Global Competitiveness Index 4.0: WEF | 10 Oct 2019

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 68th compared to the 58th rank of 2018 primarily because of faster improvements of several countries previously ranked lower.
  • Positives for India:
    • India ranks high on macroeconomic stability (90, 43rd) and market size (93.7, 3rd),
    • India performs well when it comes to innovation (50.9, 35th), well ahead of most emerging economies and on par with several advanced economies.
    • Its financial sector (69.5, 40th) is relatively deep and stable.
  • Challenges for India:
    • India ranks beyond 100th 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, 120th) but has improved sharply (+8 since the 2017 edition).
    • Health conditions remain poor, as reflected in low healthy life expectancy (59.4 years, 109th), which is one of the shortest outside Africa and significantly below the South Asian average.
    • Weak banking system (60.4, 89th).
    • India must also grow its skills base (50.5, 107th).
    • Product market efficiency (50.4, 101st) is undermined by a lack of trade openness (43.9, 131st).
    • 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, 128th)
  • In South Asia, Sri Lanka is the most improved country in the region at 84th, Bangladesh (105th), Nepal (108th) and Pakistan (110th).
  • China (28th) is the best performer among the BRICS countries.
    • The Russian Federation ranks 43rd, South Africa is 60th, India is 68th and Brazil is ranked 71st.
  • 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 3rd, the Netherlands is 4th and Switzerland is ranked 5th in the index.
  • Vietnam (67th) registered the highest improvement across the globe.

Source: ET