutional
transformation.
Royston
Greenwood and
Roy Suddaby
2014 Innovation and
Entrepreneurship-
Based
Competitiveness
Theory
Highlights the role of innovation and
entrepreneurship as key drivers of regional and
national competitiveness. Regions that foster
innovation and support entrepreneurs tend to be
more competitive.
Erik Stam and
Tom Elfring
2014 Knowledge Economy
Theory
Introduces the concept of 'smart specialization'
within the knowledge economy. Suggests that
regions should identify and develop areas of
specialization based on their unique
comparative advantages and capabilities to
enhance competitiveness.
Dominique
Foray
2014 Dynamic Capabilities-
Based
Competitiveness
Theory
Focuses on a company's ability to integrate,
build, and reconfigure internal and external
competencies in rapidly changing environments.
Adaptability and continuous innovation are
essential for maintaining competitiveness.
David Teece
2017 Organizational
Resilience Theory
Posits that competitive organizations are those
capable of anticipating, preparing for,
responding to, and adapting to incremental
changes and sudden disruptions. Resilience is
seen as a strategic asset.
David Denyer
2020 Digital Economy
Competitiveness
Theory
Emphasizes the critical role of adopting
advanced digital technologies such as AI, big
data, and IoT maintaining competitiveness.
Digital competencies and technological
innovation are fundamental.
Erik
Brynjolfsson
and Andrew
McAfee
2020 Competitive
Resilience Theory
Focuses on the ability of firms and economies
to swiftly adapt to crises and unexpected
changes. Key components include supply chain
diversification and agile responsiveness.
Stephanie
Duchek
2020 Open and
Collaborative
Innovation Theory
Suggests that collaboration among companies,
universities, governments, and other entities
fosters innovation and boosts competitiveness.
Innovation ecosystems are crucial for
developing new ideas and technologies
collectively.
Henry
Chesbrough
2020 Talent-Based
Competitiveness
Theory
Stresses the importance of attracting and
retaining highly skilled talent to maintain
competitiveness. Continuous investment in skill
development is essential to keep pace with
market and technological changes.
Klaus Schwab /
World
Economic
Forum
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2020 Experience Economy
Theory
Holds that delivering superior experiences to
both customers and employees can serve as a
major competitive differentiator. Companies
should focus on creating memorable
experiences to gain market advantage.
Joseph Pine
and James
Gilmore
2021 Sustainable
Competitiveness
Theory
Proposes that environmental and social
sustainability must be integrated into
competitive strategies. Circular economy
models and net-zero emission goals enhance
competitiveness by addressing global concerns.
Michael Porter
and Mark
Kramer
2021 Data-Driven
Competitiveness
Theory
Emphasizes the strategic use of data and
advanced analytics in decision-making. Artificial
intelligence and data governance are central to
this approach.
Viktor Mayer-
Schanberger
and Thomas
Ramge
2021 Equity and Inclusion
in Competitiveness
Theory
Asserts that equity and inclusion are essential
components of sustainable competitiveness.
Policies that promote equal access to education
and employment enhance innovation and
productivity.
Mariana
Mazzucato
Source: Own elaboration based on the literature review.
Over the course of more than a century, various theories have addressed the concept of
competitiveness, from its earliest formulations in 1899 to more contemporary approaches in 2021.
Many of these proposals have focused specifically on small and medium-sized enterprises (SMEs),
recognizing their key role in productive systems. In this context, a compilation of key definitions
presented by different authors has been made, as shown in Table 2.
The theorethical analysis reveals the existence of three major schools of thought that interpret
competitiveness from different perspectives. The first views the firm as the primary agent responsible
for generating its own competitive development. The second emphasizes the influence of the external
environment, understanding competitiveness as the result of an integrated system in which external
factors are decisive. Finally, the third approach—systemic competitiveness—proposes a holistic vision
in which the interaction between meta, macro, meso, and micro levels is essential for achieving
sustained competitive performance.
From this perspective, the article contributes to the theoretical body of the Systemic Competitiveness
Theory by focusing on how microeconomic factors interact within a broader system.
Additionally, Table 2 presents a representative set of definitions of the concept of competitiveness,
particularly from the period when the term began to gain theoretical and practical relevance: the late
1970s and early 1980s.
Table 2
Definitions of the Concept of Competitiveness.
Year Authors Definition of Competitiveness
1984 Cohen, Teece, Tyson and
Zysman
Development of superior efficiency and an economy's ability
to increase output in high-productivity activities, which in turn
can generate high real wage levels.
1985 Report of the Select
Committee on Foreign
Trade
It is synonymous with the long-term profit performance of a
firm and its ability to compensate employees and provide
superior returns to its owners.
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1985 Thurow Competitiveness is a matter of positioning firms in
international markets rather than focusing solely on
productivity growth.
1985 Special Committee of the
House of Lords on
International Trade
A company is competitive when it can produce higher quality
products and services at lower costs than both domestic and
international competitors.
1989 Haguenauer Defines industrial competitiveness as the ability of an industry
to produce goods with specific quality standards required by
particular markets, using resources at levels comparable to
those in similar industries worldwide.
1990 Porter The company's ability to attract and retain activity, which
increases the prospects of achieving a competitive advantage.
Productivity is the fundamental element of a country's
competitiveness.
1990 Sharples and Milhan The ability to deliver goods and services at the time, place, and
manner preferred by customers, at better prices than other
suppliers, while at least covering the opportunity cost of the
resources used.
1994 Feurer, R. and
Chaharbaghi, K.
Competitiveness is relative, not absolute. It can only be
sustained if an appropriate balance is maintained among
various, sometimes conflicting, factors.
1994 Esser, Klaus; Wolfgang
Hillebrand; Dirk Messner;
Jörg Meyer-Stamer
They introduced the concept of systemic competitiveness,
emphasizing that the competitiveness of an economy rests on
goal-oriented measures articulated across four system levels:
meta, macro, meso, and micro.
1995 Industry Canada A company is competitive if it is profitable, meaning its
average cost does not exceed the market price of its product.
For Latin American SMEs, competitiveness implies their costs
do not exceed the average costs of competitors.
1995 Competitiveness Advisory
Group
Competitiveness involves elements of productivity, efficiency,
and profitability. It is a powerful means to achieve high living
standards and increased social welfare—a tool for achieving
goals.
1998 Buckley, P.J. et al. Competitiveness includes both efficiency (achieving goals at
the lowest possible cost) and effectiveness (having the right
goals). It encompasses both the ends and the means to
achieve them.
2001 Samuelson and Nordhaus Competitiveness refers to the extent to which a nation's goods
can compete in the market, largely depending on the relative
prices and quality of domestic and foreign goods and
services.
2001 Dussel It is the process by which companies efficiently use their
functional areas to enter international markets with high-
quality products.
2002 Man, Lau and Chan The Man Model identifies three key determinants of SME
competitiveness: internal (firm-specific) factors, external
environment, and entrepreneurial activity. It also considers
three dimensions of competitiveness (potential, process,
performance) and four attributes (long-term orientation,
controllability, relativity, and dynamism).
2003 Quiroga Proposed a mathematical model to determine SME
competitiveness by identifying critical factors and variables,
including both controllable internal elements and external
influences on performance.
2005 Romo and Musik Competitiveness stems from superior productivity, either by
achieving lower costs than national or international rivals or by
offering higher-value products.
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2005 Greenwald and Kahn Competitiveness refers to the ability of companies to compete
for markets, resources, and revenue.
2005 Lall, Albaladejo, and
Mesquita
Companies compete to capture markets and resources,
measuring competitiveness through relative market share or
profitability, using competitive strategies to improve
performance.
2005 Solleiro and Castañon Competitiveness also depends on the quality of a firm's
interactions with various internal and external factors.
2006 Rubio and Aragón The key to competitiveness lies in critical resources—those
that allow sustainable competitive advantages over time and
capture the rents generated. Identifying these in SMEs is
essential.
2006 De la Cruz, Morales, and
Carrasco
Developing capabilities within a sector and its firms boosts
the competitiveness of a range of products or services and
significantly influences their growth and differentiation
potential.
2007 Sánchez Competitiveness is the ability of a company to enter,
consolidate, or expand its market share, expressed through
factors like management skills, use of installed capacity, and
optimization of financial, human, and material resources.
2009 Mathews The ability of an organization—public or private, for-profit or
nonprofit—to achieve and sustain advantages that help
consolidate and improve its position within its socioeconomic
environment.
2009 Martínez et al. Suggests key indicators influencing competitiveness: external
indicators related to the business environment, technology
and innovation, human resources management, leadership
capability, internationalization, and financing.
2015 Mexican Institute for
Competitiveness (IMCO)
Capability to attract and retain investment and talent.
2015 International Institute for
Management
Development (IMD)
The ability of nations to create and maintain an environment in
which companies can compete effectively.
2017 Law for the Development
of Competitiveness of
Micro, Small and Medium
Enterprises
The quality of the economic and institutional environment for
sustainable private sector development and increased
productivity; At the firm level, the ability to sustain and
strengthen profitability and market share based on the
advantages of their products or Services, and the conditions in
which they are offered.
2017 Erik Brynjolfsson and
Andrew McAfee
Digital competitiveness refers to the capacity of economies
and organizations to adopt and leverage advanced digital
technologies—such as artificial intelligence, big data, and the
Internet of Things (IoT)—to enhance their innovation and
compete in an increasingly digital global environment.
2018 Erik Stam and Tom Elfring Competitiveness is based on innovation and entrepreneurship,
with support for entrepreneurs as key drivers of regional and
national competitiveness. Fostering a favorable environment
for the creation and growth of innovative businesses.
2018 Klaus Schwab / World
Economic Forum
Inclusive competitiveness focuses on policies and business
practices that not only promote economic growth but also
enhance social equity, reduce inequality, and achieve
sustainable economic development.
2019 Joseph Pine and James
Gilmore
The experience economy argues that competitiveness is
achieved by offering superior experiences to both customers
and employees. Focusing on creating memorable experiences
that differentiate a company in the market.
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2020 Henry Chesbrough Open innovation-based competitiveness refers to the ability of
companies to use both internal and external ideas to advance
their technology and products. Fostering collaboration among
businesses, universities, and other entities to enhance
innovation and competitiveness.
2020 Stephanie Duchek Competitive resilience is defined as the capacity of
organizations to anticipate, prepare for, respond to, and adapt
to unexpected changes and crises while maintaining their
competitive advantage.
2021 Michael Porter and Mark
Kramer
Sustainable competitiveness involves integrating
environmental and social sustainability practices into
business strategies to create long-term value for both the
company and society, thereby enhancing the firm’s
competitive position.
2021 Viktor Mayer-Schönberger
and Thomas Ramge
Data-driven competitiveness is the ability of organizations to
use data and advanced analytics to make informed and
strategic decisions. Leveraging artificial intelligence and data
governance to sustain and improve competitive advantage.
Source: Own elaboration based on the literature review.
In the review of specialized literature, competitiveness has been conceptualized by various authors as
a theoretical notion of a multidimensional nature, linked to a wide range of factors and levels of
analysis. Existing definitions indicate that this concept can be applied at different levels of aggregation:
from the global, national, regional, and local levels to industrial sectors, specific branches of economic
activity, or individual business units.
Academic interest in competitiveness intensified in the late 1970s and early 1980s, during which time
it began to establish itself as a central theme in studies on strategy and economic development. Over
time, a substantial body of research has emerged, exploring the concept from multiple perspectives,
including its connections to competitive strategy, comparative advantage, and productivity, among
other key elements.
Regarding its treatment as a dependent variable, it is important to note that definitions have
progressively evolved. In its early formulations—before the term “competitiveness” was formally
adopted—studies referred to closely related concepts such as “business strategy,” “competitive
strategy,” or “competitive advantage,” which laid the theoretical groundwork for the modern
understanding of competitiveness.
The following section presents some of the most relevant definitions identified in the literature.
Research objective
The objective of this review article is to analyze the theoretical evolution of the concept of
competitiveness by compiling and comparing the main definitions, approaches, and theories proposed
by various authors from the late 19th century to the present. It aims to provide a critical systematization
of the conceptual framework, with particular emphasis on its application across different levels of
analysis (global, national, sectoral, and firm level), and to highlight the implications of the systemic
competitiveness approach in the current context.
RESULTS AND DISCUSSION
This section presents the main findings derived from the systematic review of the literature:
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More than 30 key theories and approaches to competitiveness were identified, spanning the period
from 1899 to 2021. These have been systematized into chronological tables highlighting the author,
year, concept, and level of analysis.
The definitions of competitiveness vary according to the disciplinary perspective (economics,
management, innovation, regional development) and the level of application (macro, meso, micro,
meta). The concept of competitiveness has undergone significant transformation throughout history,
shaped by different economic, managerial, and technological paradigms. Its evolution can be
understood through a chronological review of the main theories and approaches that have contributed
to the development of this construct.
Early Foundations (1899–1959)
The origins of competitiveness studies date back to Clark’s Theory of Efficiency (1899), which
associated competitive advantage with innovations within the firm as drivers of economic growth.
Subsequently, Alderson (1957) introduced the Market Behavior Theory, identifying six potential sources
of competitiveness: market segmentation, promotional communication, distribution channels, product
development, process improvement, and product innovation. Shortly after, Penrose (1959) advanced
Resource and Capabilities Theory, conceptualizing firms as collections of resources and knowledge.
This perspective emphasized that the possession and strategic deployment of resources enhances a
firm’s ability to offer diverse services.
Structural and Productivity Approaches (1970s–1980s)
During the late 1970s, attention shifted toward macroeconomic aspects with the Economies of Scale
Theory by Krugman and Lancaster (1979), which suggested that specialization in the production of
certain goods reduces costs and enhances competitiveness. Entering the 1980s, Michael Porter
revolutionized the field with the Competitive Advantage Theory (1980), focusing on productivity as the
primary determinant of competitiveness and underscoring the value firms create for customers beyond
production costs. This period also introduced the Management Theory, emphasizing long-term
productivity and the importance of an innovation-driven business environment.
National Competitiveness and Strategic Perspectives (1990s)
The 1990s marked a turning point with the Diamond Model of Competitiveness (Porter, 1990), which
analyzed competitiveness at the national and regional levels based on four determinants: factor
conditions, demand conditions, related industries, and firm strategy and rivalry. Concurrently, Romer’s
Endogenous Growth Theory (1990) highlighted the strategic role of investment in human capital,
innovation, and knowledge for sustainable growth. At the firm level, the Resource-Based View (RBV)
(Barney, 1991) positioned unique resources and capabilities as the foundation of competitive
advantage, later evolving into the concept of dynamic capabilities. Additional contributions during this
decade included Treacy and Wiersema’s Value Disciplines (1993), which proposed differentiation
strategies based on operational excellence, customer intimacy, and product leadership, as well as
Tirole’s Industrial Organization Theory (1993), which emphasized innovation and technology adoption.
Innovation and Systemic Approaches (1995–2005)
From the mid-1990s onward, literature increasingly recognized innovation as a critical driver of
competitiveness. Freeman (1995) proposed the Innovation-Based Competitiveness Theory, linking R&D
investment to long-term advantage. Similarly, Esser et al. (1996) introduced the Systemic
Competitiveness Theory, which integrated interactions among the state, firms, and society across four
levels: meta (values and culture), macro (economic policies), meso (infrastructure and technology), and
micro (firm-level capabilities). In the late 1990s, Porter (1998) introduced the Cluster Theory,
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emphasizing the role of geographic and sectoral agglomerations in fostering competitive advantage.
By the early 2000s, models such as the Triple Helix (Etzkowitz & Leydesdorff, 2000) and Social Capital
Theory (Putnam, 2000) underscored the importance of collaboration between universities, industry,
government, and the role of trust and social networks in enhancing competitiveness.
Strategic Innovation and Sustainability (2005–2014)
The early 21st century introduced approaches oriented toward market creation and inclusive
development. Kim and Mauborgne’s Blue Ocean Strategy (2005) advocated for creating uncontested
market spaces rather than competing in saturated markets. By 2013, the Inclusive and Sustainable
Competitiveness Theory (World Economic Forum) emphasized incorporating social equity and
environmental sustainability into competitiveness frameworks. In 2014, multiple theories emerged,
including Institutional Entrepreneurship, Innovation and Entrepreneurship-Based Competitiveness, and
Knowledge Economy Theory, all highlighting innovation, entrepreneurship, and smart specialization as
cornerstones of competitive advantage. During the same period, Teece (2014) further developed the
concept of Dynamic Capabilities, stressing adaptability and continuous innovation.
Contemporary Perspectives (2017–present)
Recent theories reflect the influence of globalization, digital transformation, and societal challenges.
Denyer’s Organizational Resilience Theory (2017) identified resilience as a strategic asset for
competitiveness in volatile environments. From 2020 onwards, the literature expanded toward
digitalization and collaborative innovation, with theories such as Digital Economy Competitiveness
(Brynjolfsson & McAfee, 2020), Open and Collaborative Innovation (Chesbrough, 2020), and Talent-
Based Competitiveness (Schwab, 2020). Other approaches emphasized experience as a competitive
differentiator (Pine & Gilmore, 2020) and the strategic importance of agility during crises (Duchek’s
Competitive Resilience Theory, 2020). More recent contributions include Sustainable Competitiveness
Theory (Porter & Kramer, 2021), Data-Driven Competitiveness (Mayer-Schanberger & Ramge, 2021), and
Equity and Inclusion in Competitiveness (Mazzucato, 2021), which integrate sustainability,
technological innovation, and social inclusion as fundamental dimensions of competitiveness in the
21st century.
The concept of competitiveness has evolved considerably over time, reflecting changes in economic
theory, business strategy, and global dynamics. The following section synthesizes key definitions
provided by prominent scholars, institutions, and policy frameworks from 1984 to the present,
highlighting conceptual shifts and emerging dimensions.
Early Perspectives: Productivity and Market Positioning (1984–1990)
Initial definitions centered on productivity and efficiency as fundamental drivers of competitiveness.
Cohen, Teece, Tyson, and Zysman (1984) emphasized that competitiveness stems from superior
efficiency and an economy’s capacity to expand high-productivity activities, which enable higher real
wages. Similarly, the 1985 Report of the Select Committee on Foreign Trade equated competitiveness
with a firm’s long-term profitability and its ability to reward employees and generate superior returns
for owners. In the same year, Thurow (1985) argued that competitiveness is primarily about positioning
firms within international markets rather than focusing solely on productivity. Concurrently, the Special
Committee of the House of Lords on International Trade (1985) defined a competitive company as one
capable of producing superior-quality goods at lower costs compared to domestic and international
rivals.
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Expanding to Industry and Systemic Views (1989–1995)
By the late 1980s, competitiveness broadened to include industry-level considerations. Haguenauer
(1989) conceptualized industrial competitiveness as the ability to meet specific market quality
standards while maintaining resource efficiency comparable to global peers. Porter (1990) reinforced
productivity as the essence of national competitiveness, framing it as the capacity to attract and retain
activities that foster competitive advantage. Complementary definitions, such as that of Sharples and
Milhan (1990), focused on timely and cost-effective delivery of goods and services while covering
opportunity costs. During the mid-1990s, perspectives shifted toward relative and systemic
dimensions. Feurer and Chaharbaghi (1994) asserted that competitiveness is relative and sustainable
only when conflicting factors are balanced. Similarly, Esser et al. (1994) introduced the concept of
systemic competitiveness, emphasizing the articulation of meta, macro, meso, and micro levels in
shaping economic performance.
Operationalization and Measurement (1995–2005)
Institutional definitions emerged in the late 1990s, such as Industry Canada (1995), which linked
competitiveness to profitability—ensuring costs remain below market prices—and the Competitiveness
Advisory Group (1995), which associated it with productivity, efficiency, and profitability as tools for
achieving social welfare. Buckley et al. (1998) added a dual perspective by integrating efficiency (cost
control) and effectiveness (goal alignment). Entering the 2000s, scholars sought to operationalize
competitiveness for SMEs and national economies. Samuelson and Nordhaus (2001) framed
competitiveness as the ability of a country’s goods to compete internationally, influenced by relative
prices and quality. Dussel (2001) emphasized the role of efficient functional areas for
internationalization, while Man, Lau, and Chan (2002) proposed a model identifying internal, external,
and entrepreneurial determinants, as well as dimensions like potential, process, and performance.
Subsequent contributions by Quiroga (2003) and Romo and Musik (2005) highlighted productivity and
strategic cost reduction as key components, whereas Solleiro and Castañon (2005) underlined the
importance of interactions between internal and external factors.
Strategic Resources and Capability-Based Views (2006–2009)
From the mid-2000s, definitions increasingly focused on resources and dynamic capabilities. Rubio and
Aragón (2006) argued that critical resources sustaining competitive advantages are central to
competitiveness, particularly for SMEs. De la Cruz, Morales, and Carrasco (2006) extended this to
sectoral capability development, while Sánchez (2007) defined competitiveness in terms of expanding
market share through managerial skills and resource optimization. Broader interpretations emerged
with Mathews (2009), framing competitiveness as the sustained ability of organizations—regardless of
sector—to secure advantages within their socioeconomic environment. Martínez et al. (2009)
introduced indicators encompassing technology, human resource management, leadership, and
internationalization as determinants of competitiveness.
Institutional and Global Frameworks (2015–2018)
In the 2010s, institutional definitions became more holistic. The Mexican Institute for Competitiveness
(IMCO, 2015) defined competitiveness as the capacity to attract and retain investment and talent, while
the International Institute for Management Development (IMD, 2015) emphasized creating
environments conducive to business performance. The Law for the Development of Competitiveness
of Micro, Small and Medium Enterprises (2017) combined institutional and firm-level perspectives,
linking competitiveness to sustainable private sector growth, profitability, and favorable market
conditions. Meanwhile, digitalization emerged as a key determinant, as Brynjolfsson and McAfee (2017)
introduced the concept of digital competitiveness, focusing on the adoption of advanced technologies.
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Simultaneously, Stam and Elfring (2018) and Schwab (2018) integrated innovation, entrepreneurship,
and inclusiveness into competitiveness frameworks.
Contemporary Approaches: Digitalization, Sustainability, and Resilience (2019–2021)
Recent definitions underscore multidimensional and adaptive capabilities. Pine and Gilmore (2019)
introduced the experience economy, emphasizing memorable customer and employee experiences as
differentiators. Chesbrough (2020) highlighted open innovation and collaborative ecosystems as
enablers of competitiveness. Duchek (2020) proposed competitive resilience, referring to the ability to
anticipate and adapt to crises. Sustainability gained prominence with Porter and Kramer (2021), who
advocated for integrating environmental and social practices into corporate strategy, while Mayer-
Schönberger and Ramge (2021) introduced data-driven competitiveness, stressing advanced analytics
and AI for decision-making.
Three major theoretical schools are identified:
Microeconomic approaches, which emphasize the internal resources and capabilities of the firm.
Structural approaches, which underline the role of the institutional, economic, and technological
environment.
The systemic competitiveness approach, which integrates the meta, macro, meso, and micro levels
within an interdependent logic.
Since 2020, new concepts have emerged, such as sustainable, digital, inclusive, and data-driven
competitiveness, reflecting an update of the competitive paradigm in response to social, environmental,
and technological challenges.
The results show that the concept of competitiveness has evolved from being a notion centered on
economic efficiency to a much more complex and interdisciplinary approach. The rise of the systemic
perspective reveals that competitiveness cannot be explained solely by internal business decisions, but
is deeply influenced by the institutional framework, public policies, technological development, and
organizational culture.
Moreover, the most recent literature proposes a strategic redefinition: it is no longer just about
competing on price or productivity, but about incorporating values such as sustainability, resilience, and
equity. This shift presents new challenges for SMEs, which require differentiated public policies and
adaptive strategies to integrate into global markets.
CONCLUSION
Competitiveness is an evolutionary, dynamic, and multidimensional concept, whose interpretation has
significantly changed depending on the historical context and global challenges.
There is a substantial theoretical richness, but also conceptual dispersion, which is why this review
contributes to organizing and classifying the predominant approaches in literature.
The systemic competitiveness approach offers an integrative perspective that helps to understand the
links between structural and organizational factors and is particularly useful for analyzing SMEs in
complex environments.
Current trends point toward a more human-centered and sustainable view of competitiveness, which
calls for rethinking traditional business success indicators and adopting models that incorporate
innovation, social impact, and digitalization.
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This study makes a significant contribution to the theoretical and practical understanding of business
competitiveness by integrating and extending established frameworks. First, it reinforces the principles
of the Systemic Competitiveness Theory, which conceptualizes competitiveness as the outcome of
interactions between internal and external factors, positioning the firm as an integral component of a
broader socioeconomic system. Additionally, the findings are consistent with the Factor Endowment
Theory, emphasizing that the efficient combination and allocation of available resources are critical for
improving organizational performance and sustaining competitive advantage.
From a conceptual perspective, the study incorporates elements from prior models, notably Schwab’s
(2018) Global Competitiveness Index, which organizes competitiveness into 12 pillars grouped under
three sub-indices: Basic Requirements (BR), Efficiency Enhancers (EE), and Innovation and
Sophistication (IS). These dimensions are explicitly linked to the variables examined in this research,
providing a structured and comprehensive analytical approach. Furthermore, the Man Model (2002) is
integrated to capture competitiveness determinants specific to small and medium-sized enterprises
(SMEs). This model highlights three critical factors: firm-specific characteristics, external
environmental conditions, and the role of the entrepreneur—an aspect of particular relevance to micro
and small enterprises in the steel sector.
The practical implications of these findings are twofold. For industry stakeholders, particularly owners
and managers of micro and small steel enterprises, the results offer a conceptual and empirical basis
for designing strategies aimed at enhancing competitiveness through resource optimization,
innovation adoption, and systemic interaction with external actors. For policy makers and support
institutions, the study provides evidence-based insights to inform the development of targeted
programs and initiatives that strengthen competitiveness at both firm and sectoral levels. Additionally,
the conceptual synthesis presented here serves as a valuable reference for preparing analytical reports
and guiding strategic decision-making processes in the steel industry context.
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