As developing countries have started to open up their economies, concern about competitiveness has spread to their policy makers. Their relative competitiveness as production and investment sites has become a prime focus of development policy. They are, moreover, faced with a world in which the main determinants of competitiveness are changing rapidly. Competition has intensified because of rapidly falling transport and communications costs, and the performance of economies, industries and firms is constantly compared and benchmarked across nations. So are determinants of competitiveness.These and related issues are analyzed in detail in this report. It describes the micro-foundations of competitiveness and enterprise, and translates the lessons to the national level. It looks at the indicators and determinants of competitive performance in East Asia and highlights lessons to be learned by other developing countries.