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The Global Competitiveness Report 2006-2007: Interviews
Three of the authors of
The Global Competitiveness Report 2006-2007 share their insight into the results, providing expert analysis of competitiveness and how it can enhance prosperity and growth.
India and China continue to hold world attention as their economies grow at rapid rates. India is 43rd in the rankings and China is the 54th most competitive economy. How do you reconcile the high growth of these two countries and their perception of being very competitive with their relatively low ranking in the competitiveness index?
Israel appears to be a big winner in this year’s Global Competitiveness Index rankings, improving its position from 23rd to 15th. What accounts for its strong performance?
In Europe we see Central and Eastern European countries improving their performance while Italy and other long-standing members have tended to do less well. What is dividing Europe?
African countries dominate the bottom of the rankings, despite current positive trends on the continent. What does The Global Competitiveness Report reveal about the underlying drivers of growth and what policy recommendations can be made for boosting Africa's competitiveness?
If we turn to look at other regions, which economies are the shining stars in Latin America and the Middle East?
How does the GCI account for different stages of development of countries - for example between China which is in the first stage of development, Russia which is in the second, and Singapore which is in the first? In early stages of development, economies compete in prices. In that stage, what matters is to get the "basics" right. By "basics" we mean the institutional environment that guarantees basic property rights, we mean physical infrastructures, we mean maintaining a minimum degree of macroeconomic stability and a good level of basic education and health. At intermediate levels of development, economies need to sophisticate more. Thus, at that level we think economies should make a larger effort in improving advanced levels of education and training, they also need to improve the efficiency of their labour, goods and financial markets and need to adopt the most up to date technologies (even if these technologies have been invented elsewhere). Finally, in the most advanced stage of development, firms need to innovate both in the sense of creating new products and in the sense of creating a more sophisticated business environment (with innovation in business practices). How does the new CGI reflect recent advances in economic growth theory? If growth theory teaches us anything, it teaches us that the process of growth is complex. The GCI is an attempt to capture this complexity by modelling growth as a complicated combination of factors that matter differently for different countries. Will the new GCI not distort comparisons of current competitiveness rankings with previous years? If you compare this year’s GCI with last year’s, it is 100% comparable. Of course what you cannot compare is this years Global CI with last year’s Growth CI. These two different statistical animals and cannot (and should not) be compared. The CGI aims to give a sense of the priorities for reform to improve competitiveness – how is this achieved with Latin America and Africa for example? Precisely because it captures a higher degree of complexity than previous indexes, the GCI’s various pillars can be used to identify bottlenecks within countries. In other words, if we compare the score of labour markets with the score of public institutions and we see that the score of institutions is lower, we can say that the business community of country X believes that institutional reform would have a bigger impact on competitiveness than labor market reform. Thus, a ranking of all the pillars within a country gives a picture of what the business community thinks are the country’s priorities. |
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