Competitiveness Policy in the 1990s

In recent years there has been considerable debate about competitiveness and the nature and direction of industrial and trade policy in the United Kingdom (UK), the European Union (EU) and the United States (US). The term ‘competitiveness’ appears to have aroused considerable controversy. On the one hand, the word has become a kind of umbrella term for a wide‐ranging set of industrial and trade policies in the 1990s. On the other hand, the term evokes an analogy which suggests that nation states compete in the same way that firms compete: there may be winners and losers. In this context, competitiveness has been dismissed as a ‘dangerous obsession’ or ‘pretentious rhetoric’ (Krugman, 1994, 1996). While recognising the problematic nature of the analogy between firms and nation states and the associated suggestion of winners and losers, the purpose of this paper is to provide an assessment of UK competitiveness policy in the context of the theoretical and empirical debate surrounding industrial and trade policy.