<p>The aim of this paper is to theoretically establish a framework for the basics of international trade between countries creating competitiveness. Since the environment in which trade takes place is changeable so is the concept of competitiveness. It is therefore argued in the paper that in order to understand the underlying factors of competitiveness one have to understand the environment in which trade takes place in. Today the concept of competitiveness will therefore be better understood by employing an industrial perspective. This approach can answer questions, which national aggregate estimates cannot. The question asked in the paper is; which industries in Europe, based on the assumptions of international trade theories is competitive? The European industries that came out as competitive were the one using high-skilled labor and produced or used ICT intensively in their production. The question also provided some answers to the always up-do-day wonder namely, in which direction European competitiveness is heading.</p>

The aim of this paper is to theoretically establish a framework for the basics of international trade between countries creating competitiveness. Since the environment in which trade takes place is changeable so is the concept of competitiveness. It is therefore argued in the paper that in order to understand the underlying factors of competitiveness one have to understand the environment in which trade takes place in. Today the concept of competitiveness will therefore be better understood by employing an industrial perspective. This approach can answer questions, which national aggregate estimates cannot. The question asked in the paper is; which industries in Europe, based on the assumptions of international trade theories is competitive? The European industries that came out as competitive were the one using high-skilled labor and produced or used ICT intensively in their production. The question also provided some answers to the always up-do-day wonder namely, in which direction European competitiveness is heading.