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The world’s best and worst economies

Hydrocarbon Engineering,


The World Economic Forum (WEF) Global Competitiveness Report defines competitiveness as the ‘institutions, policies, and factors that determine the level of productivity of a country’.

According to Margareta Drzeniek-Hanouz, lead economist of the WEF’s Global Competitiveness and Benchmarking Network, ‘competitiveness is not so much about competing in the global marketplace, but rather about the factors, politicians, institutions, that countries put into place to raise productivity and thereby grow’.

In order to assess competitiveness, the WEF divided the 148 nations it surveyed into one of three classifications, depending in their development.

‘Factor driven’ economies are the least developed and rely in low skilled labour and natural resources. More developed countries are ‘efficiency driven’ because they focus on improving economic output through increasing production efficiency. The most developed economies, which rely on innovation and technological changes to drive growth, are considered ‘innovation driven’ economies. Nations may also fall in between these classifications.

Innovations and sophistication accounted for 30% of the score for nations such as the US, which is an innovation driven economy, but just 5% of the final score for less developed nations such as Haiti, a factor driven economy.

To create the Global Competitiveness Index (GCI) score for each country, the WEF then ranked more than 100 economic indicators that it grouped into 12 broad categories. These categories (pillars) were then scored from 1 to 7, with each given a different weighting in the final country rank depending on which classification the nation fell under.

While gross domestic product (GDP) is not a measure of well being or competitiveness by itself, competitive nations often have high GDP per capita. This is due to the fact that the factors that allow nations to compete for new business are the same factors that drive productivity and output.

Hence, each of the 10 most competitive nations is among the 25 highest for GDP per capita out of the countries measured.

Many of the world’s most competitive nations also have the ability to borrow a great deal to support their spending and investment, which can result in high government debt. Seven of the 10 most competitive nations had at least 50% of GDP in gross general government debt as of 2012.

In poorer nations, where access to financing is often not the only issue for businesses but for governments as well, debt levels are usually lower. Just one of the 10 least competitive countries had more than 50% of its GDP in debt.

For more on this report, see ‘Top 10 most economically competitive countries’.

Adapted from a press release by Emma McAleavey.

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/11092013/world%E2%80%99s_best_economies_639/

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