Global Competitiveness Report

The 2012-2013 World Economic Forum Global Competitiveness report has insightful information It uses 2011 data but it is useful for undertanding global competitiveness and the broad strengths and weaknesses of nations.

Here are the twelve pillars of competitiveness. A country can still be competitive with some weakness in different pillars but crippling deficiencies can break a country. You can think of a football team that has a weak offense but a strong defense and strong specialty teams and does not turnover the ball or a football team that has okay offense but pretty good defense but turns the ball over a lot and has a lot of penalties and terrible kicking.

It is important to keep in mind that they are not independent: they tend to reinforce each other, and a weakness in one area often has a negative impact in others. For example, a strong innovation capacity (pillar 12) will be very difficult to achieve without a healthy, well-educated and trained workforce (pillars 4 and 5) that is adept at absorbing new technologies (pillar 9), and without sufficient financing (pillar 8) for R&D or an efficient goods market that makes it possible to take new innovations to market (pillar 6). Although the pillars are aggregated into a single index, measures are reported for the 12 pillars separately because such details provide a sense of the specific areas in which a particular country needs to improve.

While all of the pillars described above will matter to a certain extent for all economies, it is clear that they will affect them in different ways: the best way for Cambodia to improve its competitiveness is not the same as the best way for France to do so. This is because Cambodia and France are in different stages of development: as countries move along the development path, wages tend to increase and, in order to sustain this higher income, labor productivity must improve.

This report is for 2012-2013. China in 2014 is going to the transition from stage 2 to stage 3.

China’s Competitiveness in Detail

USA Competitiveness in Detail

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