Competitiveness can be defined at the firm level, the industry level, and the national level. At the firm level, competitiveness is the ability to provide products and services more effectively and efficiently than relevant competitors. This includes sustained success in international markets without protection or subsidies. Measures of competitiveness at the firm level include firm profitability and measures of cost and quality, the exports or foreign sales divided by output, and regional or global market share. Performance in the international marketplace provides a direct measure of the firm's competitiveness.

At the industry level, competitiveness is the ability of the nation’s firms to achieve sustained success versus foreign competitors, without protection or subsidies. Measures of competitiveness at the industry level include the overall profitability of the nation’s firms in the industrial sector, the industry's trade balance, the balance of outbound and inbound foreign direct investment, and direct measures of cost and quality at industry level.
 

At the national level, competitiveness means the citizens’ ability to achieve a high, and constantly rising, standard of living. In most countries, the standard of living is determined by productivity, which deploys national resources and the output of the economy per unit of labor and/or capital employed. A high and rising standard of living for all nationals can be sustained only by the continuous improvement of productivity, either through achieving higher productivity in existing businesses or through successful entry into higher productivity businesses.