imd executive_summary imd competitiveness

IMD World Competitiveness Yearbook 2015Executive Summary

An Exclusive Report Specially Prepared for our Panel of Experts

1Contents

The 2015 IMD World Competitiveness Scoreboard 3Overall Ranking & Competitiveness Factors 4What is Competitiveness ? 6How do we Measure Competitiveness ? 72/3 Hard Data: 81/3 Survey Data: 8Selected Criteria 9Purchase 13Criterion of the Month 14Country Profiles 18

Argentina 20Australia 21Austria 22Belgium 23Brazil 24Bulgaria 25Canada 26Chile 27China Hong Kong 28China Mainland 29Colombia 30Croatia 31Czech Republic 32Denmark 33Estonia 34Finland 35France 36Germany 37Greece 38Hungary 39Iceland 40India 41Indonesia 42Ireland 43Israel 44Italy 45Japan 46Jordan 47Kazakhstan 48Korea 49Latvia 50

Lithunia 51Luxembourg 52Malaysia 53Mexico 54Mongolia 55Netherlands 56New Zealand 57Norway 58Peru 59Philippines 60Poland 61Portugal 62Qatar 63Romania 64Russia 65Singapore 66Slovak Republic 67Slovenia 68South Africa 69Spain 70Sweden 71Switzerland 72Taiwan 73Thailand 74Turkey 75UAE 76Ukraine 77United Kingdom 78USA 79Venezuela 80

2In the past year, the dynamism of competitiveness kept our research on its toes. Therefore in this edition of the IMD World Competitiveness Yearbook, we begin the process of revisiting the fundamentals of the competitiveness conceptual framework aiming to strengthen our ground-breaking research. We thus introduce a revised understanding of competitiveness to reflect the extent to which countries are able to provide a context wherein businesses can achieve sustainable value creation.

We are admittedly at the initial stages of the process. The re-evaluation of our current understanding of competitiveness-related tenets will be gradual. We nevertheless consider that the pay-off of our endeavour will be a more measurable conception of competitiveness and the development of more accurate instruments to assess it.

This edition of the Yearbook, in addition, incorporates Mongolia and expands the number of criteria to accommodate new aspects of competitiveness. It thus assesses the competitiveness of 61 countries

employing over 340 criteria. Our partnership with 55-strong network of Partner Institutes underlines the reliability of the data we employ and the relevance of our research.

This years results show a considerable impact of business efficiency. The competitiveness of countries is thus greatly correlated to the ability of enterprises to remain profitable over time. At the same time, businesses maximization of the positive externalities originating in their activities bolsters their long-term profitability. Those externalities include, for example, minimizing any environmental impact and providing an organizational context that enables their workforce to thrive.

We would like to reiterate our commitment to the continuous strengthening of the IMD World Competitiveness Centers research strategy and methodology. Our objective in doing so is to contribute to furthering our knowledge of what drives the prosperity of countries.

Professor Arturo Bris

Director IMD World Competitiveness Center

3(2014 rankings are in parentheses)

COMPETITIVENESS SCOREBOARD (Ranks 1 - 30)

(1) USA 1

(4) China Hong Kong 2

(3) Singapore 3

(2) Switzerland 4

(7) Canada 5

(11) Luxembourg 6

(10) Norway 7

(9) Denmark 8

(5) Sweden 9

(6) Germany 10

(13) Taiwan 11

(8) UAE 12

(19) Qatar 13

(12) Malaysia 14

(14) Netherlands 15

(15) Ireland 16

(20) New Zealand 17

(17) Australia 18

(16) United Kingdom 19

(18) Finland 20

(24) Israel 21

(23) China Mainland 22

(28) Belgium 23

(25) Iceland 24

(26) Korea Rep. 25

(22) Austria 26

(21) Japan 27

(34) Lithuania 28

(33) Czech Republic 29

(29) Thailand 30

100.000

96.037

94.950

91.916

90.410

89.411

87.915

87.077

85.921

85.637

85.405

84.750

84.626

84.113

83.615

82.969

81.808

80.452

79.932

78.447

77.453

76.987

75.442

74.118

73.921

72.878

72.827

71.737

70.834

69.786

0 10 20 30 40 50 60 70 80 90 100

(2014 rankings are in parentheses)

COMPETITIVENESS SCOREBOARD (Ranks 31 - 61)

(30) Estonia 31

(27) France 32

(36) Poland 33

(32) Kazakhstan 34

(31) Chile 35

(43) Portugal 36

(39) Spain 37

(46) Italy 38

(41) Mexico 39

(40) Turkey 40

(42) Philippines 41

(37) Indonesia 42

(35) Latvia 43

(44) India 44

(38) Russia 45

(45) Slovak Republic 46

(47) Romania 47

(48) Hungary 48

(55) Slovenia 49

(57) Greece 50

(51) Colombia 51

(53) Jordan 52

(52) South Africa 53

(50) Peru 54

(56) Bulgaria 55

(54) Brazil 56

() Mongolia 57

(59) Croatia 58

(58) Argentina 59

(49) Ukraine 60

(60) Venezuela 61

69.213

69.037

68.758

68.106

64.813

64.181

63.542

60.961

60.933

60.501

60.153

59.906

59.780

59.485

58.510

57.176

57.133

56.996

56.759

54.186

53.863

53.602

52.702

52.644

50.318

47.390

47.132

44.757

42.739

41.986

34.261

0 10 20 30 40 50 60 70 80 90 100

The IMD World Compet i t iveness Scoreboard presents the 2015 overall rankings for the 61 economies covered by the WCY. The economies are ranked from the most to the least competitive and the results from the previous years scoreboard (2014) are shown in brackets. The Scores shown to the left are actually indices (0 to 100) generated for the unique purpose of constructing charts and graphics.

The 2015 IMD World Competitiveness Scoreboard

4Overall Ranking & Competitiveness Factors2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

57 57 59 60 61 51 50 54 57 58 45 46 53 53 51 Argentina7 14 13 9 14 7 13 17 16 17 14 19 20 18 19 Australia

27 33 37 36 39 20 20 22 20 28 13 16 17 16 20 Austria39 41 39 43 33 23 29 28 26 22 19 21 18 22 17 Belgium55 55 58 58 60 29 27 37 46 51 51 45 50 52 53 Brazil41 44 47 44 49 57 59 59 60 60 53 52 51 49 49 Bulgaria9 9 9 8 8 8 9 7 10 3 5 6 6 6 6 Canada

12 17 16 21 26 21 21 30 30 35 40 42 46 47 44 Chile1 1 2 2 1 1 1 2 3 1 21 18 21 21 15 China Hong Kong

33 34 41 34 35 25 32 25 28 27 28 29 26 26 25 China Mainland45 50 42 49 51 37 48 44 48 41 54 57 55 56 54 Colombia54 54 54 54 56 59 58 60 59 61 43 41 42 41 43 Croatia28 30 36 38 31 35 41 40 40 31 29 30 29 28 28 Czech Republic13 11 11 11 10 6 15 11 11 8 3 4 4 3 3 Denmark20 24 30 23 20 32 38 39 32 36 33 32 32 30 32 Estonia14 12 12 13 17 15 16 20 13 19 6 5 5 5 5 Finland44 47 44 50 50 47 45 42 37 39 18 14 8 9 12 France24 19 19 16 18 16 17 15 9 16 7 7 7 8 9 Germany56 58 56 57 57 53 56 47 54 43 32 34 35 39 35 Greece52 51 52 53 54 50 49 55 56 57 35 35 38 37 39 Hungary40 38 35 27 22 34 31 36 31 29 9 10 14 13 11 Iceland29 42 46 47 47 22 24 32 34 33 50 53 54 57 58 India25 28 26 25 30 33 35 31 22 34 55 56 56 54 56 Indonesia30 20 17 14 15 18 10 13 4 13 24 22 22 20 24 Ireland16 21 21 24 24 17 18 24 21 21 15 13 13 15 14 Israel51 49 55 55 53 48 44 46 45 44 30 28 30 33 31 Italy50 48 45 42 42 27 33 21 19 25 11 17 10 7 13 Japan31 31 40 31 32 52 51 52 47 47 52 47 52 50 50 Jordan21 18 23 20 21 36 34 38 33 30 46 43 44 45 41 Kazakhstan22 25 20 26 28 26 25 34 39 37 20 20 19 19 21 Korea Rep.

- - 38 29 45 - - 49 38 42 - - 37 31 37 Latvia47 37 34 32 25 45 36 26 35 23 36 31 31 34 30 Lithuania15 16 18 19 12 9 12 16 14 4 22 23 23 23 22 Luxembourg17 13 15 15 16 14 6 4 5 10 27 26 25 25 27 Malaysia43 35 29 41 41 43 42 33 41 38 49 48 49 51 52 Mexico

- - - - 55 - - - - 53 - - - - 59 Mongolia18 15 14 18 13 13 14 14 12 12 12 11 9 11 8 Netherlands8 10 10 7 6 24 28 27 23 15 23 24 24 24 23 New Zealand

11 6 6 6 7 12 8 5 6 5 8 9 11 12 10 Norway36 27 33 33 37 39 40 41 43 50 58 59 60 60 60 Peru37 32 31 40 36 31 26 19 27 26 57 55 57 59 57 Philippines35 36 27 30 29 41 39 35 36 32 34 36 36 36 34 Poland48 46 51 48 34 44 47 48 52 48 25 25 28 29 26 Portugal6 7 5 5 4 5 3 12 24 11 37 40 40 42 47 Qatar

49 52 49 51 46 49 52 57 50 49 42 50 47 43 42 Romania46 45 43 37 44 54 53 53 53 54 38 38 39 35 36 Russia2 2 3 4 2 2 2 8 7 7 10 8 12 10 7 Singapore

42 43 48 45 48 42 43 45 44 45 41 39 41 40 40 Slovak Republic53 53 53 56 52 56 57 58 58 56 31 33 33 32 33 Slovenia32 29 32 35 40 40 37 43 51 52 56 54 58 55 55 South Africa38 40 50 46 43 38 46 50 42 46 26 27 27 27 29 Spain5 8 7 10 11 4 5 3 8 9 2 3 2 4 4 Sweden3 4 4 3 5 11 7 6 2 6 4 2 3 2 2 Switzerland

10 5 8 12 9 3 4 10 17 14 16 12 16 17 18 Taiwan23 26 22 28 27 19 23 18 25 24 47 49 48 48 46 Thailand34 39 28 39 38 30 30 29 29 40 44 44 43 46 45 Turkey4 3 1 1 3 46 19 9 15 18 39 37 34 38 38 UAE

58 56 57 52 59 55 55 51 49 55 48 51 45 44 48 Ukraine26 23 24 17 19 28 22 23 18 20 17 15 15 14 16 United Kingdom19 22 25 22 23 10 11 1 1 2 1 1 1 1 1 USA59 59 60 59 58 58 54 56 55 59 59 58 59 58 61 Venezuela

InfrastructureBusiness EfficiencyGovernment Efficiency

2011 2012 2013 2014 2015 2011 2012 2013 2014 2015Argentina 54 55 59 58 59 39 50 55 50 56 Australia 9 15 16 17 18 13 23 23 24 28 Austria 18 21 23 22 26 24 20 22 17 21 Belgium 23 25 26 28 23 23 18 28 38 22 Brazil 44 46 51 54 56 30 47 42 43 51 Bulgaria 55 54 57 56 55 48 49 49 47 48 Canada 7 6 7 7 5 12 12 11 13 10 Chile 25 28 30 31 35 17 25 21 28 32 China Hong Kong 1 1 3 4 2 4 4 8 7 9 China Mainland 19 23 21 23 22 3 3 3 5 4 Colombia 46 52 48 51 51 41 33 37 40 46 Croatia 58 57 58 59 58 56 56 58 58 57 Czech Republic 30 33 35 33 29 34 29 38 30 26 Denmark 12 13 12 9 8 40 31 35 23 23 Estonia 33 31 36 30 31 51 38 39 44 40 Finland 15 17 20 18 20 37 40 48 49 52 France 29 29 28 27 32 22 22 19 22 27 Germany 10 9 9 6 10 6 5 6 8 8 Greece 56 58 54 57 50 58 58 59 60 58 Hungary 47 45 50 48 48 44 35 44 32 17 Iceland 31 26 29 25 24 52 44 45 35 44 India 32 35 40 44 44 18 21 27 21 16 Indonesia 37 42 39 37 42 32 32 33 39 36 Ireland 24 20 17 15 16 28 37 26 19 12 Israel 17 19 19 24 21 36 36 24 29 30 Italy 42 40 44 46 38 38 39 50 53 41 Japan 26 27 24 21 27 27 24 25 25 29 Jordan 53 49 56 53 52 55 54 56 57 59 Kazakhstan 36 32 34 32 34 35 28 29 27 31 Korea Rep. 22 22 22 26 25 25 27 20 20 15 Latvia - - 41 35 43 - - 46 42 53 Lithuania 45 36 31 34 28 53 46 43 31 35 Luxembourg 11 12 13 11 6 9 6 5 4 5 Malaysia 16 14 15 12 14 7 10 7 9 6 Mexico 38 37 32 41 39 16 14 14 18 19 Mongolia - - - - 57 - - - - 55 Netherlands 14 11 14 14 15 19 8 17 15 25 New Zealand 21 24 25 20 17 33 41 40 34 37 Norway 13 8 6 10 7 26 16 12 26 24 Peru 43 44 43 50 54 20 26 32 46 50 Philippines 41 43 38 42 41 29 42 31 37 34 Poland 34 34 33 36 33 31 30 36 36 33 Portugal 40 41 46 43 36 50 53 54 54 45 Qatar 8 10 10 19 13 2 2 2 2 2 Romania 50 53 55 47 47 49 52 47 33 47 Russia 49 48 42 38 45 42 45 34 41 43 Singapore 3 4 5 3 3 5 9 13 6 3 Slovak Republic 48 47 47 45 46 57 55 52 55 54 Slovenia 51 51 52 55 49 43 43 51 52 42 South Africa 52 50 53 52 53 54 57 57 56 49 Spain 35 39 45 39 37 47 51 53 51 39 Sweden 4 5 4 5 9 11 17 18 16 20 Switzerland 5 3 2 2 4 15 7 10 10 14 Taiwan 6 7 11 13 11 8 13 16 14 11 Thailand 27 30 27 29 30 10 15 9 12 13 Turkey 39 38 37 40 40 46 34 41 45 38 UAE 28 16 8 8 12 21 11 4 3 7 Ukraine 57 56 49 49 60 45 48 30 48 60 United Kingdom 20 18 18 16 19 14 19 15 11 18 USA 1 2 1 1 1 1 1 1 1 1 Venezuela 59 59 60 60 61 59 59 60 59 61

OVERALL Economic Performance

5Highlights of the 2015 ranking

A general analysis of the 2015 ranking shows that top countries are going back to the basics, said Professor Arturo Bris, Director of the IMD World Competitiveness Center. Productivity and efficiency are in the drivers seat of the competitiveness wagon. Companies in those countries are increasing their efforts to minimize their environmental impact and provide a strong organizational structure for workforces to thrive.

The USA remains at the top of the ranking as a result of its strong business efficiency and financial sector, its innovation drive and the effectiveness of its infrastructure. Hong Kong (2) and Singapore (3) move up overtaking Switzerland, which drops to fourth place. Canada (5), Norway (7), Denmark (8), Sweden (9) and Germany (10) remain in the top 10. Luxembourg moves to the top (6) from 11th place in 2014.

Results for Asia are mixed. Malaysia (12 to 14), Japan (21 to 27), Thailand (29 to 30) and Indonesia (37 to 42) move down. Taiwan (13 to 11), Republic of Korea (26 to 25) and the Philippines (42 to 41) slightly rise in the ranking. Most Asian economies in decline have seen a drop in their domestic economies and are impacted by weakening/aging infrastructure.

Overall Ranking & Competitiveness Factors

Eastern Europe experiences a mixture of results as well. Poland (36 to 33), the Czech Republic (33 to 29) and Slovenia (55 to 49) move up in the ranking. In the Baltic States, Estonia (30 to 31) and Latvia (35 to 43) rank lower than last year; although, Lithuania gains in the ranking (34 to 28). Elsewhere in the region, current events in Russia (38 to 45) and Ukraine (49 to 60) highlight the negative impact that armed conflict and the accompanying higher market volatility have on competitiveness in an increasingly interconnected international economy.

A pattern of decline is observed in Latin America. Chile moves from 31 to 35, Peru from 50 to 54, Argentina from 58 to 59 and Venezuela remains at the bottom of the table. Colombia stays at 51.

Among large emerging economies, Brazil (54 to 56) and South Africa (52 to 53) slightly drop, China (23 to 22) and Mexico (41 to 39) experience improvements while India remains at the same spot (44). This trend shows the difficulty in grouping emerging markets in one category, as the issues impacting their competitiveness differ. Chinas slight increase stems from improvements in education and public expenditure, whereas Brazil suffers from a drop in domestic economy and less optimistic executive opinions.

The USA continues to top the ranking; Asia experiences mixed results; and large emerging economies mostly linger

6Resources Size, population Natural endowments Infrastructure Technology Government efficiency Financial resources etc.

Competencies Education Social cohesion Corporate culture Motivation Attitudes Value systems etc.

6

Competitiveness analyses how nations and enterprises manage the totality of their competencies to achieve long-term prosperity

WHAT IS COMPETITIVENESS?What is Competitiveness ?

Competitiveness analyzes how nations and enterprises manage the totality of their competences and resources to achieve long-term prosperity

7How do we Measure Competitiveness ?The overall ranking, The IMD World Competitiveness Scoreboard, is divided into four Factors (Economic Performance, Government Efficiency, Business Eff iciency and Infrastructure). In turn, each of these factors is divided into 5 sub-factors which highlight every facet of the areas analyzed. Altogether there are 20 such sub-factors. These 20 sub-

factors comprise more than 340 criteria. Each sub-factor does not have the same number of criteria (for example it takes more criteria to assess education than to evaluate prices). Criteria can be hard data, which analyze competitiveness as it can be measured or soft data, which analyze competiveness as it can be perceived.

Economic Performance

GovernmentEfficiency

BusinessEfficiency

Infrastructure

Domestic Economy International Trade International Investment Employment Prices

Public Finance Fiscal Policy Institutional Framework Business Legislation Societal Framework

Productivity Labor Market Finance Management Practices Attitudes and Values

Basic Technological Scientific Health & Environment Education

OVERALLRANKING

2/3s Statistics

Competitiveness that can be measured!

The emphasis on HARD FACTS

ensures objectivity and transparency

342 Criteria 20 Sub-Factors 4 Factors Overall Ranking

1/3 Survey

Competitiveness as it is perceived!

Over 6,200 respondents

8Hard data are drawn from international, national and regional organizations such as the World Bank, OECD, UN, ILO, WTO, ITU, UNESCO and our network of Partner Institutes.

15

Competitiveness that can be measured!

The emphasis on HARD FACTS ensures

objectivity and transparency

2/3 HARD DATA: 220 CRITERIA

1 USA 193.362 China Mainland 105.513 Russia 79.264 Hong Kong 76.645 Brazil 64.05

12 Mexico 35.1918 Chile 20.2620 Colombia 16.7728 Peru 10.1731 Argentina 9.0832 Venezuela 8.37

Direct investment flows inward ($bn) (2013)

US$ billions

16

Competitiveness as it is perceived!

Over 4,300 respondentsto the WCC

Executive Opinion Survey

Survey opinion data are drawn from our annual Executive Opinion Survey, a 116-point questionnaire sent to top and middle-level executives worldwide.

The results are shown on a scale from 0 10, with the highest value implying a very positive perception, the lowest value the most negative.

1/3 SURVEY DATA: 118 CRITERIA

1 Ireland 8.752 Israel 8.093 Philippines 8.074 UAE 8.04

11 Brazil 7.33

15 Argentina 7.0822 Venezuela 6.7729 Peru 6.5538 Mexico 6.2152 Chile 5.5955 Colombia 5.36

Flexibility and adaptability (2014)Flexibility and adaptability of people are high when faced with new

challenges

s u r v e y

2/3 Hard Data:224 Criteria

1/3 Survey Data:118 Criteria

Competitiveness as it can be measured ! Competiveness as it can be perceived !

The Emphasis on HARD FACTS ensures objectivity

and transparency

Over 6,200 respondents to our Executive Opinion Survey

118

9Selected Criteria

Thank you for having completed the Executive Opinion Survey. Your invaluable input will allow us to compile a range of statistics that we use to analyze the competitiveness of 62 economies.

In total we produce 118 criteria that make up 1/3 of our total ranking. In the following pages we reproduce just 9 of these.

10

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Survey [0..10]

1 QATAR 7.44

2 UAE 7.03

3 POLAND 6.77

4 IRELAND 6.73

5 LITHUANIA 6.60

6 SLOVAK REPUBLIC 6.50

7 CANADA 6.49

8 CHILE 6.47

9 CHINA HONG KONG 6.45

10 GERMANY 6.41

11 JAPAN 6.40

12 DENMARK 6.11

13 CZECH REPUBLIC 6.08

14 LUXEMBOURG 6.03

15 PHILIPPINES 5.98

16 ESTONIA 5.94

17 MALAYSIA 5.85

18 JORDAN 5.75

19 SPAIN 5.68

20 TAIWAN 5.65

21 FINLAND 5.64

22 LATVIA 5.59

23 ITALY 5.57

24 BULGARIA 5.56

25 ROMANIA 5.52

26 SWEDEN 5.50

27 SINGAPORE 5.49

28 ISRAEL 5.40

29 USA 5.31

30 NETHERLANDS 5.16

31 BELGIUM 5.16

32 AUSTRALIA 5.11

33 FRANCE 5.08

34 PERU 5.08

35 UNITED KINGDOM 5.07

36 PORTUGAL 5.02

37 CHINA MAINLAND 4.98

38 MEXICO 4.93

39 NORWAY 4.92

40 THAILAND 4.82

41 SLOVENIA 4.74

42 INDONESIA 4.71

43 AUSTRIA 4.70

44 GREECE 4.60

45 HUNGARY 4.58

46 INDIA 4.49

47 KAZAKHSTAN 4.31

48 KOREA REP. 4.22

49 COLOMBIA 4.18

50 SOUTH AFRICA 3.96

51 RUSSIA 3.91

52 NEW ZEALAND 3.57

53 BRAZIL 3.38

54 CROATIA 3.35

55 ICELAND 3.28

56 TURKEY 3.10

57 MONGOLIA 2.24

58 SWITZERLAND 2.10

59 UKRAINE 1.97

60 ARGENTINA 1.82

61 VENEZUELA 0.59

hinder the competitiveness of

enterprises

support the

competitiveness of

enterprises

Ranking

International Trade 1.2.26

EXCHANGE RATES

2015Exchange rates


Survey [0..10]

1 SWITZERLAND 7.11

2 GERMANY 6.92

3 TAIWAN 6.75

4 POLAND 6.62

5 PHILIPPINES 6.58

6 USA 6.56

7 ISRAEL 6.55

8 UAE 6.48

9 QATAR 6.34

10 MALAYSIA 6.28

11 LUXEMBOURG 6.26


13 DENMARK 6.13

14 NORWAY 6.12

15 INDIA 6.11

16 ESTONIA 6.03

17 SWEDEN 5.91

18 SINGAPORE 5.88

19 CANADA 5.87


21 NEW ZEALAND 5.57

22 NETHERLANDS 5.48

23 AUSTRIA 5.48


25 JORDAN 5.37

26 THAILAND 5.35

27 AUSTRALIA 5.34

28 INDONESIA 5.24

29 JAPAN 5.20

30 CHILE 5.19

31 LITHUANIA 5.07

32 COLOMBIA 5.03

33 MEXICO 5.01

34 KAZAKHSTAN 4.90

35 PERU 4.88

36 BELGIUM 4.84

37 TURKEY 4.53

38 IRELAND 4.49

39 KOREA REP. 4.48

40 ICELAND 4.41

41 ROMANIA 4.39


43 ARGENTINA 4.36

44 BRAZIL 4.30

45 FRANCE 4.11

46 LATVIA 4.07

47 ITALY 4.00



50 PORTUGAL 3.89

51 FINLAND 3.89

52 SLOVENIA 3.67

53 HUNGARY 3.61

54 SPAIN 3.45

55 RUSSIA 3.23

56 MONGOLIA 3.20

57 UKRAINE 3.00

58 BULGARIA 2.76

59 GREECE 2.60

60 VENEZUELA 2.20

61 CROATIA 2.03

weak strong

Ranking

Domestic Economy - Growth 1.1.19

RESILIENCE OF THE ECONOMY

2015Resilience of the economy to economic cycles is


Survey [0..10]

1 USA 8.09

2 GERMANY 7.62

3 KOREA REP. 6.87

4 MALAYSIA 6.85

5 UAE 6.83

6 TAIWAN 6.72

7 AUSTRIA 6.71

8 JAPAN 6.60

9 SWITZERLAND 6.56

10 ISRAEL 6.55


12 LITHUANIA 6.40

13 NETHERLANDS 6.32

14 SWEDEN 6.25

15 DENMARK 6.22

16 SINGAPORE 6.19


18 INDIA 6.00

19 POLAND 5.98

20 IRELAND 5.95

21 ITALY 5.91

22 FRANCE 5.76

23 MEXICO 5.70

24 BELGIUM 5.61

25 THAILAND 5.56

26 INDONESIA 5.48

27 JORDAN 5.39

28 CANADA 5.38

29 PORTUGAL 5.24


31 SLOVENIA 5.10

32 QATAR 5.09


34 ROMANIA 4.90

35 TURKEY 4.86


37 PHILIPPINES 4.64

38 COLOMBIA 4.62

39 KAZAKHSTAN 4.59

40 BRAZIL 4.57

41 SPAIN 4.53

42 LUXEMBOURG 4.52

43 CHILE 4.37

44 LATVIA 4.34

45 AUSTRALIA 4.34

46 FINLAND 4.22

47 HUNGARY 4.20

48 ESTONIA 3.88


50 PERU 3.88

51 NEW ZEALAND 3.86

52 UKRAINE 3.72

53 ICELAND 3.66

54 NORWAY 3.61

55 MONGOLIA 3.55

56 ARGENTINA 3.36

57 BULGARIA 3.32

58 CROATIA 3.00

59 GREECE 2.99

60 RUSSIA 2.90

61 VENEZUELA 0.93

is limited is extensive

Ranking

Domestic Economy - Size 1.1.13

DIVERSIFICATION OF THE ECONOMY 2015Diversification of the economy (industries, export markets, etc.)

11


Survey [0..10]

1 JAPAN 8.19

2 MONGOLIA 7.98

3 DENMARK 7.85

4 USA 7.72

5 NORWAY 7.72

6 MALAYSIA 7.70


8 SWITZERLAND 7.66

9 SINGAPORE 7.64

10 IRELAND 7.51

11 GERMANY 7.51

12 LUXEMBOURG 7.48

13 KOREA REP. 7.43

14 ROMANIA 7.42

15 NETHERLANDS 7.41

16 CANADA 7.38

17 NEW ZEALAND 7.36

18 AUSTRALIA 7.34

19 ICELAND 7.21

20 ISRAEL 7.19


22 THAILAND 7.02

23 ESTONIA 7.01

24 SWEDEN 7.01

25 BELGIUM 7.00

26 FINLAND 6.99

27 LITHUANIA 6.97

28 LATVIA 6.97

29 UAE 6.96

30 QATAR 6.84


32 INDONESIA 6.80


34 AUSTRIA 6.72

35 PHILIPPINES 6.69

36 KAZAKHSTAN 6.59

37 INDIA 6.51

38 TAIWAN 6.46

39 BRAZIL 6.42

40 TURKEY 6.37


42 FRANCE 6.33

43 CHILE 6.27

44 UKRAINE 6.06

45 VENEZUELA 6.00

46 MEXICO 5.98

47 GREECE 5.77

48 SLOVENIA 5.71

49 PORTUGAL 5.70

50 ITALY 5.63

51 ARGENTINA 5.57

52 JORDAN 5.44

53 RUSSIA 5.41

54 COLOMBIA 5.38

55 BULGARIA 5.37

56 PERU 5.31

57 HUNGARY 5.18


59 SPAIN 4.95

60 CROATIA 4.90

61 POLAND 4.56

is not a priority in companies is a priority in companies

Ranking

Labor Market - Availability of Skills 3.2.20

ATTRACTING AND RETAINING TALENTS 2015Attracting and retaining talents


Survey [0..10]

1 NORWAY 9.50

2 NEW ZEALAND 9.43

3 CANADA 9.40

4 DENMARK 9.37

5 SWITZERLAND 9.16

6 LUXEMBOURG 8.95

7 SINGAPORE 8.63

8 NETHERLANDS 8.63

9 GERMANY 8.53

10 USA 8.30

11 FINLAND 8.24

12 QATAR 8.16

13 AUSTRIA 8.14

14 UAE 7.84

15 IRELAND 7.51

16 JAPAN 7.50

17 SWEDEN 7.49



20 INDIA 7.21

21 FRANCE 7.13

22 AUSTRALIA 6.95

23 PORTUGAL 6.95

24 POLAND 6.91


26 BELGIUM 6.50

27 CHILE 6.47

28 TAIWAN 6.43

29 LITHUANIA 6.37

30 MALAYSIA 6.37


32 ESTONIA 6.21

33 KAZAKHSTAN 6.04


35 JORDAN 5.57

36 LATVIA 5.24

37 ISRAEL 5.15

38 SPAIN 5.04

39 PHILIPPINES 4.95

40 CROATIA 4.85

41 ITALY 4.83

42 MEXICO 4.76

43 KOREA REP. 4.72

44 ICELAND 4.72

45 PERU 4.68

46 SLOVENIA 4.62

47 HUNGARY 4.55

48 RUSSIA 4.46

49 COLOMBIA 4.10


51 INDONESIA 4.07

52 TURKEY 3.84

53 ROMANIA 3.77

54 BRAZIL 3.28

55 THAILAND 3.06

56 BULGARIA 2.92

57 ARGENTINA 2.64

58 MONGOLIA 2.45

59 GREECE 2.03

60 VENEZUELA 0.80

61 UKRAINE 0.48

high low

Ranking

Societal Framework 2.5.04

RISK OF POLITICAL INSTABILITY

2015The risk of political instability is very


Survey [0..10]


2 ESTONIA 8.65

3 SINGAPORE 8.64

4 NEW ZEALAND 8.44

5 KAZAKHSTAN 8.00

6 CANADA 7.90

7 UAE 7.64

8 LITHUANIA 7.63

9 MALAYSIA 7.56

10 SWITZERLAND 7.41

11 LUXEMBOURG 7.38

12 DENMARK 7.38

13 SWEDEN 7.33

14 IRELAND 7.27

15 PORTUGAL 7.20

16 NORWAY 7.19

17 BULGARIA 7.12

18 NETHERLANDS 7.11

19 FINLAND 7.03


21 AUSTRALIA 6.90

22 CHILE 6.88

23 ISRAEL 6.84

24 QATAR 6.72

25 USA 6.71

26 ICELAND 6.57

27 TURKEY 6.45

28 THAILAND 6.23

29 TAIWAN 6.23

30 HUNGARY 6.20

31 JAPAN 6.09

32 JORDAN 6.05

33 LATVIA 5.93


35 GERMANY 5.78

36 RUSSIA 5.39


38 MONGOLIA 5.27

39 CROATIA 5.26

40 INDONESIA 5.25

41 BELGIUM 5.17

42 COLOMBIA 5.10

43 INDIA 5.06

44 MEXICO 4.93

45 KOREA REP. 4.92

46 PHILIPPINES 4.60

47 UKRAINE 4.52

48 PERU 4.44

49 AUSTRIA 4.41

50 ROMANIA 4.39

51 SLOVENIA 4.12


53 GREECE 4.03

54 FRANCE 4.00

55 POLAND 3.96

56 SPAIN 3.75


58 ITALY 2.91

59 ARGENTINA 2.74

60 BRAZIL 1.98

61 VENEZUELA 1.85

hindered by legislation supported by legislation

Ranking

Business Legislation - Competition and Regulations 2.4.14

CREATION OF FIRMS

2015Creation of firms is

12


Survey [0..10]

1 NORWAY 8.27

2 SWITZERLAND 7.56

3 FINLAND 6.83

4 SWEDEN 6.82

4 USA 6.82

6 DENMARK 6.78

7 UAE 6.58

8 CANADA 6.56

9 LUXEMBOURG 6.48

10 NETHERLANDS 6.40

11 GERMANY 6.30


13 CHILE 6.21


15 INDONESIA 5.93

16 ISRAEL 5.91

17 AUSTRALIA 5.75

18 SINGAPORE 5.73

19 MALAYSIA 5.71

20 ROMANIA 5.61

21 ICELAND 5.57

22 QATAR 5.48

23 IRELAND 5.27

24 BELGIUM 5.23

25 TURKEY 4.98

26 JORDAN 4.94


28 THAILAND 4.88

29 INDIA 4.87

30 ARGENTINA 4.77

31 FRANCE 4.57

32 MEXICO 4.55

33 ITALY 4.53

34 JAPAN 4.49

35 AUSTRIA 4.43

36 BRAZIL 4.33

37 LATVIA 4.28

38 PERU 4.19

39 NEW ZEALAND 4.14

40 MONGOLIA 4.07


42 COLOMBIA 3.98

43 POLAND 3.98

44 KOREA REP. 3.98

45 PHILIPPINES 3.69

46 PORTUGAL 3.67

47 SPAIN 3.57

48 KAZAKHSTAN 3.49

49 GREECE 3.42

50 TAIWAN 3.38


52 SLOVENIA 3.20

53 LITHUANIA 3.03

54 RUSSIA 3.03

55 ESTONIA 3.00


57 UKRAINE 2.39

58 CROATIA 2.09

59 BULGARIA 1.76

60 HUNGARY 1.71

61 VENEZUELA 1.71


BRAIN DRAIN

2015Brain drain (well-educated and skilled people)

hinders competitiveness in your

economy

does not hinder

competitiveness in your

economy

Ranking


Survey [0..10]

1 SWITZERLAND 8.91

2 LUXEMBOURG 8.49

3 USA 8.31

4 UAE 8.26

5 SINGAPORE 8.12


7 CANADA 7.70

8 QATAR 7.51

9 AUSTRALIA 7.48


10 NEW ZEALAND 7.43

12 IRELAND 7.22

13 MALAYSIA 7.05

14 NETHERLANDS 6.85

15 CHILE 6.81

16 NORWAY 6.65

17 KAZAKHSTAN 6.60


19 GERMANY 6.26

20 INDONESIA 6.14

21 THAILAND 5.86

22 PERU 5.78

23 MEXICO 5.63

24 BELGIUM 5.57

25 PHILIPPINES 5.56

26 SWEDEN 5.47

27 ISRAEL 5.45

28 AUSTRIA 5.39


30 RUSSIA 5.19

31 DENMARK 5.12

32 LITHUANIA 4.93

33 SPAIN 4.88

34 JORDAN 4.84

35 COLOMBIA 4.78

36 INDIA 4.73

37 KOREA REP. 4.70


39 FRANCE 4.60

40 ROMANIA 4.58

41 ESTONIA 4.57

42 POLAND 4.47

43 PORTUGAL 4.36

44 BRAZIL 4.19

45 TURKEY 4.16

46 LATVIA 4.14

47 TAIWAN 4.04

48 FINLAND 4.03

49 MONGOLIA 3.78

50 JAPAN 3.39

51 ITALY 3.37

52 ICELAND 3.30

53 HUNGARY 3.16


55 UKRAINE 2.85

56 GREECE 2.66

57 ARGENTINA 2.55

58 BULGARIA 2.44

59 SLOVENIA 2.15

60 CROATIA 2.00

61 VENEZUELA 0.83

are not attracted to your

country's business environment

are attracted to your

country's business

environment

Ranking


FOREIGN HIGH-SKILLED PEOPLE

2015Foreign high-skilled people


Survey [0..10]

1 NEW ZEALAND 8.71

2 UAE 8.68

3 IRELAND 8.59

4 CANADA 8.44

5 SINGAPORE 8.43

6 GERMANY 8.41


8 SWITZERLAND 8.29

9 NETHERLANDS 8.11

10 SWEDEN 8.05

11 QATAR 7.96

12 DENMARK 7.77


14 MALAYSIA 7.68

15 KOREA REP. 7.59

16 AUSTRIA 7.57

17 JAPAN 7.43

18 AUSTRALIA 7.33

19 TAIWAN 7.33

20 NORWAY 7.27

21 CHILE 7.25

22 FINLAND 7.20

23 USA 7.16

24 PERU 7.09

25 LUXEMBOURG 7.08

26 KAZAKHSTAN 6.93


28 ESTONIA 6.50

29 THAILAND 6.42


31 LITHUANIA 6.13

32 INDONESIA 6.07

33 INDIA 6.06

34 ICELAND 6.06

35 PHILIPPINES 6.00

36 JORDAN 5.90

37 BELGIUM 5.84

38 ISRAEL 5.57

39 LATVIA 5.45


41 SLOVENIA 5.33

42 ROMANIA 5.32

43 PORTUGAL 5.31

44 COLOMBIA 5.16

45 MONGOLIA 5.07

46 SPAIN 4.92

47 MEXICO 4.82

48 POLAND 4.74

49 UKRAINE 4.15

50 CROATIA 4.15

51 FRANCE 4.13

52 ITALY 3.97

53 BRAZIL 3.96

54 TURKEY 3.88

55 BULGARIA 3.49

56 HUNGARY 3.19


58 RUSSIA 2.94

59 GREECE 2.17

60 ARGENTINA 2.05

61 VENEZUELA 0.70

Attitudes and Values 3.5.02

IMAGE ABROAD OR BRANDING

2015The image abroad of your country

discourages business

development

encourages business

development

Ranking

13

Purchase

As a member of our Panel of Experts you have the opportunity to purchase the 2016 IMD World Competitiveness Package

(Yearbook, CD and 12-months online access) at the

SPECIAL PRICE of 400 chf(instead of standard price of 800 chf)

For more information on this please contactIMD World Competitiveness Center

[email protected]

14

The IMD World Competitiveness Newsletter, The Criterion of the Month, is written by Professor Arturo Bris, Director of the IMD World Competitiveness Center or Dr. Jos Caballero, Research Fellow. It includes information drawn from the IMD World Competitiveness Yearbook.

As a respondent to our Executive Opinion Survey you will now receive this newsletter, but you are able to unsubscribe at any time.

On the following pages we reproduce three recent examples.

Criterion of the Month

15

January 2015Brain drain, is it beneficial?

At first glance, it seems obvious that brain drain is a significant cost to emerging economies. However, some academic observers (e.g., Mountford, 1997; Beine, Docquier and Rapoport, 2001) have argued that brain drain is beneficial. They posit that the possibility of migration encourages investment in education because of the potential high returns abroad from educated migrants. Arguably, brain drain can thus eventually increase income equality in the country of origin.

Our unique competitiveness data, however, enlighten this picture. In some countries there seems to be a correlation between their position in the overall competitiveness ranking and their ranks in the brain drain indicator. The USA ranks 1st in the overall ranking and 4th in brain drain, Switzerland 2nd and Germany 6th in both rankings. In the mid rankings, Australia reaches the 17th spot and the 18th respectively. Elsewhere, South Africa ranks 52nd in the competitiveness ranking and 51st in brain drain.

It is necessary to consider that any given criterion does not function in a vacuum. There are several other variables that impact outcomes. For example, attracting highly skilled foreign labour may compensate for the decline of home-grown human capital.

The data thus suggests that one of the greatest challenges that countries face to maintain or advance their competitiveness levels is to ensure a flowing and sustainable human capital accumulation. The challenge is not only to invest and develop local talent but also to provide opportunities for that talent to realize its full potential and to continuously improve the set of skills available. In addition, the data shows that, ultimately, countries that accumulate their home-grown human capital with a balanced intake of overseas talent are able to achieve higher levels of competitiveness. In this sense, brain drain seems to deprive countries of the necessary human capital which would enable them to safeguard their competitiveness.

With our best regards,

Prof Arturo Bris Director of the IMD World Competitiveness Center Professor of Finance

Dr Jos Caballero Research Fellow IMD World Competitiveness Center


Survey [0..10]

1 NORWAY 8.092 SWITZERLAND 7.783 FINLAND 7.764 USA 7.285 DENMARK 7.286 GERMANY 6.877 SWEDEN 6.788 UAE 6.659 NETHERLANDS 6.5410 MALAYSIA 6.5111 UKRAINE 6.3412 UNITED KINGDOM 6.2713 IRELAND 5.9614 CHINA HONG KONG 5.9515 CANADA 5.8916 LUXEMBOURG 5.8117 ISRAEL 5.7418 AUSTRALIA 5.7319 SINGAPORE 5.7020 BELGIUM 5.6721 CHILE 5.5822 INDIA 5.5423 TURKEY 5.4124 QATAR 5.2925 INDONESIA 5.2626 THAILAND 5.2327 FRANCE 5.2028 ICELAND 5.1529 AUSTRIA 4.9830 ARGENTINA 4.9731 CZECH REPUBLIC 4.8532 JAPAN 4.7633 BRAZIL 4.6134 JORDAN 4.5835 LATVIA 4.5536 PERU 4.5337 POLAND 4.3938 GREECE 4.3439 MEXICO 4.2940 COLOMBIA 4.2441 SPAIN 4.1142 KAZAKHSTAN 4.0043 ITALY 3.9044 PHILIPPINES 3.8245 CHINA MAINLAND 3.7946 KOREA REP. 3.7447 NEW ZEALAND 3.7048 ESTONIA 3.6849 PORTUGAL 3.4750 TAIWAN 3.4151 SOUTH AFRICA 3.3952 SLOVENIA 3.1753 SLOVAK REPUBLIC 3.0954 LITHUANIA 2.9855 RUSSIA 2.8256 ROMANIA 2.7657 CROATIA 2.2858 VENEZUELA 2.1959 HUNGARY 2.0860 BULGARIA 1.35

BRAIN DRAIN



economy

does not hinder


economy

Ranking


Survey [0..10]

1 NORWAY 8.272 SWITZERLAND 7.563 FINLAND 6.834 SWEDEN 6.824 USA 6.826 DENMARK 6.787 UAE 6.588 CANADA 6.569 LUXEMBOURG 6.4810 NETHERLANDS 6.4011 GERMANY 6.3012 CHINA HONG KONG 6.2913 CHILE 6.2114 UNITED KINGDOM 5.9815 INDONESIA 5.9316 ISRAEL 5.9117 AUSTRALIA 5.7518 SINGAPORE 5.7319 MALAYSIA 5.7120 ROMANIA 5.6121 ICELAND 5.5722 QATAR 5.4823 IRELAND 5.2724 BELGIUM 5.2325 TURKEY 4.9826 JORDAN 4.9427 CZECH REPUBLIC 4.8828 THAILAND 4.8829 INDIA 4.8730 ARGENTINA 4.7731 FRANCE 4.5732 MEXICO 4.5533 ITALY 4.5334 JAPAN 4.4935 AUSTRIA 4.4336 BRAZIL 4.3337 LATVIA 4.2838 PERU 4.1939 NEW ZEALAND 4.1440 MONGOLIA 4.0741 CHINA MAINLAND 4.0742 COLOMBIA 3.9843 POLAND 3.9844 KOREA REP. 3.9845 PHILIPPINES 3.6946 PORTUGAL 3.6747 SPAIN 3.5748 KAZAKHSTAN 3.4949 GREECE 3.4250 TAIWAN 3.3851 SLOVAK REPUBLIC 3.2552 SLOVENIA 3.2053 LITHUANIA 3.0354 RUSSIA 3.0355 ESTONIA 3.0056 SOUTH AFRICA 2.5357 UKRAINE 2.3958 CROATIA 2.0959 BULGARIA 1.7660 HUNGARY 1.7161 VENEZUELA 1.71

BRAIN DRAIN




economy

does not hinder


economy

Ranking


16

February 2015How will currency fluctuations impact competitiveness?

The latest currency fluctuation wave in Europe will indeed impact several competitiveness criteria. In terms of the World Competitiveness Yearbook hard statistics, such an impact will be felt in the long-term. Changes in exchange rates will resonate, for example, in indicators such as stock prices and export sales for 2016 (if not later).

Currency stability, however, is fundamental for the degree of confidence that economic actors have in a particular economy. In this sense, there are competitiveness indicators that will display the impact of fluctuations more substantially in the short-term. We expect therefore that data gathered through our 2015 Executive Opinion Survey will exhibit such an impact. For example, we largely expect survey participants residing in directly affected countries to conceive of exchange rates as a hindrance for the competitiveness of enterprises. In addition, opinions about the resilience of those economies to withstand economic cycles could become unfavourable.

The image abroad or branding of some countries may be affected negatively, which could eventually impact business development in those economies. Respondents may take an adverse stand in regards to the government. For example this could affect their impressions about the adaptability of government policy to changes in the economy, the effectiveness of the implementation of government decision and, in some cases, the likelihood of an increased risk of political instability.

Perceptions about credit availability and the financing of companies could also suffer. It could be the case that respondents find that credit is not easily available for businesses and that the levels of financing to companies are inadequate. In addition, opinions about the banking and financial services could shift. Respondents may perceive a decline in the support that these institutions provide to businesses. Undoubtedly, assessments of risk factors in the financial system will be affected as well as the relationship between the cost of capital and business development. Capital markets (foreign and domestic) could be found as inaccessible. At the same time, survey respondents may find that the investment environment in their respective countries lacks attractiveness for foreign investors.

To sustain competitiveness it is fundamental for countries to maintain the levels of confidence that their institutions enjoy which in turn depends on the perceptions of market agents. In this sense, our Executive Opinion Survey is an accurate tool to gauge and capture market sentiments about current economic events. Be ready then for a reality check, we compile the 2015 survey results by the end of May.





Survey [0..10]

1 QATAR 7.442 UAE 7.033 POLAND 6.774 IRELAND 6.735 LITHUANIA 6.606 SLOVAK REPUBLIC 6.507 CANADA 6.498 CHILE 6.479 CHINA HONG KONG 6.4510 GERMANY 6.4111 JAPAN 6.4012 DENMARK 6.1113 CZECH REPUBLIC 6.0814 LUXEMBOURG 6.0315 PHILIPPINES 5.9816 ESTONIA 5.9417 MALAYSIA 5.8518 JORDAN 5.7519 SPAIN 5.6820 TAIWAN 5.6521 FINLAND 5.6422 LATVIA 5.5923 ITALY 5.5724 BULGARIA 5.5625 ROMANIA 5.5226 SWEDEN 5.5027 SINGAPORE 5.4928 ISRAEL 5.4029 USA 5.3130 NETHERLANDS 5.1631 BELGIUM 5.1632 AUSTRALIA 5.1133 FRANCE 5.0834 PERU 5.0835 UNITED KINGDOM 5.0736 PORTUGAL 5.0237 CHINA MAINLAND 4.9838 MEXICO 4.9339 NORWAY 4.9240 THAILAND 4.8241 SLOVENIA 4.7442 INDONESIA 4.7143 AUSTRIA 4.7044 GREECE 4.6045 HUNGARY 4.5846 INDIA 4.4947 KAZAKHSTAN 4.3148 KOREA REP. 4.2249 COLOMBIA 4.1850 SOUTH AFRICA 3.9651 RUSSIA 3.9152 NEW ZEALAND 3.5753 BRAZIL 3.3854 CROATIA 3.3555 ICELAND 3.2856 TURKEY 3.1057 MONGOLIA 2.2458 SWITZERLAND 2.1059 UKRAINE 1.9760 ARGENTINA 1.8261 VENEZUELA 0.59

EXCHANGE RATES

2015Exchange rates


enterprises

support the

competitiveness of

enterprises

Ranking



Survey [0..10]

1 LITHUANIA 7.312 QATAR 7.173 POLAND 7.024 ESTONIA 6.955 UAE 6.886 MALAYSIA 6.887 CHINA HONG KONG 6.558 CHILE 6.519 BULGARIA 6.4310 JAPAN 6.3911 MEXICO 6.3812 USA 6.3513 SLOVAK REPUBLIC 6.3014 GERMANY 6.2815 PERU 6.1216 JORDAN 6.1017 DENMARK 5.9718 THAILAND 5.9319 CZECH REPUBLIC 5.8220 INDONESIA 5.7821 AUSTRIA 5.6322 PHILIPPINES 5.6023 TAIWAN 5.5824 IRELAND 5.5425 CANADA 5.5226 LATVIA 5.5227 SINGAPORE 5.3428 UNITED KINGDOM 5.3329 SLOVENIA 5.3130 NETHERLANDS 5.1931 LUXEMBOURG 5.0732 SWEDEN 4.9333 NORWAY 4.8034 KAZAKHSTAN 4.7835 CHINA MAINLAND 4.7036 SOUTH AFRICA 4.6037 KOREA REP. 4.4938 INDIA 4.4639 COLOMBIA 4.4640 TURKEY 4.4341 RUSSIA 4.4242 BELGIUM 4.4143 HUNGARY 4.0444 ISRAEL 4.0045 AUSTRALIA 3.9846 FRANCE 3.9747 GREECE 3.9248 SPAIN 3.8949 CROATIA 3.8350 SWITZERLAND 3.7551 NEW ZEALAND 3.7052 FINLAND 3.6953 BRAZIL 3.6454 PORTUGAL 3.6155 ITALY 3.5756 ROMANIA 3.5257 ICELAND 3.3358 UKRAINE 3.2359 ARGENTINA 2.6760 VENEZUELA 0.23

EXCHANGE RATES

2014Exchange rates


enterprises

support the

competitiveness of

enterprises

Ranking


June 2015Company agility and competitiveness

Our recently published 2015 World Competitiveness Ranking reiterated the fundamental role of business efficiency in driving country competitiveness: nine out of the top 10 countries from the overall ranking achieved a top-10 position in the business efficiency factor. By business efficiency we mean the extent to which the national environment encourages enterprises to perform in an innovative, profitable and responsible manner. Essential to business efficiency is company agility: the ability of companies to adapt to changes through the adoption of proactive practices and behaviors that lead to sustainable value creation.

We consider agility an outcome of business competitiveness and we assess it in terms of several firm-level dimensions: governance, managerial, functional, sustainability, talent development and digital factors. Governance refers to practices, processes and structures necessary for the effective governing of the firm (e.g., effective strategic role of the board). The managerial aspect includes practices and processes that allow for the well-functioning of management, for example, ability of management to adapt the firm's strategy to market changes. The functional emphasizes the firm's operational processes (e.g., marketing strategies). In regard to sustainability, talent development and digital aspects, they focus on processes that enable firms to ensure the effectiveness of its governance, managerial and functional factors; for example, practices that enable firms to remain dynamic vis--vis its competitors (e.g., level of digitization) and the ability of firms to build an organizational culture that fosters collaboration among its members.

There are country and industry-level aspects to business competitiveness which includes the countrys economic performance, overall productivity (by sectors), its regulatory framework and the quality of its infrastructure, among others. To put it shortly, business competitiveness, and thus agility, results from a combination of particular firm capabilities and country and industry level factors.

The advantage of employing such analytical framework is that it enables us to map competitiveness through our newly developed assessment instrument: the Sustainable Value Creation Compass. The Compass identifies different strategic paths toward greater competitiveness by revealing the prevailing competitiveness strengths and highlighting areas in need of strengthening. The compass can be customized at the country and/or company level.

Readers were also invited to participate in our Business Competitiveness Survey, the results of which will be shared in our next Criterion of the Month (September 2015).

You will find more information about the Compass and related products such as competitiveness programs in the following link:

http://www.imd.org/wcc/wcc-world-competitiveness-programs/




17

June 2015Company agility and competitiveness

Our recently published 2015 World Competitiveness Ranking reiterated the fundamental role of business efficiency in driving country competitiveness: nine out of the top 10 countries from the overall ranking achieved a top-10 position in the business efficiency factor. By business efficiency we mean the extent to which the national environment encourages enterprises to perform in an innovative, profitable and responsible manner. Essential to business efficiency is company agility: the ability of companies to adapt to changes through the adoption of proactive practices and behaviors that lead to sustainable value creation.

We consider agility an outcome of business competitiveness and we assess it in terms of several firm-level dimensions: governance, managerial, functional, sustainability, talent development and digital factors. Governance refers to practices, processes and structures necessary for the effective governing of the firm (e.g., effective strategic role of the board). The managerial aspect includes practices and processes that allow for the well-functioning of management, for example, ability of management to adapt the firm's strategy to market changes. The functional emphasizes the firm's operational processes (e.g., marketing strategies). In regard to sustainability, talent development and digital aspects, they focus on processes that enable firms to ensure the effectiveness of its governance, managerial and functional factors; for example, practices that enable firms to remain dynamic vis--vis its competitors (e.g., level of digitization) and the ability of firms to build an organizational culture that fosters collaboration among its members.

There are country and industry-level aspects to business competitiveness which includes the countrys economic performance, overall productivity (by sectors), its regulatory framework and the quality of its infrastructure, among others. To put it shortly, business competitiveness, and thus agility, results from a combination of particular firm capabilities and country and industry level factors.

The advantage of employing such analytical framework is that it enables us to map competitiveness through our newly developed assessment instrument: the Sustainable Value Creation Compass. The Compass identifies different strategic paths toward greater competitiveness by revealing the prevailing competitiveness strengths and highlighting areas in need of strengthening. The compass can be customized at the country and/or company level.

Readers were also invited to participate in our Business Competitiveness Survey, the results of which will be shared in our next Criterion of the Month (September 2015).

You will find more information about the Compass and related products such as competitiveness programs in the following link:

http://www.imd.org/wcc/wcc-world-competitiveness-programs/




Environment criteria Employment criteria

Sustainability criteriaTalent dynamics

criteria

Environmental regulation Green technology solutions

Governmental educationpolicies

Health and safety

Development practices Workforce job satisfaction

Sustainability practices Sustainability processes

Cou

ntry

Lev

elC

ompa

ny L

evel

IMD 2007 - 2015

Sustainable Value Creation Compassa Hypothetical Example

18

Country Profiles

Here we provide a one-page summary of the most important statistics on each country in the IMD World Competitiveness Yearbook.

On the left hand column you will find the 2015 Overall Ranking, and some Basic Facts. Then we have the Key Challenges in 2015 decided by our Partner Institute in the country. Finally we show the Overall Ranking and Factors 2011-2015, (which are combined to make the overall ranking).

On the Right hand column we have the latest sub-factor rankings presented as the Competitiveness Landscape 2014 followed by the Key Attractiveness Indicators 2014 as decided by you, our Panel of Experts.

Argentina 20Australia 21Austria 22Belgium 23Brazil 24Bulgaria 25Canada 26Chile 27China Hong Kong 28China Mainland 29Colombia 30Croatia 31Czech Republic 32Denmark 33Estonia 34Finland 35France 36Germany 37Greece 38Hungary 39Iceland 40India 41Indonesia 42Ireland 43Israel 44Italy 45Japan 46Jordan 47Kazakhstan 48Korea 49Latvia 50

Lithunia 51Luxembourg 52Malaysia 53Mexico 54Mongolia 55Netherlands 56New Zealand 57Norway 58Peru 59Philippines 60Poland 61Portugal 62Qatar 63Romania 64Russia 65Singapore 66Slovak Republic 67Slovenia 68South Africa 69Spain 70Sweden 71Switzerland 72Taiwan 73Thailand 74Turkey 75UAE 76Ukraine 77United Kingdom 78USA 79Venezuela 80

Overall Economic Performance Government Efficiency Business Efficiency Infrastructure

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An Exclusive Report Specially Prepared for our Panel of Experts

February 2016 Copyright 2016 by IMD: Institute for Management Development, Lausanne, Switzerland

For further information, please contact the IMD World Competitiveness Center at: IMD 23, Ch. de Bellerive P.O. Box 915 CH-1001 Lausanne Switzerland

Tel : +41 21 618 02 51 Fax : +41 21 618 02 04 e-mail : [email protected] Internet: www.imd.org/wcc eShop: www.wcceshop.com

IMD, IMD INTERNATIONAL REAL WORLD. REAL LEARNING, IMD BUSINESS SCHOOL and IMD WORLD COMPETITIVENESS YEARBOOK are trademarks of IMD- International Institute for Management Development

PrefaceThe 2015 IMD World Competitiveness ScoreboardOverall Ranking & Competitiveness FactorsHighlights of the 2015 rankingWhat is Competitiveness ?How do we Measure Competitiveness ?Selected CriteriaPurchaseCriterion of the MonthCountry ProfilesArgentinaAustraliaAustriaBelgiumBrazilBulgariaCanadaChileChina Hong KongChina MainlandColombiaCroatiaCzech RepublicDenmarkEstoniaFinlandFranceGermanyGreeceHungaryIcelandIndiaIndonesiaIrelandIsraelItalyJapanJordanKazakhstanKoreaLatviaLithuniaLuxembourgMalaysiaMexicoMongoliaNetherlandsNew ZealandNorwayPeruPhilippinesPolandPortugalQatarRomaniaRussiaSingaporeSlovak RepublicSloveniaSouth AfricaSpainSwedenSwitzerlandTaiwanThailandTurkeyUAEUkraineUnited KingdomUSAVenezuela

imd executive_summary imd competitiveness

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