Global competitiveness index of the country

States around the world are trying to gain recognition not only of their people, but also take possession of the first lines of different ratings. Each country tries to be the best in one or all at once. Powers recognize the most cultural, the most democratic, economically developed, peaceful or powerful. Everywhere the government will not succeed. Nevertheless, there are also such powers that are fighting for primacy in everything.

Of all the diversity of honorary awards, you can choose the first place in another rating, which depends on the global index of competitiveness. We'll talk more about this in more detail.

Economy is not an easy thing

Most countries of the world have their own strategic goals. But there are those that any power tries to fulfill. It is important for the state to ensure economic growth. Here it is possible to attribute struggle for well-being of each citizen.

Such a strategy presupposes not only the efforts of the authorities to improve the standard of living, but also determines additional requirements for the management of socio-economic development. Some states have chosen the path through innovative technologies. As the experience of international relations has shown, it is thanks to this strategy that the countries of the "economic miracle" managed to improve their financial growth. It turns out that the index of global competitiveness is influenced by the stimulation of innovation activity.

But such an economic model is not subject to all states. There are those who still can not establish an effective strategy for the development of innovation. These include not only the Russian Federation, but also the rest of the CIS countries.

It is necessary to do something

Entrepreneurship is the driving force in the development of competitiveness. Of course, along with it there are many factors, nevertheless it is thanks to entrepreneurship that it is possible to influence innovative technologies. In turn, this type of activity is subject to many indicators that reflect the country's economic policy and the state institutions.

Who is in charge?

In 1971, the World Economic Forum (WEF) was established. This organization is known for collecting heads of state annually in Davos. In addition to leaders, business leaders, well-known economists and journalists come here. For 45 years, the forum has been discussing issues related not only to the economy, but also to other acute world problems: environmental protection and health.

It is worth noting that this is a Swiss organization, founded by Professor Klaus Schwab. At the moment he is also a permanent leader. There is also a permanent executive body - the Board of Directors. Membership in the WEF are about 1000 companies, organizations around the world.

The World Economic Forum was created not only for discussions. Another of his tasks is to study the spheres of politics and economics. In 1979, an annual report on global competition was introduced. He estimated more than a hundred countries of the world on two criteria: the index of potential growth and competitiveness.

Expert-analytical research

To build the state in the rating, it took a global study aimed at analyzing economic processes. Thus, scientists were able to derive a global index of competitiveness of the World Economic Forum.

Previously, this non-governmental organization produced only reports. But already since 2004, it has directly created a rating of the states, which was based on the index. This indicator assesses the country's ability to ensure a high level of well-being of citizens. It also took into account the efficiency of the use of domestic resources, support for the standard of living, labor productivity and quality of services.

The tasks of the WEF

Before calculating the index of global competitiveness, specialists should analyze the publicly available statistics and the results of a global survey of company heads.

By definition of the organization, national competitiveness is the ability of the state and its institutions to influence the stable growth of the economy. Researchers have found a link between the level of competitiveness and the well-being of citizens. The higher the first indicator, the more positive the second.

Purpose of the index

The idea of the forum is that the state needs to use the results of the research. This assessment allows us to understand that the country should strive to eliminate the difficulties on the way to improving economic development and competitiveness. The index is a tool in studying problem sectors of economic policy and developing strategies for improving the political model.

Impact

Representatives of the WEF argue that in order to determine competitiveness, attention needs to be paid to numerous and diverse factors. It is obvious that the impact on the economy can be negative for a number of reasons: this includes unproductive regulation of the country's budget, high inflation rates.

In turn, there are also those factors that have a positive impact on the economy: ensuring the protection of intellectual property rights, progressive judicial system, balanced political decisions.

Not only institutional factors can affect the financial system. There are also training and retraining of working personnel, the possibility of round-the-clock education and technological development. All factors can have different effects on this or that economic system.

Constituent elements

It is known that in the analysis the index of global competitiveness of the WEF is combined with the index of business competitiveness. The decisive word is still behind the first indicator. By the way, this index was created by the scientist Xavier Sala-i-Martin, who teaches at Columbia University. He just developed this assessment for the World Economic Community.

So, to determine the score, you need to refer to 113 variables. Some of these factors are formed due to global surveys, the part consists of statistical data and research results. All 113 variables are divided into 12 categories. They were chosen through empirical and theoretical research.

But it is worth noting that none of these variables can independently assess the competitiveness of the state. In addition, all factors are related. The productivity of the market for goods and services depends on the qualifications and professionalism of the workforce.

To monitor macroeconomic permanence, it is necessary to effectively manage the country's budget, to stop corruption and ensure the transparency of the economic system. Entrepreneurs can organize new technologies only if their profits exceed investment costs.

Thus, it is clear that the country's global competitiveness index is headed by those countries that can pursue a comprehensive policy, looking at a number of factors and the relationship between them.

What is the difference?

Researchers VEF primarily take into account the progress of the economy of a particular power. At the same time, they trace its development at different stages. The interpretation of each variable for the state is related to its initial circumstances or to its structural and organizational parameters. These data allow the position of the state among others through the prism of development.

Scientists work daily on the methodology of computation, so that the index of global competitiveness remains an objective and adequate mechanism for controlling the level of the economy with constant changes in the global environment.

Methodology

So, as mentioned earlier, the study analyzes 113 indicators. They are grouped into 12 categories. Only 34 variables are calculated from publicly available statistics. This includes external debt, budget deficits, living standards and other indicators. The rest of the factors refers to the global survey, which includes the opinion of more than 14 thousand company executives.

According to this principle, states are divided into stages of economic development. In this case, only GDP per capita is taken into account. Although there are exceptions, for example, for Russia in this case apply the second criterion - the degree of dependence of the country's development on the main factors. Such a privilege is applicable in the case when the state has a dependence on mineral resources.

Stages of

As mentioned earlier, it is necessary first to determine the stage of development of the state. In total, there are 5 of them: 37 economies of countries belong to the factorial development. These include most of the African states, as well as India, the Kyrgyz Republic, Vietnam, etc.

The second group is a transition stage from factor development to effective. In this category are 16 states: Azerbaijan, Iran, Moldova, Mongolia, etc. The third group includes the second stage of development - effective. There are 30 economies: Ukraine, China, Serbia, South Africa, Bulgaria, Armenia, etc.

The fourth group is also considered a transitional stage, but from an effective to an innovative one. In this category there are 24 economies: Russia, Brazil, Kazakhstan, Turkey, Uruguay, Poland, the United Arab Emirates, etc. The latter group is the third stage of development. The innovative economy includes 37 countries: among them the majority of European, as well as the US, Australia, New Zealand, South Korea, Japan, etc.

Study 2016

In 2016, the World Economic Forum has already been held. The study this time covered the analysis of 138 countries. The index of global competitiveness 2016-2017 again placed in the state's places. Now every government has a result, on which it can rely.

The leader of this race is Switzerland. It has occupied the first line for eight years in a row. After it, Singapore and the United States remained. Their global competitiveness index of 2016 is 5.8 and 5.7 units. These states are leaders in supplying the world with innovative products and services.

Since last year, dozens of leaders have not transformed themselves. After Switzerland, Singapore and the USA Index 5.6 received the Netherlands and Germany, 5.5 - Sweden, Great Britain, Japan and Hong Kong, 5.4 - Finland and Norway.

Loss of position

A study of this year showed that there are also negative trends. The global competitiveness index of 2016 depends on the impact of other organizations on states. It's about the EU. The efforts of this institution preserve the gap between the European powers. The rating shows that the countries of Northern and Western Europe are leading the economic "hit parade". But the Southern part suffers from financial decline, which affects the index indicators. Spain took 32nd place, Italy - 44, Greece over the past year moved down five positions and takes 86th place.

The Middle East and North Africa are still continuing to descend. Qatar last year occupied 14th place, now it is at 18. Saudi Arabia has also passed four positions and is on the 29th line. Again this year did not receive the global competitiveness index Iraq. This indicates that the situation in the country is very deplorable.

Central and South Africa, too, graze the rear. The leaders remain: Mauritius on the 45th line, South Africa by 47 and Rwanda by 52. All other states that are on this territory are lagging behind. Each of them needs external assistance, which would strengthen economic development and increase the global competitiveness index.

CIS countries

The Russian Federation, unlike many other powers, managed to rise to two levels and took 43rd place. The economy is strange at the moment in a recession, but a positive result was obtained due to the efficiency of the domestic market and the reduction of bureaucratic obstacles. Also, progress is observed in education. A high inflation, low inflow of capital is pulling down the country.

Kazakhstan in the global index of competitiveness received 53rd place. Comparatively with last year, this is a very bad result, since the country has already descended to 11 positions. According to five criteria out of 12, Kazakhstan has improved noticeably, the other 7, on the contrary, show regress. There are factors that have positively affected the Global Competitiveness Index 2016. Kazakhstan has made progress on innovative technologies, entrepreneurship, secondary and higher education.

Ukraine showed a negative result. She fell from 79th place to 85th. The main problems of the country are political instability, corruption, inflation, state bureaucracy and high taxes.

Azerbaijan improved its last year's result by three steps and took 37th place. Now this state is the leader among the CIS countries. Positive result was shown by Tajikistan, moving from the 80th place to the 77th. Armenia also improved by three positions and is on the 79th place. But Moldova (100) and Kyrgyzstan (111) have significantly worsened their testimonies. In the first case, the country went down by as much as 16 positions, and in the second - by 9.