The 2018 edition of the Global Competitiveness Report represents a milestone in the four-decade history of the series, with the introduction of the new Global Competitiveness Index 4.0. The new index sheds light on an emerging set of drivers of productivity and long-term growth in the era of the Fourth Industrial Revolution. It provides a much-needed compass for policy-makers and other stakeholders to help shape economic strategies and monitor progress.
The Index, generated using a new methodology that measured economies against 98 indicators, organised into 12 ‘pillars’, ranked 140 countries to determine how they are adapting to the Fourth Industrial Revolution. It found out that factors like human capital, agility, resilience, openness and innovation are becoming more important.
Global Findings
The United States ranked first on the Global Competitiveness Report scoring 85.6 out of 100, ranked top three in seven of the pillars. Followed by Singapore (83.5) and Germany (82.8). Globally, the median score is 60. Twenty-one countries, including 18 in sub-Saharan Africa, score lower than 50. With a score of 35.5—fully 50 points behind the United States—Chad is the furthest from the frontier and therefore ranked last. Chad is the least competitive in the world with 35.5 out of 100.
Sub-Saharan Africa Findings
The economic prospects of Sub-Saharan Africa are at crossing point. The average GDP growth of the region has fallen below 5% since 2015 and is expected to grow at 3.4% in 2018. The score attained by the regional leaders (Mauritius, 63.7, and South Africa, 60.8) are almost twice as large as those of the two least competitive economies.
Mauritius, ranked 49th, is the only African country among the top 50 most competitive countries with 63.7 points out of 100. Mauritius’s leading position in the region is reflected in a GDP growth consistently above 3% since 2006, and above 4% over the past three years. The competitiveness performance of Mauritius is relatively strong in eight of 12 GCI pillars, where it ranks 67th or higher. Among these eight pillars Mauritius has achieved its best score on the Product market pillar (65.6, 19th), thanks to a high degree of openness (6th) and a non-distortive fiscal policy (62.6, 16th).
In addition, Mauritius is characterized by strong business dynamism (66.5, 35th) and sustained by lean administrative requirements (83.2) that enable companies to open and close with relative ease. Finally, Mauritius has achieved a strong performance on the Institutions pillar (38th, 62.9), second only to Rwanda in the region.
This is a considerable competitive advantage in SubSaharan Africa, where 65% of economies score below 50. On the other hand, the pillars where Mauritius delivers a weaker performance are those related to human capital: the Labour market (58.3, 74th), Skills (61.0, 74th) and Health (77.7, 83rd) pillars. In particular, Mauritius is penalized by high redundancy costs (73.6 weeks of salary, 136th) and limited participation in the various levels of the educational system (6.8 mean years of schooling, 106th).
Please click HERE to access the full Global Competitiveness Report 2018.
Source: World Economic Forum
Photo by Simson Petrol on Unsplash
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