Sectoral Leadership in International Competitiveness

The purpose of this paper is to identify the type of labour and the sectors where labour productivity should be improved to raise the international competitiveness of Portugal. A static multi-sectoral general equilibrium model, with multi-national and single-country versions is used. The model allows the identification of the sectors that are leaders in competitiveness improvement. It is expectable that for some countries this role should be played by the traditional exporting-sectors, while for other countries the effort should be concentrated on the suppliers of intermediate goods. The results show that the choice of sector, and type of labour, are crucial for the improvement of the international competitiveness of the Portuguese economy. In addition, the criterion used to measure competitiveness also has an important role. While the multifactor productivity is especially increased when the promotion of labour competencies occurs in exporting-sectors and importing-sectors, the population welfare have a greater impact with the generalised improvement of unskilled labour competencies.