The Plan of Spain: Increase Exports
The competitiveness of Spain had declined since 2007 because of the American housing bubble crisis and the economy of Spain has suffered greatly. But today, Spain has increased its competitiveness by increasing exports.
There are two factors that affect competition: the price of the product and the quality or uniqueness of the product. The product price depends on the cost of production. If materials or labor or decrease in efficiency, the company needs more money for producing products, and the company will increase prices to cover the increase of cost of production. The quality or uniqueness of the product depends on the time and labor the workers put into the product. The quality determines consumption and competition . That is to say, more quality and more uniqueness mean more competitiveness because more consumers will want that product if the product is healthy or unique. In past years, Spain did not produce much product demand because their products were not cheap nor good, that is, competitiveness had declined. But today, competition has increased. Why? Research has indicated that more than 50% of the growth in Europe is due to the increase of quality or uniqueness because the economy does not allow the decrease of prices. Therefore, demand has increased and as a result, exports have grown in Spain. |
Reference:
http://knowledge.wharton.upenn.edu/article/spains-plan-for-economic-recovery-jumpstart-its-exports/
http://knowledge.wharton.upenn.edu/article/spains-plan-for-economic-recovery-jumpstart-its-exports/