For all the bad behaviors that surround youth competition, both of us believe that there is high value in competing as youth (and just to get it out of the way, none of the value comes from winning, except that winning enables more competing) Competition exposes the kids to a realizing that there are standards of excellence beyond what they see every day, and to work towards a goal beyond matching those immediately around them.
The first value is the value of comparison. In a local group (like a school), it is easy compare yourself only to the people around you. It is also easy to believe that the people around you are your competition. But that is patently false. The people around you will become your friends and colleagues. And just as in the real world, the successes of those around you translate into your own circle improving as you spur each other on to excellence and share the attitudes and practices that bring you there. In youth competition where you see the same people again and again, your local competitors also become this community. The contrast that often happens with those who only see their local area is that success is resented (especially when that success occurs outside the local group), and attacked by those who would withhold resources, denigrate, and pull back those who do well in the larger world for a variety of reasons.
A second value of competition is to experience the ebb and flow of training/preparation cycles. The competition itself is a mere moment in time. The value of the competition is the preparation that leads to it. While in school, the performance is the goal in the forms of frequent tests, the time domain is too small to reflect real life. In competitions, the training cycle (in all fields that I know of) is measured in months. And there is a flow of months leading up to a competition, then a rest immediately following, because human beings cannot sustain a constant high level of pressure indefinitely. This sense that we live beyond the immediate moment is not found in normal school settings (which focuses on the next test) or in normal free play (which only exists in the moment).
A third is an appreciation for excellence and details. In every aspect of life, there are skills that can be mastered. And doing so is through practice, repetition, and focus on details that can be improved. And this is always grinding work. But they payoff comes later, as the preparation cycle continues and these details are put together into a larger whole, the mastery of the details leads to performance in the field that is a thing of beauty and wonder. And as you get better, you recognize that the struggles you went through, were shared by fellow competitors and the models of greatness in their own preparation cycles. And this becomes the inspiration for the next training cycle, recognizing that the improvements in the details at the beginning of the cycle leads to the performance at the end of the cycle.
All of this was magnified during COVID-19. With the lockdowns and cancellations of events due to both the pandemic and the constant political fighting between those who valued the health and safety of the kids and those who wanted to ignore the whole thing, many activities who attempted to ignore the pandemic were caught in the consequences, leading to turmoil. Similarly the schools, so school based activities were curtailed. Our school district had a cyber program, but it was taught in a way that isolated the students. So students only interacted on their own initiative (or there parents). And this magnified the tendency in our school district that growth was an individual activity (and it was everyone for themselves). So we actively tried to create this environment where my kids would be able to compete and be exposed to the larger world.
Over the last two years, we were able to do this in a broad range of forums. My son qualified for his Tae Kwon Do organization's district championship tournament (based on a NASCAR like point system from local tournament results). This surprise greatly improved his motivation to continue martial arts training. He also was a member of teams in regional math competitions, with his team placing in both pandemic years. While math is an individual activity, we were able to create online practice/prep sessions so that the team members could meet each other and get used to each other's personalities before the actual competition. Robotics was mostly in-person team, with an organization that took COVID-19 seriously so their competitions went as normal. While the science fair this year was in person, all of the hard work was done while he was in virtual school (unfortunately we were not able to form a community around this during the preparation period). My daughter has participated in harp recitals and judging along with submitting works of poetry to various forums. Both of them walk away from each round of competition and judging with excitement for that field.
What we saw was how motivating it was for our kids to be involved in something where they are evaluated against an outside standard. And it really needs to be an outside standard, the kids are understandably jaded by the feedback they get from the people in their everyday life because it feels mundane (and they also have figured out that the feedback is not objective because there are other motivations). These competitions are something to look forward to and the preparation/training cycle becomes a way of marking the seasons, which is how personal growth works in real life.
