Dynamic programming is essential as it provides a way to solve problems with overlapping subproblems, optimizing efficiency and solving complex challenges.

Dynamic programming (DP) is crucial in competitive programming because it offers an efficient approach for solving problems that involve overlapping subproblems and optimal substructure. By breaking a problem into smaller, manageable subproblems and storing their results, DP avoids redundant calculations, significantly reducing computation time. This method is especially useful in challenges related to sequences, combinatorial problems, and optimization tasks. Mastering DP helps you tackle complex problems like shortest paths, maximum sums, and knapsack-related issues. By learning DP, programmers can solve a wide range of problems efficiently and understand how to structure their code to optimize performance, making DP an essential skill in competitive programming.