In an economic scenario marked by the need for reactivation and the search for investor confidence, promoting the competence emerges as a fundamental pillar for developing countries. Latin America and the Caribbeanthe report highlighted "Competition: the missing ingredient for growth?"of the World Bank.
The document highlights that the business landscape is characterized by a remarkable concentration, where a few large companies dominate the markets, while numerous small companies struggle to stay afloat.
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Alarmingly, 70% of workers are in companies with fewer than 10 employees, mostly engaged in low-productivity activities.
Strengthening laws and regulatory agencies
Despite the fact that many countries have agencies and competition lawsIn addition, their enforcement is weakened by a lack of resources and personnel. The influence of powerful firms on government policies reduces the effectiveness of these laws, thus perpetuating a cycle in which large firms have little incentive to innovate, while less productive firms persist in an uncompetitive environment.
"Across the region, the absence of competition causes consumers to pay higher prices for lower quality goods and services, reducing overall welfare and contributing to higher inequality, as monopoly prices on essential goods and services account for a larger share of the budgets of poorer households," the report states.
For this reason, he emphasizes the need to revitalize the economic growth by correcting the competency frameworks and proposes concrete actions that include the strengthening of the competition agenciesensuring its independence and enforcement capacity. antitrust regulations.
Promoting innovation policies
It also highlights the importance of innovation policies to encourage companies to compete nationally and internationally, as well as the development of management capabilities to respond effectively to markets and stimulate workers.
"Productivity at the company level is low, partly because this protection has generated few incentives to innovate and improve business capabilities. Therefore, a higher level of competition is a welcome boost to drive companies to innovate and compete," he says.
Education is key
In this context, improving the education at all levels is seen as a crucial measure to prepare the workforce and the workforce to be prepared for future entrepreneurs to thrive in competitive environments.
The report's call is clear: the effective competition is an indispensable catalyst for the economic growth and the regional prosperity.
Emphasizes that with concrete measures and appropriate policies, countries can move towards a more efficient and effective increased competitiveness that drives the sustainable development and investor confidence in the region.
Source: World Bank
