Productivity and competitiveness are closely related concepts.....

 Productivity and competitiveness are closely related concepts, with productivity being a key driver of competitiveness. While lower production costs can lead to increased market share, competitiveness is more than just price. It also involves factors like innovation, quality, and access to resources. Domestic competitiveness is crucial, as it contributes to a nation's overall economic strength.

Productivity and Competitiveness:

Productivity is a measure of how efficiently a company or nation uses resources to produce goods and services. Competitiveness, on the other hand, is the ability to generate profits and gain market share, often by offering better value (which can include lower prices but also other factors).

Lower Prices and Market Share:

Reducing production costs and offering lower prices can indeed help companies gain market share and build market power. This is especially true in industries where price is a primary factor for consumers.

Beyond Price:

However, competitiveness is not solely about price. Factors like innovation, product quality, brand reputation, and access to skilled labor also play a significant role. A company with a strong brand or innovative product might be able to charge a premium price and still maintain a competitive edge.

Comparative Advantage:

While comparative advantage (specializing in what a country or company can produce most efficiently) is a factor in international trade, domestic competitiveness also matters. It ensures that a nation's industries can compete effectively both at home and abroad.

The Importance of Domestic Competitiveness:

A country with strong domestic competitiveness is likely to have a more robust and resilient economy, as its industries can adapt to changing market conditions and innovate to stay ahead. This also helps attract investment and create jobs.

Productivity and competitiveness are not different, they are the ability to produce at lower prices, because this how companies achieve market share and build market power. It is not just a matter of comparative advantage, for domestic competitiveness is also important. The rule is to supply at lower cost and prices in order to gain competitive or comparative advantage."