The purpose of this paper is to illustrate why culture is important in explaining both the rise and fall of a country’s competitiveness. I want to show why Korea’s competitiveness has been on the rise, whereas Italy’s has been declining over the years using culture as an important explanatory variable. This paper utilizes primary and secondary data on national GDP and competitiveness in order to analyze macro and micro factors of rising or declining competitiveness. Simultaneously, this paper uses qualitative cultural analysis to fill the gap the economic data has created. Significant cultural differences between modern and postmodern Catholicism (Italy) and Confucianism (Korea) explain why Korea was more competitive than Italy in the manufacturing and cultural sectors in the 21st century. Few extant studies exist that compare Italy and Korea, as they didn’t seem to be similar or comparable. However, it is simply appalling to see Korea’s excellent track record of competitiveness that has actually outstripped Italy, which is a G7 member.
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