**5. Discussion**

This research confirms the existence of different patterns of association in the Central American region in terms of the drivers that characterize competitiveness so that the existence of competitive differences can be affirmed. This can be associated with a difference in the level of economic development, which seems to be corroborated by the United Nations/ECLAC [41], when it mentions that Latin America and the Caribbean are not the poorest regions in the world but the most unequal. This organization also comments on the difficulties of this region to develop as such, which is caused by gaps in different areas such as low productivity, poor infrastructure, segregation, and problems in the quality of services such as health and education, in addition to persistent gender gaps and territorial inequalities, adding to environmental problems and the significant risks of climate change. The region has experienced a complicated situation recently, with economic recessions in Argentina and Brazil. Venezuela has been experiencing critical social and economic conditions for several years, which can easily be replicated in other countries in the region [25]. The Central American area is an example of a region that presents problems of inequality, with competitiveness being a fundamental factor that has been measured in the region for years.

The result of this research confirms the existence of a significant gap in competitiveness between two groups of Central American countries. Thus, Panama presents a better competitive performance at the country level than Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua in the 12 composite indicators analyzed from the Global Competitiveness Index published in 2018 and 2019. The result coincides with the region's GDP growth rate, where Panama maintained an average growth rate of over 5% between 2015 and 2017, decreasing in 2018, compared to El Salvador, which held growth rates below 3% over the same period [42]. As well as a GDP per capita higher than the rest of the countries in the region, where Panama reaches values of US \$15,545 million, followed only by Costa Rica with US \$12,485.4 million for the year 2018, against Guatemala, El Salvador, Honduras, and Nicaragua whose value of GDP per capita does not exceed US \$5000 million in the same year [43]. At the same time, Panama presents the lowest inflation rate value for 2018, slightly reaching the value of 0.8%, contrasting with countries such as Guatemala, Honduras, and Nicaragua, whose inflation is around or above 4% [44].

Another relevant factor is exports, where Panama has the highest merchandise exportation levels, reaching US \$11.48 million in 2018, followed by Costa Rica with US \$11.34 million for the same year [45]. This behavior is repeated with imports, where Panama reached values of 23.01 million dollars for 2018, followed by Guatemala with 19.7 million dollars for the same year [46]. Another influential factor is maritime container traffic, where Panama shows itself to be enormously superior in the region, presenting values of 7,014,700 TEUs (20-foot equivalent units) in 2018, followed by Guatemala with 1,530,596 TEUs [47].

The importance of these competitiveness indicators is corroborated by works such as those of Von Krogh, Nonaka, and Rechsteiner [48], which state that companies must generate and acquire new knowledge in a continuous and sustained manner, in addition to improving their technological readiness to achieve and maintain satisfactory competitiveness values and sustainable growth levels. Precisely this relationship points to an important challenge for Central American countries.

Thus, one aspect that has the potential to influence both competitiveness and development is infrastructure. The IDB [49] states that "infrastructure is essential for economic growth and productivity. Especially in developing countries, infrastructure contributes to (i) expanding markets, (ii) raising private investment, and (iii) lowering production costs". Therefore, investment in infrastructure is a facilitating element for the growth of countries that has positive effects and increases private investment, promotes the expansion and sophistication of markets, and favors the efficiency of the productive sector, so that the growth in quantity and quality of infrastructure in Central American countries has an impact on higher levels of development and competitiveness of their economies.

On the other hand, UNESCO [50] explains the link between education, competitiveness, and development by pointing out that "the educational progress of countries is but one component of the process of improving the living conditions of societies, that is, of their development, and has a reciprocal relationship of influence with the latter: while more and better education is expected to contribute to general progress, the very absence of progress is, in turn, an obstacle to the expansion of educational opportunities". The close relationship between development and education is an important challenge for the Central American region.

The achievements and efforts in education in the region occur too late, responding when opportunities have passed or have been replaced by other realities with greater demands. This has generated a secular delay that places the region at a disadvantage against other countries worldwide.

This is shown graphically in Figure 6, which shows per capita public social spending on education, where Costa Rica stands out in the region [51].

**Figure 6.** Public social spending on education in Central American countries.

Furthermore, the importance of science, technology, and innovation in the sustainable growth of the Central American region has been emphasized. Precisely, Casalet [52], mentions that the greatest challenge for the region consists of "increasing the macro and micro-complexities of their respective productive and innovation systems to continuously boost the development of capabilities that promote changes in productive and institutional processes aimed at greater complementarity". To this, it is essential to add that the constant and rapid technological changes, such as cloud computing, the internet of things, and the generation of computer applications, considerably affect economic science since it is one of the social sciences most sensitive to changes in the environment. Therefore, policymakers should consider technological evolution as a relevant factor when creating policies that affect the development of nations [4].

Innovation is a relevant and necessary factor in facing the challenges generated by the COVID-19 pandemic, where new solutions must be implemented to respond to the current problems. Thus, governments must be faster and more transparent while at the same time cooperating with other social actors to develop new technologies and tools that generate and increase collective benefits [53].

This can be seen graphically in Figure 7, which shows the public spending, as a percentage of GDP, on research and development in the countries of the Central American region, in which a notable difference between Costa Rica and the other countries of the region between 2007 and 2017 can be seen.

**Figure 7.** Research and development spending (measured as a percentage of GDP) year 2007 to 2017.

In a complementary manner, UNDP [54] points out that the successful managemen<sup>t</sup> of the development processes of some nations is closely linked to aspects related to the institutional and governance framework. Evans [55] clarifies that the understanding of development requires an institutional approach and points out that the differences in the levels of investment and technological progress of countries are key differentiating factors and cannot be understood without the institutional context. Furthermore, although the context is open and globalized, development processes are constrained by specific local conditions, with the institutional aspect being a fundamental part of the social fabric determining development [56].

In addition, and according to Martínez [14], regional integration will allow achieving more significant benefits in terms of competitiveness than those obtained by each country separately. Therefore, the importance of the participation of the Central American Integration System (SICA) in the development of the region is fundamental, since, according to Martínez [14], it faces the challenge of creating instruments for collaboration in the region, in addition to the creation of regional agreements that guarantee thresholds of wellbeing and development, this promoting the participation of all actors, as well as equality, security, and social support networks. The integration of markets can achieve a higher degree of productive specialization, generating competitive advantages in international markets [57]. In the particular case of Central America, regional integration presents an additional advantage that could contribute to solving some challenges, facilitating the decoupling of economic growth and the increase of negative externalities and consolidating a structural change with high rates of equality, as proposed by the Goals of the 2030 Agenda for Sustainable Development [58].

In the Central American region, significant progress has been made concerning the integration plan [57]. However, the region faces enormous challenges due to high poverty levels originating from income inequality and lack of social inclusion. Therefore, it is necessary to stimulate growth and competitiveness in the region's countries in an economic

and social context threatened by frequent episodes of social violence, the action and effects of organized crime, and increasing vulnerability to threats arising from climate change [55].

## **6. Conclusions**

This research demonstrates the existence of significant differences in the competitiveness of Central American countries, five different groups of countries have been identified, and each grouping presents particular characteristics. The Central American region is characterized by having a low competitive level, except for Panama, which is incorporated into a different group where it shows a better competitive outlook.

At the same time, this research identifies the variables with the most significant differentiating potential in the Central American region, where, as previously mentioned, Panama shows a better competitive outlook. The pillars with the most remarkable significant differences, and therefore the pillars where it is necessary to prioritize state intervention through public policies, are macroeconomic stability, infrastructure, health, adoption of information technologies, and the financial system. Therefore, these can be considered key factors that determine Panama's better performance in terms of competitiveness with other countries in the region.

Without wishing to enter into controversy about the leading roles that governments should assume in favoring and defining the political, social, and economic conditions that favor competitiveness and development, it seems reasonable to specify the status of governments as depositaries of this responsibility in the exercise of the same, given the influence they have in determining and ensuring the conditions necessary for the country's companies and economies to be competitive [16], being able to affect productive conditions directly or indirectly through the formulation of economic and industrial policies [59]. However, it is crucial to consider that the design and implementation of competitiveness policies are highly complex, being a constantly evolving and innovative process in itself. This complexity offers learning opportunities throughout the process, so the participation of various agents in the territory is necessary [60].

The factors of competitiveness that favor and facilitate the economic and social development of countries can be used as evaluation instruments to guide the definition of political measures and laws that serve governments to stabilize markets and promote the growth and development of countries. In other words, this research presents findings that revolve around the fact that the reduction of the gaps between the elements that differentiate Central American countries in terms of competitiveness is transcendental for the region's development. For this reason, they should not be seen as separate elements of political or governmental action but as related elements that, if properly implemented, can facilitate and promote the improvement of a country's productivity, competitiveness, and prosperity on a sustainable basis.

The limitation of this study lies in the performance of a single comparative analysis through the cluster methodology, which is an exploratory technique, finding the need to extend the research beyond the analysis of the Global Competitiveness Index. At the same time, it is necessary to perform a comparative analysis with more years of study. Still, it is required to clarify that having a new methodology since the 2018 publication and due to the influence of the pandemic generated by COVID-19, it is necessary to wait for recent publications of the World Economic Forum. Finally, it is required, in the first place, to perform an in-depth statistical analysis to visualize the influence of time on the behavior of the competitiveness of the countries in the region, taking this role as the study's hypothesis. In addition, it is necessary to perform a separate analysis of the competitive behavior of the countries under study where the influence of the pandemic is a variable.

**Author Contributions:** Conceptualization, C.M.-G. and E.J.M.-F.; methodology, C.M.-G. and E.J.M.-F.; software, C.M.-G.; validation, C.M.-G. and E.J.M.-F.; formal analysis, C.M.-G. and E.J.M.-F.; investigation, C.M.-G. and E.J.M.-F.; resources, C.M.-G. and E.J.M.-F.; data curation, C.M.-G. and E.J.M.-F.; writing—original draft preparation, C.M.-G. and E.J.M.-F.; writing—review and editing, C.M.-G. and E.J.M.-F.; visualization, C.M.-G.; supervision, E.J.M.-F.; project administration, C.M.-G. and

E.J.M.-F.; funding acquisition, C.M.-G. All authors have read and agreed to the published version of the manuscript.

**Funding:** This research received no external funding.

**Institutional Review Board Statement:** All personal data obtained in this study are confidential and will be treated in accordance with the Organic Law on Data Protection and Guarantee of Digital Rights (LOPDGDD) 3/2018.

**Informed Consent Statement:** Informed consent was obtained from all subjects involved in the study.

**Data Availability Statement:** The data used in this article are from the World Economic Forum and were obtained from https://es.weforum.org/reports/the-global-competitveness-report-2018 and https://www3.weforum.org/docs/WEF\_TheGlobalCompetitivenessReport2019.pdf (accessed on 7 November 2021).

**Conflicts of Interest:** The authors declare no conflict of interest.
