Regional competitiveness is defined as:
” the role of government or state in supporting firms and industries within its territory to gain success in global market competition through specific development policies or strategies, which lead to greater capacity to sustain growth and improve standards of living.” (OECD 1997)

The key debate in competition between regions is not only related to factor costs and resource endowments, but also the aspect of  institution. Two identical regions, which have implemented relatively the same competitiveness strategies could get a contrary outcomes due to institutional factors. Neoclassical particularly has been overlooked institutions despite its critical role in the process of the development.

Looking at the current economic crisis that we have today, state institution plays a more critical role to continuously improving the structure and increasing the capacity of regions to compete.  With the incoming stimulus package, the question is how efficient and transparent state in utilizing the funds to support productive activities that lead to job creation.