Assessment of Territorial Competitiveness in the Provinces of Iran Using the Integrated Model of Factor Analysis and Analytic Network Process (FANP)

Nowadays, along with globalization which has resulted in the free movement of capital and the releasing of human forces from locative constraints, territories (countries, regions and cities) play a more vital role in attracting capital and mobile human forces, as well as increasing competitiveness. As a concept which was until recently solely used for business corporations, competitiveness has entered the literature on places due to the heightened role of territories in attracting capital and mobile human forces. Therefore, the policy approaches of countries and regions have changed from relative advantages to competitive advantages.
When discussed in the context of territories and locations, competitiveness became more complex and its conceptualization and application were the focus of many pundits. Territorial competitiveness is a multi-dimensional concept which is generally defined as efforts to enhance location advantages through enhancing the value of the location for different activities. This concept has been approached from two different viewpoints. The first approach considers the internal factors of business corporations (relative advantage element), while the second approach captures soft dimensions such as human, social, knowledge and environmental resources in addition to economic and efficiency dimensions. The main techniques for evaluating territorial competitiveness are benchmarking and use of spatial instruments.
The current study has adopted the second approach and the benchmarking technique. However, negligence of the non-economic dimensions of territorial competitiveness and the identical application of the factors affecting this type of competitiveness does not seem to suit the Iranian context. Accordingly, the aim of this study is to identify and evaluate the components of territorial competitiveness in the provinces of Iran. Hence, the study consists of two major steps. In the first step, the components of territorial competitiveness in Iran are extracted and identified. As for the next step, the competitive rank of each province is determined. Therefore, the study is driven by the following research questions: What are the main factors affecting territorial competitiveness in Iran?
What is the rank of each province in Iran in terms of territorial competitiveness?
In order to address the research questions, a number of indices were investigated to operationalize the analysis of territorial competitiveness. This was done by reviewing the dominant viewpoints and considering the major indices in theoretical and experimental research studies through the documentary method and reliance upon secondary data. In order to collect the necessary information about the investigated indices, except for some indices which had to be extracted from reports and maps, the researchers used statistical yearbooks and selected indices of each province which were available on the website of the Statistical Centre of Iran. Then, the data were entered into SPSS Software in order for factor analysis to be run. By using factor analysis, some of the major shortcomings of evaluating competitiveness through the benchmarking technique (e.g. overlap and possible correlation among the measures, identical effect coefficients for each of the factors) could be overcome. Since the benchmarking of regions and cities in terms of their competitive status may guide policy-making and decision-making procedures, the current study aimed to determine the competitive rank of each province after identifying the factors affecting territorial competitiveness. To this end, the results of factor analysis were used to design a network of goals (territorial competitiveness), criteria (factors extracted through factor analysis) and sub-criteria (indices related to each factor) which were analyzed using Super Decisions Software. Simultaneous use of factor analysis and analytic network process (ANP) makes it possible to overcome the subjectivity of expert judgments in analytic network process and diminish the possibility for any incompatibility in the judgments.
As a result of this procedure, 7 factors were extracted from factor analysis with the cumulative variance of 79.9%. The extracted factors included (1) knowledge, technology, cultural and human resources; (2) national and international relations; (3) economic performance; (4) potential for economic partnership; (5) physical and infrastructural resources; (6) per capita of higher education and healthcare; (7) environmental conditions. The results of ranking the provinces using ANP indicated that Tehran is the most competitive province of Iran, followed by Yazd and Bushehr provinces at the 2nd and 3rd ranks. The significant difference between the competitive score of Tehran and the subsequent province (Yazd) is a clear sign of the accumulation and concentration of resources and competitive grants as well as the highlighted national and international role of this province. On the other hand, Lorestan, North Khorasan and Sistan and Baluchestan Provinces stood at the lowest ranks (29th, 30th, and 31st) among the provinces of Iran in terms of competitiveness levels. The undesirable conditions in these provinces may have been caused by the lack of sufficient infrastructures in addition to economic, social and knowledge deprivation. Also, investigation of the radar charts indicated that although Tehran is the most competitive province in Iran, its environmental conditions are below the national average. On the contrary, Sistan and Baluchestan enjoys a higher-than-average status in terms of environmental conditions. Therefore, provinces have to be considered in terms of each of the factors, since improvement in some dimensions must not lead to negligence of the others. By adopting suitable strategies, lower-score dimensions have to be strengthened in order to reach a higher level of competitiveness.
Even though the spatial distribution of competitiveness in Iran does not follow a specific pattern, it is clear that the obvious difference between Tehran and other provinces has placed it at a unique level (completely competitive). At the same time, the competitiveness levels of many provinces in Iran are lower than the national average. These provinces must be prioritized in any future planning, since the continuation of such flow may significantly reduce competitive values.