Global Competitiveness Report
The Global Competitiveness Report (GCR) is a yearly report published by the World Economic Forum
World Economic Forum
The World Economic Forum is a Swiss non-profit foundation, based in Cologny, Geneva, best known for its annual meeting in Davos, a mountain resort in Graubünden, in the eastern Alps region of Switzerland....

. The first report was released in 1979. The 2011–2012 report covers 142 major and emerging economies.

Since 2004, the Global Competitiveness Report ranks countries based on the 'Global Competitiveness Index', developed by Xavier Sala-i-Martin
Xavier Sala-i-Martin
Xavier Sala-i-Martin is a professor of economics at Columbia University.Sala-i-Martin earned his degree from the Autonomous University of Barcelona in 1985 and his Ph.D. from Harvard University in 1990, both in economics...

 and Elsa V. Artadi. Before that, the macroeconomic ranks were based on Jeffrey Sachs
Jeffrey Sachs
Jeffrey David Sachs is an American economist and Director of The Earth Institute at Columbia University. One of the youngest economics professors in the history of Harvard University, Sachs became known for his role as an adviser to Eastern European and developing country governments in the...

's Growth Development Index and the microeconomic ranks were based on Michael Porter
Michael Porter
Michael Eugene Porter is the Bishop William Lawrence University Professor at Harvard Business School. He is a leading authority on company strategy and the competitiveness of nations and regions. Michael Porter’s work is recognized in many governments, corporations and academic circles globally...

's Business Competitiveness Index. The Global Competitiveness Index integrates the macroeconomic and the micro/business aspects of competitiveness into a single index.

Switzerland name of one of the Swiss cantons. ; ; ; or ), in its full name the Swiss Confederation , is a federal republic consisting of 26 cantons, with Bern as the seat of the federal authorities. The country is situated in Western Europe,Or Central Europe depending on the definition....

 leads the ranking as the most competitive economy in the world, as the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

, which ranked first for several years, fell to fifth place due to the consequences of the financial crisis of 2007–2010 and its macroeconomic instability. China continues its relative rise in the rankings reaching 27th.

The report "assesses the ability of countries to provide high levels of prosperity to their citizens. This in turn depends on how productively a country uses available resources. Therefore, the Global Competitiveness Index measures the set of institutions, policies, and factors that set the sustainable current and medium-term levels of economic prosperity."


Since 2004, the report ranks the world's nations according to the Global Competitiveness Index. The report states that it is based on the latest theoretical and empirical research. It is made up of over 110 variables
Variable (mathematics)
In mathematics, a variable is a value that may change within the scope of a given problem or set of operations. In contrast, a constant is a value that remains unchanged, though often unknown or undetermined. The concepts of constants and variables are fundamental to many areas of mathematics and...

, of which two thirds come from the Executive Opinion Survey, and one third comes from publicly available sources such as the United Nations
United Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...

. The variables are organized into twelve pillars, with each pillar representing an area considered as an important determinant of competitiveness.

One part of the report is the Executive Opinion Survey which is a survey of a representative sample of business leaders in their respective countries. Respondent numbers have increased every year and is currently just over 13,500 in 142 countries (2010).

The report notes that as a nation develops, wages tend to increase, and that in order to sustain this higher income, labor productivity
Productivity is a measure of the efficiency of production. Productivity is a ratio of what is produced to what is required to produce it. Usually this ratio is in the form of an average, expressing the total output divided by the total input...

 must improve for the nation to be competitive. In addition, what creates productivity in Sweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....

 is necessarily different from what drives it in Ghana
Ghana , officially the Republic of Ghana, is a country located in West Africa. It is bordered by Côte d'Ivoire to the west, Burkina Faso to the north, Togo to the east, and the Gulf of Guinea to the south...

. Thus, the GCI separates countries into three specific stages: factor-driven, efficiency-driven, and innovation-driven, each implying a growing degree of complexity in the operation of the economy.

In the factor-driven stage countries compete based on their factor endowments, primarily unskilled labor and natural resources. Companies compete on the basis of prices and sell basic products or commodities, with their low productivity reflected in low wages. To maintain competitiveness at this stage of development, competitiveness hinges mainly on well-functioning public and private institutions (pillar 1), appropriate infrastructure
Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function...

 (pillar 2), a stable macroeconomic framework (pillar 3), and good health
Health is the level of functional or metabolic efficiency of a living being. In humans, it is the general condition of a person's mind, body and spirit, usually meaning to be free from illness, injury or pain...

 and primary education
Primary education
A primary school is an institution in which children receive the first stage of compulsory education known as primary or elementary education. Primary school is the preferred term in the United Kingdom and many Commonwealth Nations, and in most publications of the United Nations Educational,...

 (pillar 4).

As wages rise with advancing development, countries move into the efficiency-driven stage of development, when they must begin to develop more efficient production processes and increase product quality. At this point, competitiveness becomes increasingly driven by higher education and training (pillar 5), efficient goods markets (pillar 6), efficient labor markets (pillar 7), developed financial markets (pillar 8), the ability to harness the benefits of existing technologies (pillar 9), and its market size, both domestic and international (pillar 10).

Finally, as countries move into the innovation-driven stage, they are only able to sustain higher wages and a higher standard of living
Standard of living
Standard of living is generally measured by standards such as real income per person and poverty rate. Other measures such as access and quality of health care, income growth inequality and educational standards are also used. Examples are access to certain goods , or measures of health such as...

 if their businesses are able to compete by providing new or unique products. At this stage, companies must compete by producing new and different goods using the most sophisticated production processes (pillar 11) and through innovation (pillar 12).

Thus, the impact of each pillar on competitiveness varies across countries, in function of their stages of economic development. Therefore, in the calculation of the GCI, pillars are given different weights depending on the per capita
Per capita
Per capita is a Latin prepositional phrase: per and capita . The phrase thus means "by heads" or "for each head", i.e. per individual or per person...

 income of the nation. The weights used are the values that best explain growth in recent years For example, the sophistication and innovation factors contribute 10% to the final score in factor and efficiency-driven economies, but 30% in innovation-driven economies. Intermediate values are used for economies in transition between stages.

The Global Competitiveness Index is somewhat similar annual reports are the Ease of Doing Business Index
Ease of Doing Business Index
The Ease of Doing Business Index is an index created by the World Bank. Higher rankings indicate better, usually simpler, regulations for businesses and stronger protections of property rights...

 and the Indices of Economic Freedom
Indices of Economic Freedom
The annual survey Economic Freedom of the World is an indicator produced by the Fraser Institute, a Canadian think tank which attempts to measure the degree of economic freedom in the world's nations. This indicator has been used in peer-reviewed studies some of which have found a range of...

. They also look at factors that affect economic growth, but not as many as the Global Competitiveness Report.

2011–2012 rankings

This is the top 30 of the 2011–2012 report
  1. 5.74 (—)
  2. 5.63 (+1)
  3. 5.61 (−1)
  4. 5.47 (+3)
  5. 5.43 (−1)
  6. 5.41 (−1)
  7. 5.41 (+1)
  8. 5.40 (−1)
  9. 5.40 (−3)
  10. 5.39 (+2)
  11. SAR 5.36 (—)
  12. 5.33 (−2)
  13. 5.26 (—)
  14. 5.24 (+3)
  15. 5.20 (+4)
  16. 5.18 (−2)
  17. 5.17 (+4)
  18. 5.14 (−4)
  19. 5.14 (−1)
  20. 5.11 (−4)
  21.  Malaysia 5.08 (+5)
  22. 5.07 (+2)
  23. 5.03 (−3)
  24. 5.02 (−2)
  25. 4.93 (−2)
  26. 4.90 (+1)
  27. 4.89 (−2)
  28. 4.78 (—)
  29. 4.77 (—)
  30. 4.75 (+1)

2008-2009 rankings

The following are the top 30 countries in the 2008-2009 Report.

  1. 5.74

  2. 5.61

  3. 5.58

  4. 5.53

  5. 5.53

  6. 5.50

  7. 5.46

  8. 5.41

  9. 5.38

  10. 5.37

  1. SAR 5.33

  2. 5.30

  3. 5.28

  4. 5.23

  5. 5.22

  6. 5.22

  7. 5.22

  8. 5.20

  9. 5.14

  10. 5.05

  1.  Malaysia 5.04

  2. 4.99

  3. 4.97

  4. 4.93

  5. 4.85

  6. 4.83

  7. 4.72

  8. 4.72

  9. 4.72

  10. 4.70

Main results of the 2010-2011 edition

The main outcomes to be highlighted from the 2010-2011 edition are the following:

Switzerland: Switzerland retains its 1st place position, characterized by an excellent capacity for innovation and a very sophisticated business culture, ranked 4th for its business sophistication and 2nd for its innovation capacity. Switzerland’s scientific research institutions are among the world’s best, and the strong collaboration between the academic and business sectors, combined with high company spending on R&D, ensures that much of this research is translated into marketable products and processes, reinforced by strong intellectual property protection and government support of innovation through its procurement processes.

United States: the United States continues the decline that began last year, falling two more places to 4th position. While many structural features still make its economy extremely productive, a number of escalating weaknesses have lowered the US ranking over the past two years. The evaluation of institutions has continued to decline, falling from 34th to 40th this year. The report states that the public does not demonstrate strong trust of politicians (54th), and the business community remains concerned about the government’s ability to maintain arms-length relationships with the private sector (55th) and considers that the government spends its resources relatively wastefully (68th).

Ireland: the Ireland’s decline in rank is attributable to a weakening macroeconomic environment as well as continuing concerns related to financial markets (with a precipitous fall from 7th two years ago to 45th last year and 98th position this year in this pillar). After already falling six places last year.

Iceland: drops a further five places to 31st position, mainly because of a continuing deterioration in the macroeconomic environment (from 119th to 138th) and weaker financial markets (down from 20th two years ago to 85th last year and 122nd this year). Yet despite these concerns, Iceland also benefits from a number of clear competitive strengths in moving to a more sustainable economic situation.

Spain: Spain drops nine places in edition to 42nd position. The decline is in large part attributable to an increasingly negative assessment of the labor and financial markets as well as the level of sophistication of the country’s businesses. On a more positive note, Spain’s competitiveness performance continues to be boosted by the large market (13th) available to its national companies, strong technological adoption (30th in the technological readiness pillar), first-class infrastructure (14th), and good higher education and training (31st).

China: up two positions to 27th place, China has reinforced its position within the top 30. It is the only BRIC country to improve in the rankings this year, thus increasing the gap with the other three. China’s performance remains stable in most areas measured with the Index compared with last year, with its main strengths its large and growing market size, macroeconomic stability, and relatively sophisticated and innovative businesses.

Chile: Stable at 30th, Chile remains the most competitive country in Latin America and the Caribbean, with a very convincing performance resting notably on solid basic requirements (37th) and efficiency enhancers (35th). The country has been at the forefront of market liberalization and opening, resulting in very efficient goods and labor markets (28th and 44th, respectively), one of the most sophisticated financial markets (41st), and the largest pension industry in the region.

Argentina: Argentina is fairly stable at 87th, continuing to feature in the bottom part of the rankings. The picture is rather mixed: important strengths, such as its extensive market size (24th) and fairly good educational system at the primary and higher levels (ranked 60th and 55th for health and primary education and higher education and training, respectively), do not seem to compensate for the serious and enduring shortcomings undermining Argentina’s long-term growth potential.

Qatar: ranked 17th, enters the top 20 this year and reaffirms its position as the most competitive country in the region. With a projected growth rate of 18.5 percent for 2010, the country is the fastest-growing economy in the world, as well as one of the wealthiest. Its strong competitiveness rests on solid foundations made up of a high-quality institutional framework, ranked 10th overall, a stable macroeconomic environment (8th), and an efficient goods market (12th). Low levels of corruption and undue influence on government decisions, high government efficiency, and excellent security are the cornerstones of the country’s solid institutional framework.


1. Institution
An institution is any structure or mechanism of social order and cooperation governing the behavior of a set of individuals within a given human community...

A. Public institutions
1. Property rights
1.01 Property rights
2. Ethics and corruption
1.02 Diversion of publics funds
1.03 Public trust of politicians
3. Undue influence
2. Accountability
Accountability is a concept in ethics and governance with several meanings. It is often used synonymously with such concepts as responsibility, answerability, blameworthiness, liability, and other terms associated with the expectation of account-giving...

1.13 Efficacy of corporate boards
1.14 Protection of minority shareholders’ interests
1.15 Strength of auditing and accounting standards
2. Infrastructure
Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function...

2.01 Overall infrastructure quality
2.02 Railroad infrastructure development
2.03 Quality of port infrastructure
2.04 Quality of air transport infrastructure
2.05 Quality of electricity supply
2.06 Telephone lines (hard data)
3. Macroeconomy
3.01 Government surplus/deficit (hard data)
3.02 National savings rate (hard data)
3.03 Inflation (hard data)
3.04 Interest rate spread (hard data)
3.05 Government debt (hard data)
3.06 Real effective exchange rate
Trade weighted index
The Trade Weighted Index, also known as the effective exchange rate, is a multilateral exchange rate which is a weighted average of exchange rates of home and foreign currencies, with the weight for each foreign country equal to its share in trade...

 (hard data)
4. Health
Health is the level of functional or metabolic efficiency of a living being. In humans, it is the general condition of a person's mind, body and spirit, usually meaning to be free from illness, injury or pain...

 and primary education
A. Health
4.01 Medium-term business impact of malaria
4.02 Medium-term business impact of tuberculosis
4.03 Medium-term business impact of HIV/AIDS
4.04 Infant mortality (hard data)
4.05 Life expectancy (hard data)
4.06 Tuberculosis prevalence (hard data)
4.07 Malaria prevalence (hard data)
4.08 HIV prevalence (hard data)
B. Primary education
Primary education
A primary school is an institution in which children receive the first stage of compulsory education known as primary or elementary education. Primary school is the preferred term in the United Kingdom and many Commonwealth Nations, and in most publications of the United Nations Educational,...

4.09 Primary enrolment (hard data)
5. Higher education
Higher education
Higher, post-secondary, tertiary, or third level education refers to the stage of learning that occurs at universities, academies, colleges, seminaries, and institutes of technology...

 and training
A. Quantity of education
5.01 Secondary enrolment ratio (hard data)
5.02 Tertiary enrolment ratio (hard data)
B. Quality of education
5.03 Quality of the educational system
5.04 Quality of math and science education
5.05 Quality of management schools
C. On-the-job training
5.06 Local availability of specialized research and training services
5.07 Extent of staff training
6. Market efficiency
A. Good markets: Distortions, competition, and size
1. Distortions
6.01 Agricultural policy
Agricultural policy
Agricultural policy describes a set of laws relating to domestic agriculture and imports of foreign agricultural products. Governments usually implement agricultural policies with the goal of achieving a specific outcome in the domestic agricultural product markets...

6.02 Efficiency of legal framework
6.03 Extent and effect of taxation
6.04 Number of procedures required to start a business (hard data)
6.05 Time required to start a business (hard data)
2. Competition
Competition is a contest between individuals, groups, animals, etc. for territory, a niche, or a location of resources. It arises whenever two and only two strive for a goal which cannot be shared. Competition occurs naturally between living organisms which co-exist in the same environment. For...

6.06 Intensity of local competition
6.07 Effectiveness of antitrust policy
6.08 Imports (hard data)
6.09 Prevalence of trade barriers
6.10 Foreign ownership restrictions
3. Size
0.00 GDP – exports + imports (hard data)
6.11 Exports (hard data)
B. Labor markets: Flexibility and efficiency
1. Flexibility
6.12 Hiring and firing practices
6.13 Flexibility of wage determination
6.14 Cooperation in labor-employer relations
2. Efficiency
6.15 Reliance on professional management
6.16 Pay and productivity
6.17 Brain drain
Brain drain
Human capital flight, more commonly referred to as "brain drain", is the large-scale emigration of a large group of individuals with technical skills or knowledge. The reasons usually include two aspects which respectively come from countries and individuals...

6.18 Private sector employment of women
Feminisation of the workplace
In response to the pressure from feminism and cultural trends highlighting characteristics in workers which have culturally been associated with women, feminisation of the workplace is a label given to the trend towards greater employment of women, and of men willing and able to operate with these...

C. Financial markets: Sophistication and openness
6.19 Financial market sophistication
6.20 Ease of access to loans
6.21 Venture capital availability
6.22 Soundness of banks
6.23 Local equity market access
7. Technological readiness
7.01 Technological readiness
7.02 Firm-level technology absorption
7.03 Laws relating to ICT
7.04 FDI and technology transfer
7.05 Cellular telephones (hard data)
7.06 Internet users (hard data)
7.07 Personal computers (hard data)
8. Business sophistication
A. Networks
Business networking
Business networking is a socioeconomic activity by which groups of like-minded businesspeople recognize, create, or act upon business opportunities. A business network is a type of social network whose reason for existing is business activity...

 and supporting industries
8.01 Local supplier quantity
8.02 Local supplier quality
B. Sophistication of firms’ operations and strategy
8.03 Production process sophistication
8.04 Extent of marketing
8.05 Control of international distribution
8.06 Willingness to delegate authority
8.07 Nature of competitive advantage
8.08 Value-chain presence
9. Innovation
Innovation is the creation of better or more effective products, processes, technologies, or ideas that are accepted by markets, governments, and society...

9.01 Quality of scientific research institutions
9.02 Company spending on research and development
9.03 University/industry research collaboration
9.04 Government procurement of advanced technology products
9.05 Availability of scientists and engineers
9.06 Utility patents (hard data)
9.07 Intellectual property
Intellectual property
Intellectual property is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized—and the corresponding fields of law...

9.08 Capacity for innovation

External links

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