1 / 47

Global Competitiveness Index

ECON2180. Global Competitiveness Index. Wong Check Ying 04003446 Cheung Siu Wun 04004485 Lee Po Hung 04005856 Leung Yee Ka 04014057. Introduciton. Introduction. Global Competitiveness Report is published by the World Economic Forum Assessed 117 economies

travis
Download Presentation

Global Competitiveness Index

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. ECON2180 Global Competitiveness Index Wong Check Ying 04003446 Cheung Siu Wun 04004485 Lee Po Hung 04005856 Leung Yee Ka 04014057

  2. Introduciton

  3. Introduction • Global Competitiveness Report is published by the World Economic Forum • Assessed 117 economies • understanding the key ingredients of economic growth and prosperity

  4. Introduction • Based on two indexes - Growth Competitiveness Index - Business Competitiveness Index • Amendment in 2004 - Global Competitiveness Index - 9 pillars---institutions, infrastructure, market efficiency, business sophistication, higher education and training, etc

  5. Growth Competitiveness Index

  6. Growth Competitiveness Index (GCI) • measure the capacity of the national economy to achieve sustained economic growth • a number of complementary concepts • providing a quantified framework for measuring competitiveness • Limitations - from small and homogenous economies to big and diverse societies

  7. Growth Competitiveness Index (GCI) • hard data - university enrollment rates, inflation performance, the state of the public finances, the level of penetration of new technologies, etc • survey data drawn from the World Economic Forum’s Executive Opinion Survey - captures the expert opinions of business leaders and entrepreneurs on macroeconomic environment, corruption, technology, innovation and diffusion, domestic competition, etc

  8. Growth Competitiveness Index (GCI) • Core innovators are countries with more than 15 US utility patents registered per million population • non-core innovators are all other countries

  9. Growth Competitiveness Index (GCI) • explaining the evolution of growth in a country---“three pillars” - thequality of the macroeconomic environment - thestate of the country’s public institutions - the level of its technological readiness • 3 indexes - the technology index - the public institution index - the macroeconomic environment index

  10. Technology Index

  11. Growth Competitiveness Index (GCI) Technology Index • measures the capacity for innovation and diffusion of technology • 3 sub-indexes - innovation sub-index measures the levels of technological sophistication - technology transfer sub-index - information and communication technology sub- indexmeasures of telephone lines, personal computers, Internet usage, etc

  12. Growth Competitiveness Index (GCI) Technology Index • Technology index for core economies / innovators = 1/2 innovation sub-index + 1/2 ICT sub-index • Technology index for non-core economies / innovators = 1/8 innovation sub-index + 3/8 technology transfer sub-index + 1/2 ICT sub-index

  13. Growth Competitiveness Index (GCI) Technology Index • Innovation sub-index = 1/4 Survey data + 3/4 hard data • Technology Transfer sub-index = un-weighted average of two technology transfer survey questions • Information and Communication technology sub-index = 1/3 survey data + 2/3 hard data

  14. Growth Competitiveness Index (GCI) Technology Index

  15. Public Institution Index

  16. Growth Competitiveness Index (GCI) Public Institutions Index • measures the role of politics and the bureaucracy in supporting market-based economic activity and the division of labor • 2 sub-indexes - the contracts and law sub-index concerns neutrality in government procurement, clear delineation and respect for property rights, etc - the corruption sub-index measures the pervasiveness of bribery in three key public service areas

  17. Growth Competitiveness Index (GCI) • Public institutions index = 1/2 contracts and law sub-index + 1/2 corruption sub-index Public Institutions Index

  18. Growth Competitiveness Index (GCI) Public Institutions Index

  19. Macroeconomic Environment Index

  20. Growth Competitiveness Index (GCI) Macroeconomic Environment Index • Measures variables related to capital accumulation and the efficiency of the division of labor • 1 sub-index - the macroeconomic stability sub-index include the real exchange rate relative to the US, the general government budget balance, consumer price inflation, etc

  21. Growth Competitiveness Index (GCI) Macroeconomic Environment Index • Macroeconomic environment index = 1/2 macroeconomic stability sub-index + 1/4 country credit rating + 1/4 government waste • Macroeconomic stability sub-index = 5/7 hard data + 2/7 survey data

  22. Growth Competitiveness Index (GCI) Macroeconomic Environment Index

  23. Growth Competitiveness Index (GCI) • GCI for core economies / innovators = 1/2 technology index + 1/4 public institution index + 1/4 macroeconomic environment index • GCI for non-core economies / innovators = 1/3 technology index + 1/3 public institutions index + 1/3 macroeconomic environment index

  24. Growth Competitiveness Index (GCI)

  25. Business Competitiveness Index

  26. The Business Competitiveness Index (BCI) • underlying microeconomicfactors • determine economies’ current sustainable levels of productivity and competitiveness • complementary approach to the forward-looking macroeconomic approach of the GCI • highly skilled people, efficiency of government processes, quality of infrastructure, the competitive pressures faced by companies, etc

  27. The Business Competitiveness Index (BCI) • measures two areas that are critical to the microeconomic business environment in an economy - the sophistication of company operations and strategy - the quality of the overarching national business environment in which they are operating

  28. The Business Competitiveness Index (BCI) • 2 sub-indexes - companies’ operations and strategies - quality of the national business environment

  29. The Business Competitiveness Index (BCI)

  30. Relationship between GCI and BCI

  31. Competitiveness VS Economic Outcomes

  32. Partial regression results of GCIvs. GDP per capita growth

  33. GDP 2005 Data source: 2005 CIA World Factbook

  34. Competitiveness VS. GDP About GCI Countries with high GDP - United States (rank2)-----GCI ranking 2 - Japan (rank 5)-----GCI ranking 12 Countries with relative high GDP - Denmark (rank 45)---- GCI ranking 4 Countries with low GDP - Iceland (rank 139)---- GCI ranking 7

  35. Competitiveness VS. GDP About BCI Countries with high GDP - United States (rank2)-----BCI ranking 1 - Japan (rank 5)-----BCI ranking 8 Countries with relative high GDP - Denmark (rank 45)---- BCI ranking 4 Countries with low GDP - Iceland (rank 139)---- BCI ranking 17

  36. GDP - per capita 2005 Data source: 2005 CIA World Factbook

  37. Competitiveness VS. GDP per capita About GCI Countries with high per capita GDP - United States (rank 2)-----GCI ranking 2 - Hong Kong (rank 7)-----GCI ranking 12 Countries with relative high per capita GDP - Japan (rank 18)---- GCI ranking 4 Countries with low per capita GDP - Peru (rank 98)---- GCI ranking 68

  38. Competitiveness VS. GDP per capita About BCI Countries with high per capita GDP - United States (rank 2)-----BCI ranking 1 - Hong Kong (rank 7)-----BCI ranking 20 Countries with relative high per capita GDP - Japan (rank 18)---- BCI ranking 8 Countries with low per capita GDP - Peru (rank 98)---- BCI ranking 81

  39. GDP - real growth rate(%) 2005 Data source: 2005 CIA World Factbook

  40. Competitiveness VS. GDP real growth rate (%) About GCI Countries with high GDP real growth rate - Chad (rank 2)-----GCI ranking 117 - Mongolia (rank 11)-----GCI ranking 96 Countries with relative high GDP real growth rate - Hong Kong (rank 23)---- GCI ranking 12 Countries with low GDP real growth rate - Iceland (rank 74)---- GCI ranking 7 - Germany (rank 75)---- GCI ranking 15

  41. Competitiveness VS. GDP real growth rate (%) About BCI Countries with high GDP real growth rate - Chad (rank 2)-----BCI ranking 116 - Mongolia (rank 11)-----BCI ranking 104 Countries with relative high GDP real growth rate - Hong Kong (rank 23)---- BCI ranking 20 Countries with low GDP real growth rate - Iceland (rank 74)---- BCI ranking 17 - Germany (rank 75)---- BCI ranking 3

  42. Comparison between WCI & GCR

  43. What is WCI? • WCI stands for World Competitiveness Index • indicated in the World Competitiveness Yearbook • most renowned and comprehensive annual report on the competitiveness of nations, ranking and analyzing how a nation environment creates and sustains the competitiveness of enterprises

  44. Conclusion

  45. Conclusion • GDP and competitiveness are normally positively related , but there still some exception like Iceland which has low GDP but high competitiveness • GDP per capita are normally in positive relation • Real GDP growth rate are in negative relation to competitiveness • They are only one of the sub-indexes • should not focus on one pillar only

More Related