The concept of strategic change in financial systems consists of various internal and external environmental elements. Effective company strategies determine the fate of companies in volatile market conditions. Companies in financial systems have to adopt new technologies and implement new strategies in order to achieve a competitive position in the marketplace. Developing competitive ideas and strategies relies on organizational change. It is shaped by internal and external factors that mostly provide the formation of strategic change. In this regard, market developments and the changing structure of demand are of vital importance. In this chapter, a strategic approach to competitiveness in financial system is developed. Moreover, the fundamentals of competitiveness on financial and economic systems are evaluated, and the interaction between financial development and global competitiveness is assessed.
TopFundamentals Of The Competitiveness On The Economy
Various studies come to the fore in the meaning of determine to world trade and the competitiveness. According to a study by the World Economic Forum; there are three basic criteria that determine the global competitiveness and examination of global competitiveness is possible with the total of 12 factors that associated with them. The main factors that determine the competitiveness are expressed in Figure 1.
Figure 1. Foundations of competitiveness
As can be seen in the figure, there are 12 elements of competitiveness that integrated with 3 main factors. First of all, if we look from the viewpoint of the institutions involved in the basic requirements, institutional environment is determined by the legal and administrative framework, which in the interaction of the government, companies and individuals to generate wealth and income on the economy. Therefore, the quality of the existing institutions is one of the most important indicators in the direction of competitiveness and growth.
An efficient infrastructure is one of the essential elements for competitiveness. A well-developed infrastructure can reduce the negative effects of distances between regions as a result of correctly integration of the national markets and get into market that located in the region and the other countries, with low cost.
Even if macroeconomic stability is not enough alone to increase the productivity of nations, deterioration in the macroeconomic structure can seriously damage the economy. If there is a high rate of interest payments for the past period, the effective fulfillment of government services may not be possible. As a result, companies can’t carry out to their activities efficiently in periods that are not under the control of inflation.
Healthy workforce is an indicator of competitiveness and productivity. In addition, the lacks of basic education is one of the biggest obstacles for business development and provide the value-added products and services. However, a high-quality education and training is a necessary prerequisite for value-added production processes and products.
Countries, where have an efficiency on the product market, make trade of goods effectively in both domestic and foreign and also they provide a great advantage to create the correct product and service mix in demand and supply conditions. In addition, the flexibility and efficiency of the labor market represents to shown in the best efforts in the jobs and the most efficient use in the economy.