Assessing Barbadian Assessing Barbadian competitivenesscompetitivenessFindings from the Global Competitiveness Index 2009-2010

Margareta Drzeniek Hanouz Director, Senior Economist Global Competitiveness Network World Economic Forum

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Outline

The Global Competitiveness Network and the Global Competitiveness Report (GCR) series.

The Global Competitiveness Index (GCI) and our data sources.

The GCI rankings for 2009-2010 with a focus on CARICOM economies’ performance and selected comparators.

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The Global Competitiveness Network

Flagship product: The Global Competitiveness Report: launched in 1979 covering 16 countries; it has since expanded its coverage to 133 countries.

Editor: Professor Klaus Schwab.

Goal: to provide a benchmarking tool for policymakers and business leaders.

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The Global Competitiveness Report 2009-2010Geographical coverage

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The Global Competitiveness NetworkThematic coverage

Regional, topical and industry report series:

The Travel and Tourism Competitiveness Report

The Global Information Technology Report

The Global Enabling Trade Report

The Lisbon Review

The Mexico Competitiveness Report 2009

The Brazil Competitiveness Report 2009

The Africa Competitiveness Report 2009

The Global Gender Gap Report

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The Global Competitiveness IndexData sources

Use of hard data (publicly available information from sources such as the International Monetary Fund, the World Bank, UNESCO, International Telecommunications Union, among others).

And survey data (from the Executive Opinion Survey), which records the perspectives of business leaders around the world; survey data is indispensable, particularly for variables where no reliable hard data sources exist.

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The Global Competitiveness IndexData sources: The Executive Opinion Survey

The Executive Opinion Survey is structured around eleven major issue areas, each of significant relevance to the current state of an economy’s business environment,

Survey respondents are asked a total of 144 questions based on their own experiences of operating a business in the country in which they are based.

The Survey is translated into over 20 languages and is available online.

In 2009, over 13,000 business leaders from 133 countries responded to the Survey.

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The Global Competitiveness ReportWhat are we trying to measure?

Source: International Monetary Fund, World Economic Outlook, September 2009

Gross domestic product based on purchasing-power-parity per capita, 1980-2009

0.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

14,000.00

16,000.00

18,000.00

20,000.00

Barbados Jamaica Suriname Guyana

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Competitiveness is defined as the set of factors, policies and institutions that determine the level of productivity of a country.

Productivity is the main driver of investment in an economy. Investment, in turn, determines the rate of growth of the economy.

We say that a more competitive economy is one that is likely to grow faster over the medium to long run.

We try to shed light on “the factors, policies and institutions” that determine the sharply different growth experiences of 134 economies worldwide.

The Global Competitiveness ReportWhat do we mean by competitiveness?

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The Global Competitiveness IndexThe 12 pillars of competitiveness

Key for

efficiency-driven economies

Key for

factor-driven economies

1. Institutions

2. Infrastructure

3. Macroeconomic stability

4. Health and primary education

5. Higher education and training

6. Goods market efficiency

7. Labor market efficiency

8. Financial market sophistication

9. Technological Readiness

10. Market size

11. Business sophistication

12. Innovation

Key for

innovation-driven economies

BASIC REQUIREMENTS

EFFICIENCY ENHANCERS

INNOVATION & SOPHISTICATION FACTORS

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The process of economic development evolves in three stages captured by the model:

a. "Factor-driven stage"Firms compete in prices, taking advantage of cheap factors.

b. "Efficiency-driven stage"Efficient production practices to increase productivity.

c. "Innovation-driven stage"Economies need to produce innovative products using sophisticated production methods (incorporating and taking full advantage of ICT, among other things.)

The Global Competitiveness IndexStages of development

12* Based on GDP per capita and resource intensity

The Global Competitiveness Index CARICOM countries by stage of development*

CARICOM countries/comparators Other countries in this stage

Stage 1 (factor-driven) GDP per capita of less than US$2,000 Transition from 1 to 2 GDP per capita of US$2,000-US$3,000 Stage 2 (efficiency-driven) GDP per capita of US$3,000-US$9,000 Transition from 2 to 3 GDP per capita of US$9,000-US$17,000 Stage 3 (innovation-driven) GDP per capita more than US$17,000

GuyanaIndia, Madagascar, Honduras, Nigeria, Pakistan, Philippines

Jamaica

Algeria, Egypt, Guatemala, Paraguay, Saudi Arabia, Venezuela

Trinidad and Tobago, Cyprus, Ireland, Malta

Hong Kong SAR, Iceland, Israel, Taiwan, China, United States

Suriname, Costa Rica, Dominican Republic, Panama, Mauritius

Argentina, Brazil, Peru, South Africa, Thailand

BarbadosChile, Croatia, Mexico, Russian Federation, Turkey, Uruguay

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The Global Competitiveness Index Weights

Weights of the three main groups of pillars at each stage of development

Factor-driven stage

Efficiency-driven stage

Innovation-driven stage

Basic requirements 60% 40% 20%

Efficiency enhancers 35% 50% 50%

Innovation and sophistication factors 5% 10% 30%

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The Global Competitiveness Rankings 2009-2010Top 20 and selected economies (rank out of 133, score from 1 to 7)

2009 2009 2008 2009 2009 2008 rank Economy score rank rank Economy score rank

1 Switzerland 5.60 2 22 Qatar 4.95 26

2 United States 5.59 1 26 Iceland 4.80 20

3 Singapore 5.55 5 29 China 4.74 30

4 Sweden 5.51 4 30 Chile 4.70 28

5 Denmark 5.46 3 31 Czech Republic 4.67 33

6 Finland 5.43 6 33 Spain 4.59 29

7 Germany 5.37 7 36 Thailand 4.56 34

8 Japan 5.37 9 40 Tunisia 4.50 36

9 Canada 5.33 10 45 South Africa 4.34 45

10 Netherlands 5.32 8 49 India 4.30 50

11 Hong Kong SAR 5.22 11 54 Indonesia 4.26 55

12 Taiwan, China 5.20 17 56 Brazil 4.23 64

13 United Kingdom 5.19 12 60 Mexico 4.19 60

14 Norway 5.17 15 61 Turkey 4.16 63

15 Australia 5.15 18 63 Russian Federation 4.15 51

16 France 5.13 16 70 Egypt 4.04 81

17 Austria 5.13 14 82 Ukraine 3.95 72

18 Belgium 5.09 19 99 Nigeria 3.65 94

19 Korea, Rep. 5.00 13 113 Venezuela 3.48 105

20 New Zealand 4.98 24 132 Zimbabwe 2.77 133

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The Global Competitiveness Rankings 2009-2010CARICOM countries and selected comparators (rank out of 133, score from 1 to 7)

2009 rank Economy 2009 score 2008 rank21 Luxembourg 4.96 2522 Qatar 4.95 2625 Ireland 4.84 2226 Iceland 4.80 2030 Chile 4.70 2834 Cyprus 4.57 4035 Estonia 4.56 3237 Slovenia 4.55 4238 Bahrain 4.54 3742 Puerto Rico 4.48 4144 Barbados 4.35 4752 Malta 4.30 5255 Costa Rica 4.25 5957 Mauritius 4.22 5759 Panama 4.21 5865 Uruguay 4.10 7586 Trinidad and Tobago 3.91 9291 Jamaica 3.81 8695 Dominican Republic 3.75 98102 Suriname 3.57 103104 Guyana 3.56 115

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The Global Competitiveness Rankings CARICOM countries: Evolution in the GCI, 2007-2009(rank out of 133)

126115

104

113

103

102

84

9286

7886

91

5047

44

1 21 41 61 81 101 121

Guyana

Suriname

Trinidad and Tobago

Jamaica

Barbados

2007 2008 2009

+ 22

+ 11

- 13

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The Global Competitiveness Rankings 2009-2010Most problematic factors for doing business in the region

14.1

11.9

10.9

10.8

8.6

8.3

7.1

5.9

5.1

4.4

4.4

3.9

3.2

0.8

0.6

0 5 10 15 20 25 30

Inefficient government bureaucracy

Poor work ethic in national labor force

Crime and theft

Access to financing

Corruption

Inflation

Tax rates

Inadequately educated workforce

Inadequate supply of infrastructure

Foreign currency regulations

Tax regulations

Restrictive labor regulations

Policy instability

Poor public health

Government instability/coups

Percent of responses

Source: EOS 2008, 2009. The question asked to the firm was: “Select among the above 15 constraints the five most problematic factors for doing business in your country.”

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The Global Competitiveness Rankings 2009-2010Barbados vs. selected comparators(score from 1 to 7)

1

2

3

4

5

6

7Institutions

Infrastructure

Macroeconomic stability

Health and primary education

Higher education and training

Goods market efficiency

Labor market efficiency

Financial market sophistication

Technological readiness

Market size

Business sophistication

Innovation

Barbados Latin American and the Carribean Transition from 2 to 3

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The Global Competitiveness Rankings 2009-2010Barbados: Areas of focus(score from 1 to 7)

Rank Score2009-2010 (out of 133 economies) 44 4.352008-2009 (out of 134 economies) 47 4.40

Basic Requirements 31 5.161st pillar: Institutions 20 5.182nd pillar: Infrastructure 21 5.373rd pillar: Macroeconomic stability 115 3.804th pillar: Health & primary education 9 6.28

Efficiency Enhancers 60 4.115th pillar: Higher education & training 26 4.916th pillar: Goods market efficiency 72 4.127th pillar: Labour market efficiency 48 4.588th pillar: Financial market sophistication 38 4.679th pillar: Technological readiness 41 4.4410th pillar: Market size 126 1.92

I nnovation Factors 49 3.8111th pillar: Business sophistication 58 4.2012th pillar: Innovation 47 3.43

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The Global Competitiveness Rankings Barbados: Comparison by pillar, 2007 and 2009(score from 1 to 7)

1

2

3

4

5

6

7Institutions

Infrastructure

Macroeconomic stability

Health and primary education

Higher education and training

Goods market efficiency

Labor market efficiency

Financial market sophistication

Technological readiness

Market size

Business sophistication

Innovation

2007 2009

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The Global Competitiveness Rankings 2009-2010Most problematic factors for doing business in Barbados

Source: EOS 2008, 2009. The question asked to the firm was: “Select among the above 15 constraints the five most problematic factors for doing business in your country.”

17.7

14.8

13.9

10.7

8.8

7.8

7.3

4.1

3.7

3.5

3.4

3.3

0.6

0.5

0.0

0 5 10 15 20 25 30

Poor work ethic in national labor force

Access to financing

Inefficient government bureaucracy

Restrictive labor regulations

Inflation

Tax rates

Foreign currency regulations

Inadequate supply of infrastructure

Crime and theft

Tax regulations

Inadequately educated workforce

Policy instability

Poor public health

Corruption

Government instability/coups

Percent of responses

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THANK YOU FOR YOUR KIND ATTENTION

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http://gcr.weforum.org/gcr/

The Global Competitiveness Report 2009-2010 is freely downloadable from our website at http://www.weforum.org/gcr