Unidad Teaching

Fourth 1 / Escenario
Unit/2 Eighth Learning environment
Lectura Fundamental
Essential reading

Competitiveness
Etapas de un planindeColombia: 
comunicación
estratégica
government strategies 

Content

1 Competitiveness in Colombia

2 Economic indicators of competitiveness

3 Colombian strategies to become competitive

4 ONPES law for competitiveness

5 Innovation and development

6 Conclusions

Keywords: competitiveness, global strategies, innovation, development, productivity.

1. Competitiveness in Colombia
In the last Global Competitiveness Report, Colombia was ranked 66 over 138 economies. The
country is now considered Latin America´s fifth most competitive economy falling behind Chile,
Costa Rica, Panamá and Mexico. (Alsema, 2017). In the report, Colombia fails in aspects like
institutions, in which corruption is the main problem for competitiveness.

The Private Competitive Council in Colombia presented the National Competitiveness Index, which
measures the Colombian departments that excel in their performance, in the face of international
competitiveness.

1. Basic conditions

2. Efficiency

3. Innovation

Figure 1. National competitiveness index Variables

Source: designed by the author

The last report of the National Competitiveness Index gave the capital, Bogota, the first place,
standing out in infrastructure, size of the market, basic education, health and business dynamics.

1. Bogota
2. Antioquia

3. Caldas

4. Santander

Figure 2. Most competitive departments in Colombia

Source: Anselma (2017)

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 2. Economic Indicators of Competitiveness
Competitiveness is the ability of a company to sell products and services that meet the customers’
demands over time.

According to the Durand & Giorno (2015), capacity for technological innovation, degree of product
specialization, the quality of the products involved, and the value of after-sales service are all factors
that may influence a country's trade performance favorably. Colombia needs to work hard in these
aspects. The OECD has explained that Colombia is working hard in improving business environment,
quality of education, as well as reducing labor market informality (OECD, 2018).

These are some economic indicators that can be used to measure competitiveness in a country.

Neoclasical Strategic management

measurement measurement

Exchnge rate Film’s structure

2. Antioquia
Comparative Productivity
advantage

4. Santander
Exports Strategy

Imports Efficiency

Figure 3. Competitiveness measurement

Source: designed by the author

Competitiveness has always been measured in terms of price or low costs. Nevertheless,
competitiveness nowadays should be measured in aspects like product differentiation, product and
service quality and variety, innovation, design and company’s reputation.

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 Diferentiation Innovation Business ethics Service

Figure 4. New measurements of competitiveness

Source: designed by the author

3. Colombian strategies to become competitive

To increase competitiveness, the colombian government established several strategies that included
the creation of the National System of Competitiveness (SNC) in 2006, to coordinate the activities
of the private sector with the Government, the academia and civil society, focused on productivity
and economic development (Bueno, 2016).

To improve ...
Being the most competitive economy in Latin America is the great bet
that the country must take.

Another important strategy was created by a group of entrepreneurs and universities called Private
Competitiveness Council with the main objective to represent the private sector’s initiatives and
needs within the government.

Finally, each region created the Regional Commissions for Competitiveness with the purpose of
ensuring the implementation of productive development and competitiveness policies.

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These commissions are responsible for pressuring the Government to comply with the proposed
competitiveness strategies for the regions.

Colombia’s competitive
National system of
competitiveness
framework Private competitiveness
council
Regional commissions
for competitiveness

Figure 5. Colombia’s competitive framework
Source: designed by the author

Although these strategies can help Colombia improve its competitiveness level, it is important
to always take into account the factors that enables competitiveness in the country. Remember
competitiveness is directly related to a country’s level of productivity.

Domestic investment
Productivity

Domestic innovation

Exports
Competitiveness

Inbound foreing
direct investment
Outbound foreing
direct investment

Figure 6. Enablers of colombian competitiveness

Source: designed by the author

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To support the competitiveness strategy and to guarantee that companies are applying the correct
one, the Government created Procolombia, the entity responsible for promoting Colombian exports,
foreign direct investment, and tourism. This way, the country is going towards the goal of becoming
more competitive. In addition, the national planning direction designed a long-term strategy to
improve Colombia’s competitiveness. This strategy is divided in 5 central aspects to improve:

1. Infraestructure 2. Logistics
3. Land planning 3. Land planning

4. Efficiency of 5. Regulatory
public spending improvement

Figure 7. Colombia’s aspects to improve

Source: designed by the author

The minister of commerce is driving a campaign to promote the productivity of small businesses in
the regions, especially in those that previously had no Government support, like Guajira, Magdalena,
Arauca, Casanare, Santander, Atlántico, and Bolívar. The Government realized these regions had a lot
of potential and that they needed more support and an accompanying plan.

One example of this strategy is Santander. This region has one of the prioritized chains in the country:
fashion, specially children’s clothing. In this sense, the Government’s objective is to improve the
quality and designs of the garments through the training of specialized human capital.

Another important example of this strategy is the Agrifood chain in Antioquia, where fruits are the
products with the greatest export potential in the region. In this sense, the Government is helping the
small farmers in their international certifications to increase the exports to European countries and
the United States.

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Figure 8. Examples of colombian productive chains
Source: designed by the author

4. CONPES law for competitiveness

CONPES strategy was created in 2015 as the National Council of Economic and Social Policy, and
frames the national policy of productive development. This policy was created under the Juan Manuel
Santos administration as a set of tools tending to improve market failures that hinder productivity.
This policy has nine important axes:

Innovation and
entrepreneurship

Knowledge and
Foreing trade
technology transfer

Quality Human capital

Productive chains Financing

Figure 9. CONPES strategy axes

Source: designed by the author

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Each one of these strategies is important to improve Colombia’s competitiveness, specially innovation
and entrepreneurship, in addition to the knowledge and technology transfer of the big companies that
will invest in Colombian companies. Moreover, the Government has a be invested on innovation, by
supporting universities in research and investigation.

5. Innovation and development

Innovation is highly related with productive transformation and, therefore, with development.
However, for a country to create innovative products and services is necessary to have high educated
human capital, able to absorb knowledge and apply it. But, what is innovation? Why is it so important
for country’s development? Innovation can be identified by four aspects:

Introduction of
new processes,
products and
services

Changes in Technological
management and improvement and
marketing Innovations modernization

Changes in
business modles

Figure 10. Characteristics of innovation

Source: designed by the author

The link between innovation and development is evident given that the creation of new technology
is the basis for a sustainable economic growth that ends up in greater social inclusion and more the
income distribution equality.

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Also, with the creation of new products, services, and processes, the structure of a country’s
economy, as well as the society, changes quantitatively and qualitatively.

6. Conclusions
Colombia is a country that is trying to improve its competitiveness through the implementation
of new government strategies and supporting small businesses in specialized regions. It has been
conscious that innovation has a direct relationship with a country’s productivity and development, so
Colombia has created a National Council of Economic and Social Policy through which the country
intends to improve productivity and competitiveness.

Colombia has still a lot to work in terms of innovation, logistics, infrastructure, and human capital
training, but the government is aware of the need of supporting the small regions with high
exporting potential.

For that reason, a competitiveness strategy was created, that includes entities like the Private
Competitiveness Council as well as the Regional Competitiveness Commissions to guarantee the
fulfillment of the government’s promises.

The CONPES program is focused on seven important axes that include productive chains, human
capital training, promoting entrepreneurship and innovation, knowledge and technology transfer,
quality of products and services, and foreign trade.

Knowledge Innovation Business ethics Why I do want to

start a business?

Figure 11. CONPES strategy axes

Source: designed by the author

With all these strategies the Colombian Government is committed to increase productivity and
competitiveness of companies in order to improve international competitiveness indicators.

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References
Alsema, A. (September 2 2017). Colombia Drops in Global Competitiveness Ranking. Colombia Reports.
Retrieved from https://colombiareports.com/colombia-drops-global-competitiveness-ranking/

Bueno, J. (2016, 06 17). How can Colombia become more competitive?. World Economic Forum.
Retrieved from https://www.weforum.org/agenda/2016/06/how-colombia-has-become-more-
competitive/

Durand, M., & Giorno, C. (2015). Indicators of international competitiveness : conceptual aspects and
evaluation. OECD. Retrieved from https://www.oecd.org/eco/outlook/33841783.pdf

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 TECHNICAL INFORMATION

Module: Globalization and Competitiveness

Fourth Teaching Unit: Competitiveness of
international companies
Eighth Learning environement: Colombia and
its competitiveness

Author: Sandra Milena Chicas Sierra

Academic advisor: Claudia Rocío Puentes Mendoza

Graphic designer: Brandon Steven Ramírez Carrero
Assistant: Eveling Patricia Peñaranda Izquierdo

This material belongs to the Politécnico Grancolombiano.

Total or partial reproduction is prohibited.

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