Global Competitiveness Index 4.0: WEF

The World Economic Forum (WEF) has released the 2019 edition of the Global Competitiveness Report which features the Global Competitiveness Index 4.0 (GCI 4.0).

• The World Economic Forum introduced the new Global Competitiveness Index 4.0 in 2018. GCI 4.0 provides a detailed map of the factors and attributes that drive productivity, growth and human development in the era of the Fourth Industrial Revolution.
  
  • The GCI 4.0 covers 141 economies, which account for 99% of the world’s GDP.
• The GCI 4.0 of 2019 reveal that, on average, most economies continue to be far from the competitiveness “frontier”—the aggregate ideal across all factors of competitiveness.
  
  • A country’s performance on the overall GCI is reported as a ‘progress score’ on a 0-to-100 scale, where 100 represents the ‘frontier’, an ideal state where an issue ceases to be a constraint to productivity growth.
• This edition of the report focuses on building shared prosperity (addressing inequality) and managing the transition to a sustainable economy (addressing environmental issues) along with competitiveness and growth.
• The report is based on 12 set of factors (pillars) that determine productivity. These are: Institutions; Infrastructure; ICT adoption; Macroeconomic stability; Health; Skills; Product market; Labour market; Financial system; Market size; Business dynamism; and Innovation capability.
• The index has been an annual edition since 1979.

Key Findings

• India has moved down 10 places to the rank of 68^th compared to the 58^th rank of 2018 primarily because of faster improvements of several countries previously ranked lower.
• Positives for India:
  
  • India ranks high on macroeconomic stability (90, 43^rd) and market size (93.7, 3^rd),
  • India performs well when it comes to innovation (50.9, 35^th), well ahead of most emerging economies and on par with several advanced economies.
  • Its financial sector (69.5, 40^th) is relatively deep and stable.
• Challenges for India:
  
  • India ranks beyond 100^th on five pillars and features in the top 50 of just four pillars.
  • Major shortcomings in some of the basic enablers of competitiveness, like ICT adoption is limited (31.1, 120^th) but has improved sharply (+8 since the 2017 edition).
  • Health conditions remain poor, as reflected in low healthy life expectancy (59.4 years, 109^th), which is one of the shortest outside Africa and significantly below the South Asian average.
  • Weak banking system (60.4, 89^th).
  • India must also grow its skills base (50.5, 107^th).
  • Product market efficiency (50.4, 101^st) is undermined by a lack of trade openness (43.9, 131^st).
  • The labour market is characterized by a lack of worker rights’ protections, insufficiently developed active labour market policies and critically low participation of women (ratio of female workers to male workers of 0.26, 128^th)
• In South Asia, Sri Lanka is the most improved country in the region at 84^th, Bangladesh (105^th), Nepal (108^th) and Pakistan (110^th).
• China (28^th) is the best performer among the BRICS countries.
  
  • The Russian Federation ranks 43^rd, South Africa is 60^th, India is 68^th and Brazil is ranked 71^st.
• Singapore has become the world's most competitive economy in 2019, pushing the US to second place.
  
  • Hong Kong Special Administrative Region (SAR) is ranked 3^rd, the Netherlands is 4^th and Switzerland is ranked 5^th in the index.
• Vietnam (67^th) registered the highest improvement across the globe.

Source: ET