Contribution of Financial Management to the Digital Competitiveness

Abstract

The merits of financial factors for the competitiveness of countries and firms have been well documented, thus explaining why the public and private sectors are so sensitive to any amendments in this field. Along with that, the digitalization of the global economy influences all industries, including finance, turning it into key basic grounds for further dissemination of Industry 4.0 technologies. The paper aims to consider how financial factors contribute to competitiveness, including digital competitiveness. As there exist at least two essential elements of successful competition policy (intent of policymakers and incentives of firms to implement changes), we treat the competitiveness of firms through the macroeconomic lens, focusing on the two major rankings of national competitiveness—the World Economic Forum (WEF) and the International Institute for Management Development (IMD). We start with investigating different approaches toward the concept of competitiveness on national and firm levels. Next, we examine the input side of competitiveness, which has evolved from a focus on costs and productivity to country capabilities under the pressure of the Fourth Industrial Revolution. The research findings include the definition of indicators in both rankings that are connected with the finance component and look at how they influence “outcome” competitiveness under digital perspectives.