All about competition in the economy

Competition in the economy is a process in which, as a result of interaction and struggle between enterprises, the best conditions for the sale of products of each particular company are achieved. Economic competition is the impetus for the development of a single enterprise and the entire economy.

Economic role

Over the past two decades, competition has grown rapidly and continues to grow worldwide. But even at the beginning of the century, the rivalry between organizations was not so fierce. This was because governments and large cartels held back competition. Today, there are practically no industries that are not subject to its influence. Competition can produce diametrically opposite results. For the winners - the increase of their own wealth, fame and secured, sometimes several generations in advance, life. For losers - ruin, poverty, inflation, instability, unemployment, and so on.

Adam Smith described competitive behavior as fair competition, the main instrument of which was price pressure. In the 21st century, this definition has changed. Often there is no opportunity to influence the price. Modern competition means the struggle of the old with the new. This is an appeal to new technologies, new types of organization, new products and ideas. Thanks to the new interpretation, competition has a significant impact on the economy as a whole.