sociology

Insight Report

Klaus Schwab, World Economic Forum

The Global Competitiveness Report 2018

Insight Report

The Global Competitiveness Report 2018

Professor Klaus Schwab

World Economic Forum

Editor

TERMS OF USE AND DISCLAIMER

The analysis presented in the Global Competitiveness Report 2018 (herein: “Report”) is based on a methodology integrating the latest statistics from international organizations and a survey of executives. The methodology, developed in collaboration with leading experts and practitioners through a three year consultative process, is designed to support countries to identify relevant policies and practices. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the World Economic Forum.

The Report presents information and data that were compiled and/or collected by the World Economic Forum (all information and data referred herein as “Data”). Data in this Report is subject to change without notice. The terms country and nation as used in this Report do not in all cases refer to a territorial entity that is a state as understood by international law and practice. The terms cover well-defined, geographically self-contained economic areas that may not be states but for which statistical data are maintained on a separate and independent basis.

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ISBN-13: 978-92-95044-76-0

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The Global Competitiveness Report 2018 | iii

Preface v by Klaus Schwab

Summary of Key Findings vii

At a Glance: The Global Competitiveness Index 4.0 2018 Rankings xi

Introduction: A New Economic Compass for the Fourth Industrial Revolution 1

Chapter 1: Global Findings 5

Chapter 2: Regional and Country Analysis 23

Chapter 3: Benchmarking Competitiveness in the Fourth Industrial Revolution: 37 Introducing the Global Competitiveness Index 4.0

Economy Profiles 49 How to Read the Economy Profiles 51 Index of Economy Profiles 53 Economy Profiles 55

Appendix A: Global Competitiveness Index 4.0 2018 Pillar Rankings 615

Appendix B: The Executive Opinion Survey: 623 The Voice of the Business Community

Appendix C: Global Competitiveness Index 4.0 Methodology and Technical Notes 631

Contributors and Acknowledgements 649

Partner Institutes 651

Contents

The Global Competitiveness Report 2018 | v

With the Fourth Industrial Revolution (4IR), humanity has entered a new phase. The 4IR has become the lived reality for millions of people around the world, and is creating new opportunities for business, government and individuals. Yet it also threatens a new divergence and polarization within and between economies and societies. This year also marks the tenth anniversary of the beginning of the global financial crisis, which has had social and economic consequences of a magnitude unprecedented in recent generations. Combined with a background of growing inequality and geopolitical flashpoints, this has fuelled citizens’ concerns about globalization and polarized the political debate. Although global economic growth has been robust over the past two years, it remains fragile in this changing economic and political context.

These developments—the 4IR and the consequences of the Great Recession—are redefining the pathways to prosperity and, indeed, the very notion of prosperity, with profound implications for policy-making. Concerned leaders are grappling for answers and solutions, aiming to go beyond short-term, reactionary measures.

In this context, the World Economic Forum is introducing the new Global Competitiveness Index 4.0, a much-needed economic compass, building on 40 years of experience in benchmarking the drivers of long- term competitiveness. After having conceptualized the Fourth Industrial Revolution, the World Economic Forum is contributing to global thinking and policy-making by integrating the notion of the 4IR into the definition of competitiveness.

The index integrates well-established aspects with new and emerging levers that drive productivity and growth. It emphasizes the role of human capital, innovation, resilience and agility, as not only drivers but also defining features of economic success in the 4IR. It calls for better use of technology for economic leapfrogging—but also cautions that this is only possible as part of a holistic approach with other factors of competitiveness. Finally, it offers objective, data-driven analysis for dispassionate, future-oriented, and rational policy-making.

The results of the GCI 4.0 reveal the sobering conclusion that most economies are far from the competitiveness “frontier”—the aggregate ideal across all factors of competitiveness. In fact, the global average score of 60 suggests that many economies have yet to implement the measures that would enhance their long- term growth and resilience and broaden opportunities for their populations. In addition, we find that countries have a mixed performance across the twelve pillars of the index and that long-standing developmental issues—such as the lack of well-functioning institutions— continue to be a source of friction for competitiveness. Yet there are bright spots—in the form of economies that outperform their peers and present valuable case studies for learning more about methods to implement the factors of competitiveness.

At the World Economic Forum’s Centre for the New Economy and Society, the new home of the Global Competitiveness Report, we provide a platform for leaders to understand and anticipate emerging economic and social trends, and to adapt policies and practices to our rapidly evolving context. This report is complemented by a range of other benchmarking tools as well as frontier insights on the emerging contours of the new economy and society. Importantly, the Centre also aims to serve as an accelerator for newly emerging solutions, experiments and pilots led by the public and private sectors in areas such as designing new industrial policy, closing skills gap, developing new standards for business, and preparing for the future of work. This combination allows policy-makers, business and other stakeholders to combine insight and action into accelerating change, and we invite leaders to engage with our platform.

I want to express my gratitude to the core project team involved in the production of this report: Thierry Geiger, Roberto Crotti, Sophie Brown and Jean François Trinh Tan. Additional thanks for the specific contributions of Silja Baller, Attilio di Battista, Ciara Porawski, and our former colleague Margareta Drzeniek Hanouz, and the strategic guidance of Saadia Zahidi. My deep gratitude goes to Professor Xavier Sala-i-Martin for his guidance over the last 15 years, and to the more than 100 experts,

Preface KLAUS SCHWAB

Founder and Executive Chairman, World Economic Forum

vi | The Global Competitiveness Report 2018

Preface

practitioners and governments who were consulted during the GCI 4.0 creation process. Finally, we thank the 160 Partner Institutes, which help administer the Executive Opinion Survey, the results of which provide invaluable data for the GCI 4.0 and other benchmarks.

The Global Competitiveness Report is designed to help policy-makers, business leaders and other stakeholders around the world shape their economic strategies in the era of the Fourth Industrial Revolution. We hope it will also serve as a call to action to engage in the long-term, holistic, agile and far-sighted leadership required to build the competitive economies of the future, lift living standards and provide opportunities for all members of society.

The Global Competitiveness Report 2018 | vii

In the midst of rapid technological change, political polarization and a fragile economic recovery, it is critical that we define, assess and implement new pathways to growth and prosperity. With productivity the most important determinant of long-term growth and income, the new Global Competitiveness Index 4.0 featured in this report sheds light on a newly emerging set of factors critical for productivity in the Fourth Industrial Revolution (4IR) and provides a tool for assessing them. The key findings below summarize the new tool as well as its results as revealed by global, regional and country level analysis.

A NEW TOOL FOR UNDERSTANDING AND ASSESSING COMPETITIVENESS

New concepts. With the inclusion of new concepts and extensive new data gathering efforts, the GCI 4.0 provides novel and more nuanced insights on the factors that will grow in significance as the 4IR gathers pace: human capital, innovation, resilience and agility. These qualities are captured through a number of new, critically important concepts (e.g. entrepreneurial culture, companies embracing disruptive ideas, multistakeholder collaboration, critical thinking, meritocracy, social trust) complementing more traditional components (e.g. ICT and physical infrastructure, macroeconomic stability, property rights, years of schooling).

New benchmarks. The GCI 4.0 introduces a new progress score ranging from 0 to 100. The frontier (100) corresponds to the goal post for each indicator and typically represents a policy target. Each country should aim to maximize its score on each indicator, and the score indicates its current progress against the frontier as well as its remaining distance. This approach emphasizes that competitiveness is not a not a zero-sum game between countries—it is achievable for all countries.

Twelve pillars of competitiveness. There are a total of 98 indicators in the index, derived from a combination of data from international organizations as well as from the World Economic Forum’s Executive Opinion Survey. These are organized into 12 pillars in the GCI 4.0, reflecting the extent and complexity of the drivers of productivity and the competitiveness ecosystem. These are: Institutions; Infrastructure; ICT adoption; Macroeconomic stability; Health; Skills; Product market; Labour market; Financial system; Market size; Business dynamism; and Innovation capability.

A level playing field for all economies. For the second half of the 20th century, the pathway to development seemed relatively clear: lower-income economies would be expected to develop through progressive industrialization by leveraging low-skilled labour. In the context of the 4IR the sequence has become less clear, particularly as the cost of technology and capital are lower than ever but their successful use relies on a number of other factors. The GCI 4.0 reflects this growing complexity of policy prioritization by weighting pillars equally rather than according to a country’s current stage of development. In essence, the index offers each economy a level playing field to define its path to growth. While sequencing is dependent on the priority of each economy, the index contends that economies need to be holistic in their approach to competitiveness rather than focusing on a particular factor alone. A strong performance in one pillar cannot make up for a weak performance in another. For instance, investing in technology without investing in digital skills will not yield meaningful productivity gains. In order to increase competitiveness, no area can be neglected.

Summary of Key Findings

Summary of Key Findings

viii | The Global Competitiveness Report 2018

REGIONAL AND COUNTRY RESULTS

Top ten economies. The United States is the closest economy to the frontier, the ideal state, where a country would obtain the perfect score on every component of the index. With a competitiveness score of 85.6, it is 14 points away from the frontier mark of 100, implying that even the top-ranked economy among the 140 has room for improvement. It is followed by Singapore (83.5) and Germany (82.8). Switzerland (82.6) comes in at 4th place, followed by Japan (82.5), Netherlands (82.4), Hong Kong SAR (82.3). The United Kingdom (82.0), Sweden (81.7) and Denmark (80.6) round out the top ten.

Regional highlights. Globally, the median score is 60.0. Between the US (85.6, 1st) and Chad (35.5, 140th) there is a wide range of performance across regions and countries. Europe and North America are, combined, home to seven of the 10 most competitive economies. East Asia and the Pacific region, home to the other three top ten economies, achieves the highest median score (72.6) among all regions, ahead of Europe and North America (70.8). At the other end of the spectrum, 17 of the 34 sub-Saharan African economies studied are among the bottom 20 globally, and the region’s median is a low 45.2, less than halfway to the frontier. While regional averages are helpful for global comparisons, there are vast disparities within regions, implying that economies are not necessarily hampered by geography in their quest for competitiveness. The existence of pockets of over- or under-performance within each region suggests the need for proactive policies and leadership. For example, in Europe, there are four very distinct groups of countries with very different competitiveness levels and, within the EU, Germany’s overall competitiveness score (82.8, 3rd) is 20 points higher than Greece (62.1, 57th). In Latin America, Chile’s score (70.3, 33rd) is nearly twice that of Haiti (36.5, 138th). Mauritius (63.7, 49th), Sub-Saharan Africa’s best performer, is nearly 30 points and over 91 places ahead of Chad. In South-East Asia, Singapore (2nd, 83.5) is 34 points closer to the frontier than Lao PDR (49.3, 112th). In some cases, the score differential between two neighbouring countries is large; there are approximately 20 points between the Dominican Republic (57.4) and Haiti (36.5), between Colombia (61.6) and Venezuela (43.2), and between Thailand (67.5) and Cambodia (50.2).

A mixed performance across the G20 and the BRICS. Within the G20, almost 30 points and 80 ranks separate the United States (85.6, 1st) from Argentina (57.5, 81st), the best and worst performing economies of the group, respectively. Of the BRICS grouping of large emerging markets, China is the most competitive, ranking 28th and with a score of 72.6. It is followed by the Russian Federation, which is ranked 43rd. These are the only two in the top 50. Next is India, which ranks 58th, up five places from 2017: with a score of 62.0, it registers the largest gain of any country in the G20. India is followed by South Africa, which falls five places this year to 67th. Last is Brazil, which slips three places to 72nd place. Within the G20, on health, the clear leader is Japan, which ranks first with a perfect score of 100, while South Africa is 127th with a score of 43.2. Differences on the Financial system pillar are small—there are fewer than 20 points between Canada (86.1, 11th) and Italy (64.3, 49th)

—but the same cannot be said when it comes to the Macroeconomic stability pillar. While 11 of the 19 members obtain a score above 90 on this pillar, the context in Turkey (67.3, 116th), Brazil (64.6, 122nd) and Argentina (44.9, 136th) remains volatile. The Republic of Korea is the world’s champion in terms of broad- based ICT adoption, with a near perfect score of 91.3 on this pillar. By contrast, India is among the weakest performers, with a score of 28.0 (117th), despite its vibrant IT sector. There is also a physical infrastructure gap among G20 economies (about 30 points between Japan and Indonesia, the best and worst performers, respectively). There are stark contrasts in terms of innovation capabilities, too. While Germany (87.5), the US (86.5), Japan (79.3), the United Kingdom (79.2) and Korea (79.2) are beacons of innovation, other G20 countries are significantly lower. China’s innovation score (64.4) is similar to Italy’s (65.8), not too far from Australia’s (69.8), and more than 10 points above India’s (53.8) and Russia’s (50.7).

Summary of Key Findings

The Global Competitiveness Report 2018 | ix

GLOBAL TRENDS AND IMPLICATIONS

All economies must invest in broader measures of competitiveness today to sustain growth and income in the future. The results demonstrate a strong correlation between competitiveness and income level. For instance, high-income economies make up the entire top 20 and only three non-high-income economies feature in the top 40: Malaysia (25th), China (28th), and Thailand (38th). However, some economies are over-performers and others under-performers when it comes to putting in place the building blocks of competitiveness at their current level of income. Economies that under- perform in competitiveness given their current income level may have difficulty sustaining that level without improving their competitiveness. Most of these outlying countries are mineral resource-rich—for example, Qatar, Brunei Darussalam, Kuwait, Trinidad and Tobago, and Venezuela. Despite having a similar level of income as Chile, Venezuela’s GCI score is nearly 30 points lower. Countries who want sustained growth and rising income levels must invest beyond their current areas of strength.

Enhancing the fundamentals of competitiveness today will improve resilience to shocks. Building economic resilience through competitiveness is more important than ever in today’s volatile context, with a wide range of vulnerabilities, technological change, geopolitical tensions and potential flash points around the world. The results reveal that countries that optimize their performance on the factors included in the GCI 4.0 are also more resilient to various shocks. Likewise, more competitive countries are also better equipped to address the challenges of the 4IR.

While openness is good for growth governments must support those who lose out to globalization. At a time of escalating trade tensions and backlash against globalization, the report reveals the importance of openness for competitiveness: more open economies are more innovative and their markets more competitive. However, while openness has been a ‘win-win’ between countries it is at times a ‘win-lose’ within countries. Attempting to address inequality by reversing globalization is counterproductive for sustained economic growth. Policies should, therefore, focus on improving the conditions of those specifically impacted by globalization rather than favouring protectionism. Combining GCI data with other sources suggests that redistributive policies, safety nets, investments in human capital, and more progressive taxation could help reduce inequality without compromising a country’s level of competitiveness. Additionally, the definition of openness must look to concepts beyond trade, freedom of people’s movement and ideas exchange. Using such a definition, we find that Singapore, Germany, Netherlands,

Sweden, Finland and the United States are some of the most open countries in the world, while the Islamic Republic of Iran and Ethiopia are among the least open. Brazil and India also emerge as relatively “closed”.

Technology-based leapfrogging remains elusive. The promise of leveraging technology for economic leapfrogging remains largely unfulfilled. There are, at most, 4.5 billion smartphones in use in the world and more than half of humanity has never gone online. While the promise of ICTs for productivity is high—and although ICTs can clearly be catalysts for other drivers of productivity, such as innovation and business dynamism—it would be misguided to rely on technology alone to solve all problems, in education, health, governance or transport infrastructure, for example. For many of the least competitive economies, the root causes of slow growth continue to be the ‘old’ developmental issues such as institutions, infrastructure and skills. For technology-based leapfrogging to offer a new path to development for low-income economies, these issues cannot be ignored.

Agility and future-readiness are key in a changing world. Amidst the transformations and disruptions brought about by the 4IR, adaptability and agility of all stakeholders—individuals, governments and businesses—will be key features in successful economies. These concepts are captured through several indicators in the GCI 4.0. The results show, for example, that Singapore’s government is the most ‘future-ready’ (85.6), followed by Luxembourg’s (79.0) and the United States’ (78.3). The United Arab Emirates (76.7) and four other Gulf countries appear in the top 10, which also features Malaysia (71.0, 9th). The governments of Brazil (24.9, 129th), Greece (19.4, 135th) and Venezuela (7.8, 140th and last) are perceived as among the least ‘future-ready’. The skillset of the population is another criterion of adaptability. With the right skills, workers can become the actors of the economic transformation rather than becoming victims of it. The results suggest that Sweden’s workforce is the most technology-savvy (80.6), while vocational training in Switzerland is by far the most advanced in the world (92.3). Switzerland is also the most effective with active labour market policies encouraging reskilling and retraining, while American companies are the most ready to embrace risk or disruptive business ideas (77.5).

Weak institutions continue to hamper competitiveness. Weak institutions—defined as including security, property rights, social capital, checks and balances, transparency and ethics, public-sector performance and corporate governance—continue to hinder competitiveness, development and well-being in many countries. The Institutions pillar is the second-lowest

Summary of Key Findings

scoring pillar of the 12 GCI pillars (after the Innovation capability pillar), with a median score of 53—just over halfway to the frontier. For 117 of the 140 economies studied, their Institutions pillar performance is a drag on their overall competitiveness score. Governments must pay attention to both traditional and emerging knowledge about strengthening the institutional environment as a factor of productivity. For example social capital—a broad concept that captures the quality of personal and social relationships, the strength of social norms and the level of civic participation in society—creates more cohesion within society and more trust among people, thus reducing transaction costs. Australia (66.2) and New Zealand (66.0) boast the highest levels of social capital, China (41.0, 125th) and Russia (43.9, 117th) have lower levels of social capital, and Burundi (35.2) and Yemen (37.8) place last.

A formula for innovation remains obscure for most economies. Once the preserve of the most advanced economies, innovation has become an imperative for all advanced economies and a priority for a growing number of emerging countries. And yet the vast majority of them are struggling to make innovation a meaningful engine of growth. The results show that there are only a few innovation powerhouses in the world, including Germany, the United States and Switzerland. The global median score on the Innovation capability pillar is 36, by far the lowest score across the 12 pillars. For 77 of the 140 economies studied, Innovation capability is the weakest pillar. In the vast majority of countries, innovation capacity remains extremely limited, very localized and/or restricted to very few sectors. In order to help countries crack the innovation conundrum, the GCI 4.0 sheds new light on the drivers of the innovation process, from idea generation to product commercialization. Many of these factors are intangible, often underpinned by cultural factors. For example, the index notably captures the attitude towards entrepreneurial risk. The results show that this attitude is most positive in Israel (83.1) and the United States (79.4), and tends to be more negative in most Asian societies, notably in Korea (47.5, 77th). As an important enabler of creativity, diversity is also captured in the index. Canada (81.5) has the most diverse workforce, ahead of Singapore and the United States. The right corporate culture can also promote creativity by empowering employees and encouraging them to create,

challenge and experiment. Corporate culture is the least hierarchical in Denmark (84.9), Sweden (83.8) and other Nordic countries, whereas the patriarchal society of several Asian economies translates into more hierarchical structures, for instance in Korea (51.0, 88th) and China (58.5, 50th).

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The financial system continues to be a source of weakness in some economies. The GCI 4.0 introduces a new measure of financial stability. Building on the learning from the global financial crisis, this composite indicator captures the sturdiness of the banking sector, using measures such as the soundness of banks, nonperforming loans, the difference between the credit supply and its trend, and banks’ regulatory capital ratio. According to this methodology, Finland, Hong Kong SAR, Switzerland, Luxembourg and Norway have the most stable financial markets (all scoring above 95), while India, China, Russia and Italy—all with a score of 84 or less—are among the G20 economies that present specific vulnerabilities in their financial systems. More specifically: India’s financial system stability (83.2) is mainly held back by relatively low performance on soundness of banks and regulatory capital ratios; China’s stability (80.1, 113th) is threatened by the rapid growth of private credit; Russia’s financial system stability (79.5) is somewhat limited by the relative fragility of its banks; and Italy’s performance (76.4) is mainly explained by high share of non-performing loans on 2016 banks’ balance sheets.

Achieving equality, sustainability and growth together is possible but needs proactive, far-sighted leadership. There is a worldwide consensus on the need for a more holistic model of economic progress that promotes higher living standards for all, respects planetary boundaries, and does not disadvantage future generations. The results suggest that there is no inherent trade-off between equality and growth: it is possible to be both pro-growth and ‘pro-equity’, as shown by the strong performance of several northern European countries in terms of both competitiveness and inclusion. The relationship between performance on the GCI 4.0 and on environmental measures is less conclusive. The most competitive economies have the largest ecological footprints, but they are the most efficient (their footprint per unit of GDP is the lowest). It is therefore incumbent upon leaders to set longer-term priorities and proactive efforts to create virtuous cycles between equality, sustainability and growth.

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The Global Competitiveness Index 4.0 2018 Rankings

2018 Diff. from 20172

Rank Economy Score1 Rank Score

1 United States 85.6 — +0.8

2 Singapore 83.5 — +0.5

3 Germany 82.8 — +0.2

4 Switzerland 82.6 — +0.2

5 Japan 82.5 +3 +0.9

6 Netherlands 82.4 –1 +0.2

7 Hong Kong SAR 82.3 — +0.3

8 United Kingdom 82.0 –2 –0.1

9 Sweden 81.7 — +0.1

10 Denmark 80.6 +1 +0.7

11 Finland 80.3 +1 +0.5

12 Canada 79.9 –2 –0.1

13 Taiwan, China 79.3 — +0.1

14 Australia 78.9 +1 +0.7

15 Korea, Rep. 78.8 +2 +0.8

16 Norway 78.2 –2 –0.8

17 France 78.0 +1 +0.6

18 New Zealand 77.5 –2 –0.6

19 Luxembourg 76.6 +3 +0.6

20 Israel 76.6 — +0.4

21 Belgium 76.6 –2 —

22 Austria 76.3 –1 +0.2

23 Ireland 75.7 — –0.3

24 Iceland 74.5 — –0.1

25 Malaysia 74.4 +1 +1.1

26 Spain 74.2 –1 +0.4

27 United Arab Emirates 73.4 — +1.1

28 China 72.6 — +0.9

29 Czech Republic 71.2 — +0.3

30 Qatar 71.0 +2 +0.6

31 Italy 70.8 — +0.3

32 Estonia 70.8 –2 —

33 Chile 70.3 +1 +0.9

34 Portugal 70.2 –1 +0.5

35 Slovenia 69.6 — +1.1

36 Malta 68.8 — +0.3

37 Poland 68.2 — +0.2

38 Thailand 67.5 +2 +1.3

39 Saudi Arabia 67.5 +2 +1.6

40 Lithuania 67.1 –2 +0.7

41 Slovak Republic 66.8 –2 +0.6

42 Latvia 66.2 — +1.4

43 Russian Federation 65.6 +2 +1.7

44 Cyprus 65.6 –1 +0.9

45 Indonesia 64.9 +2 +1.4

46 Mexico 64.6 –2 +0.5

47 Oman 64.4 +14 +3.4

2018 Diff. from 20172

Rank Economy Score1 Rank Score

48 Hungary 64.3 — +0.9

49 Mauritius 63.7 — +0.8

50 Bahrain 63.6 –4 –0.2

51 Bulgaria 63.6 — +1.2

52 Romania 63.5 — +1.3

53 Uruguay 62.7 –3 —

54 Kuwait 62.1 +2 +0.5

55 Costa Rica 62.1 –1 +0.4

56 Philippines 62.1 +12 +2.3

57 Greece 62.1 –4 +0.3

58 India 62.0 +5 +1.2

59 Kazakhstan 61.8 — +0.7

60 Colombia 61.6 –3 +0.1

61 Turkey 61.6 –3 +0.2

62 Brunei Darussalam 61.4 +2 +1

63 Peru 61.3 –3 +0.2

64 Panama 61.0 –9 –0.6

65 Serbia 60.9 +5 +1.7

66 Georgia 60.9 +1 +1.0

67 South Africa 60.8 –5 –0.1

68 Croatia 60.1 –2 —

69 Azerbaijan 60.0 –4 –0.2

70 Armenia 59.9 +2 +1.0

71 Montenegro 59.6 +2 +1.4

72 Brazil 59.5 –3 –0.2

73 Jordan 59.3 –2 +0.1

74 Seychelles 58.5 +10 +3.3

75 Morocco 58.5 +2 +0.8

76 Albania 58.1 +4 +0.8

77 Viet Nam 58.1 –3 +0.1

78 Trinidad and Tobago 57.9 –2 +0.1

79 Jamaica 57.9 –1 +0.5

80 Lebanon 57.7 –5 –0.1

81 Argentina 57.5 –2 +0.1

82 Dominican Republic 57.4 — +1.8

83 Ukraine 57.0 +6 +3.1

84 Macedonia, FYR 56.6 n/a n/a

85 Sri Lanka 56.0 –4 –0.4

86 Ecuador 55.8 –3 +0.4

87 Tunisia 55.6 –1 +1

88 Moldova 55.5 –1 +0.9

89 Iran, Islamic Rep. 54.9 –1 +0.4

90 Botswana 54.5 –5 –0.5

91 Bosnia and Herzegovina 54.2 –1 +0.3

92 Algeria 53.8 — +0.3

93 Kenya 53.7 — +0.4

94 Egypt 53.6 — +0.4

2018 Diff. from 20172

Rank Economy Score1 Rank Score

95 Paraguay 53.4 +1 +0.5

96 Guatemala 53.4 –5 –0.1

97 Kyrgyz Republic 53.0 +3 +1.1

98 El Salvador 52.8 — +0.4

99 Mongolia 52.7 –4 –0.2

100 Namibia 52.7 –1 +0.3

101 Honduras 52.5 +2 +1.2

102 Tajikistan 52.2 –5 –0.6

103 Bangladesh 52.1 –1 +0.7

104 Nicaragua 51.5 –3 —

105 Bolivia 51.4 n/a n/a

106 Ghana 51.3 –2 +1.4

107 Pakistan 51.1 –1 +1.3

108 Rwanda 50.9 –1 +1.3

109 Nepal 50.8 –1 +1.3

110 Cambodia 50.2 –1 +0.8

111 Cape Verde 50.2 –6 +0.4

112 Lao PDR 49.3 –2 +0.7

113 Senegal 49.0 –2 +0.6

114 Côte d’Ivoire 47.6 n/a n/a

115 Nigeria 47.5 –3 –0.5

116 Tanzania 47.2 –2 +0.8

117 Uganda 46.8 –4 –0.2

118 Zambia 46.1 –3 +0.6

119 Gambia, The 45.5 — +0.8

120 Eswatini 45.3 –4 +0.2

121 Cameroon 45.1 –3 +0.2

122 Ethiopia 44.5 –2 +0.6

123 Benin 44.4 –1 +0.8

124 Burkina Faso 43.9 n/a n/a

125 Mali 43.6 –4 –0.1

126 Guinea 43.2 –3 +0.3

127 Venezuela 43.2 –10 –1.9

128 Zimbabwe 42.6 –4 +0.6

129 Malawi 42.4 — +1.8

130 Lesotho 42.3 –4 +0.9

131 Mauritania 40.8 –3 +0.1

132 Liberia 40.5 –2 +0.6

133 Mozambique 39.8 –8 –2.1

134 Sierra Leone 38.8 –3 +0.1

135 Congo, Democratic Rep. 38.2 –8 –2.6

136 Burundi 37.5 –4 –1.0

137 Angola 37.1 n/a n/a

138 Haiti 36.5 –5 +0.7

139 Yemen 36.4 –4 +0.9

140 Chad 35.5 –6 —

Covering 140 economies, the Global Competitiveness Index 4.0 measures national competitiveness—defined as the set of institutions, policies and factors that determine the level of productivity.

Note: The Global Competitiveness index 4.0 captures the determinants of long-term growth. Recent developments are reflected only insofar as they have an impact on data measuring these determinants. Results should be interpreted in this context. 1 Scale ranges from 0 to 100. 2 Rank and score differences with 2017 index, calculated using the GCI 4.0 methodology. See Appendix C for details.

l East Asia and the Pacific

l Eurasia l Europe and North America

l Latin America and the Caribbean

l Middle East and North Africa

l South Asia l Sub-Saharan Africa

The Global Competitiveness Report 2018 | xi

The Global Competitiveness Report 2018 | 1

This year represents a milestone in the four-decade history of the Global Competitiveness Report series, with the introduction of the Global Competitiveness Index 4.0. Since 1979, when Klaus Schwab published the first edition, the series has been providing policy-makers and other stakeholders around the world with an annual assessment of the drivers of long-term growth.

At the heart of the competitiveness agenda is the recognition that economic growth is a core driver of human development. There is overwhelming evidence that growth has been the most effective way to lift people out of poverty and improve their quality of life. The importance and policy relevance of growth has been re-affirmed through the United Nations’ Sustainable Development Goals (SDGs). Goal 8 calls for “sustained, inclusive and sustainable economic growth” and sets an ambitious target of 7% growth for least-developed countries.1

After a lost decade, economic recovery is well underway, with the global economy projected to grow almost 4% in 2018 and 2019.2 But delivering growth is difficult even in the best of times, and today’s economic environment is increasingly uncertain, challenging and complex. Recovery remains vulnerable to a range of risks and potential shocks.

Many productivity-enhancing reforms announced in the wake of the crisis did not materialize or remain incomplete, while other reforms are in danger of being rolled back. The international governance system is in crisis and in dire need of reform. Globalization, a key driver of growth in the past 30 years, is facing a popular and political backlash. Recent tariff increases by the United States and retaliatory measures by trading partners have increased the risk of a trade war. Escalation in various other conflicts, crises and geopolitical tensions could also impact the global economy.

In addition, the Fourth Industrial Revolution (4IR) is disrupting economies and societies by redefining the way we work, live and interact with each other. The 4IR offers the potential to leapfrog stages of development— but it also makes the pathway to development less certain, notably for emerging economies betting on industrialization and the demographic dividend.

Major economic challenges need long-term solutions, but short-termism prevails in governments, administrations and corporations around the world. The new GCI 4.0 provides a much-needed compass for policy-makers and other stakeholders to bridge this chasm. It offers guidance on what matters for long-term growth. It can inform policy debates and help shape economic strategies and monitor progress.

Like its predecessor, the GCI 4.0 assesses competitiveness through the factors that determine an economy’s level of productivity—widely considered as

INTRODUCTION

A New Economic Compass for the Fourth Industrial Revolution

Introduction: A New Economic Compass for the Fourth Industrial Revolution

2 | The Global Competitiveness Report 2018

the most important determinant of long-term growth and income. The causal link from productivity to growth and income is firmly grounded in theory and has been established empirically, as discussed in detail in Chapter 3. Performance on the GCI 4.0 explains over 80% of the variation in income levels and 70% of the variation in long-term growth across countries and economies. Beyond income, competitiveness is generally associated with better socioeconomic outcomes, including life satisfaction (see Chapter 1, Figure 14).

The GCI 4.0 framework is organized into 12 main drivers of productivity, or ‘pillars’ (Figure 1). It places a premium on factors that will grow in significance as the 4IR gathers pace: human capital, agility, resilience, and innovation.

Competitiveness is an important starting point because it contributes to higher living standards and generates the resources needed for wider societal goals. There are, inevitably, tensions—social, economic, and environmental—between the various dimensions of economic progress. However, there are no inherent trade-offs among them. We believe that a competitiveness agenda is not just compatible but integral to the pursuit of other developmental goals.

The report is organized as follows: Chapter 1 distils global findings from the inaugural edition of the

GCI 4.0, with four In Depth sections addressing the following questions: “Is there a formula for innovation?”; “Are institutions still important?”; “Are prosperity, people and planet compatible?”; and “Should countries pursue openness?”

Chapter 2 analyses GCI 4.0 performance results by region and for selected economies. Chapter 3 presents the key features of the GCI 4.0 framework and methodology, its theoretical underpinnings, and a description of each pillar. Detailed scorecards for all economies are presented in the Economy Profiles section. Appendix A reports the GCI results at the pillar level, Appendix B describes the Forum’s Executive Opinion Survey and Appendix C provides additional information on the GCI 4.0, including its detailed structure. The Global Competitiveness Report website at http://gcr.weforum.org/ is the essential companion of this report. It features interactive scorecards and rankings, with additional information on each index component, a download section, shareable infographics and articles.

We hope the report will help policy-makers and other stakeholders around the world shape their economic strategies in the era of the 4IR. The Forum is committed to contributing to these efforts through the Centre for the New Economy and Society, the new home of the Global Competitiveness Report.

Pillar 1 Institutions

Pillar 2 Infrastructure

Pillar 3 ICT adoption

Pillar 4 Macroeconomic stability

Human Capital

Markets

Pillar 7 Product market

Pillar 8 Labour market

Pillar 9 Financial system

Pillar 10 Market size

Innovation Ecosystem

Figure 1: The Global Competitiveness Index 4.0 2018

Pillar 5 Health

Pillar 6 Skills

Pillar 11 Business dynamism

Pillar 12 Innovation capability

Enabling Environment

The Global Competitiveness Report 2018 | 3

Introduction: A New Economic Compass for the Fourth Industrial Revolution

NOTES 1 The target is for growth in GDP per capita, which makes it harder

to attain given population growth. The 7% mark was reached by only a handful of least-developed countries over the period 2007– 2017: Myanmar, Timor-Leste, Ethiopia, Lao PDR and Rwanda. See World Bank, 2018.

2 IMF, 2018a.

REFERENCES International Monetary Fund (IMF), World Economic Outlook Update,

July 2018, 2018.

———, World Economic Outlook Database, April 2018 edition, 2018, available for download at www.imf.org/weo.

World Bank, Atlas of Sustainable Development Goals 2018: World Development Indicators, 2018.

The Global Competitiveness Report 2018 | 5

How to sustain growth is a question that preoccupies every government. By drawing a detailed map of the competitiveness landscape of 140 economies, the new GCI 4.0 can point towards lessons learned from global analyses. It can also help respond to critical emerging questions about competitiveness in today’s economic, political, technological and social context.

This chapter distils global findings from the inaugural edition of the Global Competitiveness Index (GCI) 4.0, featured below. It also includes four In Depth sections on what the GCI 4.0 tells us are critical questions arising around innovation, institutions, economic progress, and openness.

Competitiveness is not a zero-sum game between countries—it is achievable for all countries. When competitiveness is equated to productivity, it becomes clear that it is neither a competition nor a zero-sum game. All countries can become more productive at the same time. Improving education standards in Country A does not lower standards in Country B; tackling corruption in Country A does not make Country B more corrupt. Hence, the pursuit of national competitiveness does not undermine global cooperation—indeed, openness contributes to competitiveness (see the third In Depth section later in this chapter). This finding is important to reassert at a time when globalization and the global governance system are being put to the test.

While competitiveness is not a zero-sum game between countries, cross-country comparisons can be instructive by pointing to benchmarks and best practices. The GCI 4.0 therefore presents a ranking of countries, as in previous years, but aims to focus the debate instead on three fundamental questions: Which areas should a country prioritize?; Is a country making progress over time?; and ‘What can a country learn from the highest performing countries?’

This index does this through a ‘distance to frontier’ approach, in which performance on each component is evaluated against the ‘frontier’, or ideal state. Stakeholders are encouraged to ask whether their country is moving closer to the frontier in a given area, where its distance to the frontier is the largest, and what it can learn from those who are performing best in selected areas.

There are deep divides between countries when it comes to current competitiveness—and the risk of further divergence The United States is the closest economy to the frontier, the ideal state, as described by the concepts included in the index, where a country would obtain the perfect score on every indicator. With a competitiveness score of

CHAPTER 1

Global Findings

Chapter 1: Global Findings

6 | The Global Competitiveness Report 2018

85.6, it is 14 points away from the frontier mark of 100, slightly closer than Singapore and Germany (see the full rankings on page xi). This implies that, even though the United States is the top-ranked economy among the 140, there is still room for improvement.

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.

The competitiveness gap runs deep across regions (Figure 1). Europe and North America (the two are grouped together for the purpose of the analysis) are home to seven of the 10 most competitive economies. The three others in the top 10—Singapore, Japan and Hong Kong SAR—are in the East Asia and the Pacific region. Other regions lag significantly behind; in particular Sub-Saharan Africa, where eight of the 10 least competitive economies are found. Additionally, regional averages conceal vast disparities within them. In Europe, there are four distinct groups of countries with very different competitiveness levels. In Latin America, Chile’s score (70.3, 33rd) is almost twice that of Haiti (36.5, 138th). The existence of pockets of over- or under- performance within each region suggests that there is little determinism in competitiveness; it is instead the result of proactive policies and leadership (see Chapter 2 for a longer discussion). The 4IR is likely to compound these differences in competitiveness for countries that are unprepared to leverage new opportunities. It may result in a further segregated world, in which highly

competitive countries adapt and thrive, and the least competitive countries stagnate or decline.1 Similarly, within countries the 4IR could increasingly segregate workforces into “low-skill/low-pay” and “high-skill/high- pay” groups, which could exacerbate inequalities and increase social tensions.2

In the age of the Fourth Industrial Revolution all economies have the opportunity to carve a path to competitiveness For most of the 20th century, the pathway to development seemed relatively clear: lower-income countries would be expected to develop through progressive industrialization by leveraging unskilled labour. Today, the sequence has become less clear. For example, robotics are making light manufacturing less labour-intensive. However, the 4IR is also making it more feasible for lower-income countries to leapfrog in certain areas. ICTs, for instance, have been shown to facilitate access to basic services and enable new business models. ICTs and globalization enable the rapid transfer of ideas and technologies and lower the barriers to innovation, offering new ways to develop.

The GCI 4.0 reflects this growing complexity of policy prioritization by no longer weighting the pillars according to a country’s stage of development. Instead, the overall score is simply the average of the 12 pillar scores. All competitiveness factors matter for all countries, regardless of their stage of development, and any pillar can be considered a potential priority. The 4IR makes it reasonable to take this more agnostic approach to income level and calls for a more encompassing approach to policy prioritization. This is supported by the GCI’s results: a country’s overall competitiveness depends to a very large extent on that country’s performance on the relatively basic drivers of competitiveness (see Chapter 2).

The promise of leveraging technology for economic leapfrogging remains largely unfulfilled Analysis of the GCI pillars makes clear that in many countries, the root causes of slow growth and inability to leverage new opportunities offered by technology continue to be the ‘old’ developmental issues—institutions, infrastructure and skills. Notably, the disappointing economic performance of most Sub-Saharan African countries is more attributable to weaknesses in these areas than in any others, and the much-vaunted economic leapfrogging will not happen unless these issues are addressed decisively.

While there is much hype around the potential of information and communications technologies (ICTs), and while ICTs can clearly be enablers of productivity on some GCI pillars, such as innovation and business dynamism, it would be misguided to rely on technology

Figure 1: The competitiveness gap

30

50

70

90

80

60

40

Singapore Germany

Chad

United States

East Asia and the Pacific

Middle East and North Africa Eurasia Latin America South Asia

Europe and North America

Sub-Saharan Africa

Source: World Economic Forum analysis.

GCI 4.0 2018 score/regional average (0–100 scale)

The Global Competitiveness Report 2018 | 7

Chapter 1: Global Findings

to solve all problems.3 For example, evidence of significant impact technology in areas such as education, health and governance remains anecdotal.4 Additionally, an enabler is not the same as a substitute. There is full complementarity among the drivers of productivity, but little compensability. ICTs cannot, for instance, replace transport infrastructure.

Moreover, ubiquitous ICTs and universal internet access remain aspirational: there are, at most, 4.5 billion smartphones in use in the world and more than half of humanity has never gone online.5 ICT adoption—which often serves as a proxy for a country’s general level of technological adoption—is either the weakest or second weakest of the 12 pillars for 57 out of the 140 countries. The second In Depth section later in this chapter examines how institutions remain a fundamental building block of competitiveness and therefore a prerequisite to fulfilling the promise of leapfrogging.

Fostering innovation requires holistic strategies that most economies have yet to master Innovation is especially critical as a driver of productivity growth and value creation in the 4IR. It is already at the core of the growth agenda of most advanced economies and a growing number of emerging economies. But governments are struggling to understand what makes a country innovative.

The new GCI adopts a broad approach guided by three principles: first, a country’s capacity to innovate depends on the quality of a vast and complex ecosystem; second, innovation is a process through which ideas become successful products; third, innovation happens everywhere, not just in a laboratory, and its outcomes take many forms, from products— goods and services—to businesses and organizational models. Since the GCI 4.0 aims to capture the complexity of the innovation process and the breadth of the ecosystem supporting it, the index includes softer drivers of innovation—such as creativity and entrepreneurship—that are difficult for stakeholders and leaders to grasp, let alone to influence.

The results of the GCI 4.0 reveal there are only a handful of innovation hubs in the world, for reasons we unpack in the first In Depth section later in this chapter. The global median score on the Innovation capability pillar (pillar 12) is 36 out of 100, the lowest score across the 12 pillars. For 77 of the 140 economies studied, Innovation capability is the weakest pillar. Only four ‘super innovators’ score above 80: Germany, the United States, Switzerland and Taiwan (China).

Enhancing the fundamentals of competitiveness improves resilience to shocks The results reveal that countries that optimize their performance on the factors included in the GCI 4.0 are on a higher long-term growth trajectory (see Chapter 3, Box 3) and achieve higher levels of income (see Figure 2). More competitive economies are also more resilient to various shocks. As shown in previous editions, the more competitive advanced economies rebounded from the Great Recession much more quickly, returning to pre- crisis levels of employment and growth by 2015, while less competitive economies experienced protracted stagnation or even long episodes of recession.6 Building economic resilience through competitiveness is more important than ever in today’s volatile context, with a wide range of vulnerabilities, geopolitical tensions and potential flash points around the world.

Likewise, more competitive countries are also better equipped to address the challenges of the Fourth Industrial Revolution (4IR)– and to seize the opportunities it presents. In particular, competitive economies that prioritize agile and innovative businesses and a skilled workforce, combined with visionary governments, are better able to handle the negative impacts of new technologies while also being better prepared for the benefits (see Chapter 3, Box 1 for a longer discussion).

The global economy is growing and the short-term outlook looks favourable—but medium-term risks are mounting. Tariff increases by the United States and retaliatory measures by trading partners have increased

Figure 2: Competitiveness and income

Sources: World Economic Forum; World Bank, 2018; national sources.

Notes: GNI = gross national income (Atlas method), natural log transformation. Data for Venezuela is from 2014, and data for Taiwan (China) is from 2016. N=140, R2 = 0.82.

l East Asia and the Pacific

l Eurasia

l Europe and North America

l Latin America and the Caribbean

l Middle East and North Africa

l South Asia

l Sub-Saharan Africa

30 50 70 90 4

6

8

10

12

GCI 4.0 2018 score (0–100 scale)

GNI per capita (log scale, US$, 2017)

Chapter 1: Global Findings

8 | The Global Competitiveness Report 2018

the likelihood of escalating and sustained trade actions that could derail the recovery and deter investment. Financial market conditions remain accommodating to advanced economies, but this could change rapidly as levels of public, corporate and/or private debt are very high in many advanced and emerging economies. Should a shock occur, government capacity will be limited and credit markets might seize up again. Now is the time to make structural reforms and investment to improve productivity. Given the volatile context, the window might not be open for much longer.

Achieving equality, sustainability and growth together needs proactive, far-sighted leadership There is a worldwide consensus on the need for a more holistic model of economic progress that promotes higher living standards for all, respects planetary boundaries, and does not disadvantage future generations. Competitiveness is necessary but not sufficient to meet these objectives.

In the third In Depth section, we show that more competitive economies tend to do better on selected socio-economic outcomes. Competitiveness, for instance, has a close and positive relationship with measures of poverty and life satisfaction. The relationship with equality is looser: more competitiveness seems neither to systematically reduce or increase inequality. This implies there is no inherent trade-off between equality and growth: it is possible to be both pro-growth and ‘pro-equity’, as shown by the strong performance of several northern European countries both in terms of competitiveness and inclusion (Figure 3). The relationship between competitiveness and the environment, however, is less conclusive. The most competitive economies have the largest ecological footprints, but they are the most efficient (footprint per unit of GDP is the lowest). It

is therefore incumbent upon leaders to set longer-term priorities to create virtuous cycles between equality, sustainability and growth.

In Depth Sections The In Depth sections below sift through the results of the Global Competitiveness Index 4.0 to tackle four important questions—and to debunk the assumptions and myths surrounding them.

• Is there a formula for innovation? A critical driver of productivity, innovation is bound to assume increased significance in the 4IR. In this section, we show the myriad factors that make for a fertile innovation ecosystem. The difficulty of having all these elements in place explains why there are so few innovation hubs around the world.

• Are institutions still important? We show how weak institutions continue to act as a drag on competitiveness, and urge governments to not lose sight of this long-standing governance issue.

• Are prosperity, people and the planet compatible? We stress the importance of competitiveness for overall economic progress. We show that more competitive economies are on a higher long-term growth trajectory (when accounting for their level of development) and achieve better socioeconomic outcomes than less competitiveness economies.

• Should countries pursue openness? We examine how openness is linked to competitiveness and inclusion. We argue that being open is almost always good for competitiveness, and not necessarily bad for inclusion.

Figure 3: Competitiveness and inclusion

0

50

100

50

100 0 (perfect equality)

Brazil

0

(perfect inequality) 100

South Africa

Azerbaijan

United States

Germany Viet Nam

Denmark

Sources: World Economic Forum analysis; World Bank, 2018.

GCI 4.0 2018 score Gini coefficient (inverted 0–100 scale)

The Global Competitiveness Report 2018 | 9

Chapter 1: Global Findings

In Depth: Is there a formula for innovation?

Switzerland: 82.0

Germany: 87.5 United States: 86.5

0

20

40

60

80

100

Pillar 11: Business dynamism

Pillar 12: Innovation capability

75th pctl: 66.3

25th pctl: 52.7

Median: 58.3

75th pctl: 50.7

25th pctl: 30.1

Median: 36.2

Figure 4: The innovation ecosystem, descriptive statistics

Source: World Economic Forum analysis.

Note: Pctl = percentile.

Score (0–100 scale)

The 4IR is reshaping the economic landscape by changing the drivers of growth and competitiveness. It is no longer possible to rely solely on efficiency and cost- cutting for economic success: innovation, flexibility and adaptation to change are becoming the key ingredients. When change is the only constant, economies that can adopt new ideas, methods or products more quickly will have an edge. That’s why embracing opportunities and leveraging innovations can accelerate growth and development for every economy.

However, the Innovation capability pillar has the lowest performance on average of the 12 pillars on the GCI 4.0, with a median score of just 36, and three- quarters of countries score 50 or lower, indicating they are less than halfway to the frontier (Figure 4). The distribution of scores is so skewed that the pillar’s three best performing economies—Germany (87.5), United States (86.5) and Switzerland (82.1)—are considered statistical outliers.

Why are there so few innovation powerhouses in the world? Innovation is a complex process. It starts with the generation of ideas, some of which lead to inventions, and only a few of which are ever commercialized. Innovations enhance economic productivity only if they reach the desired markets and achieve commercial success. Innovation takes place within an ecosystem of multiple factors. Any factor missing from the innovation ecosystem can prevent new ideas from being generated or evolving into viable commercial products.

The index is designed to capture this complexity and assess countries against it. Both the Innovation capability and Business dynamism pillars enable an assessment of each economy’s innovation ecosystem. Innovation capability is comprised of indicators on the

Chapter 1: Global Findings

10 | The Global Competitiveness Report 2018

‘softer’ and less tangible aspects of idea generation, captured in the Interaction and diversity, as well as Research and development (to develop inventions) and Commercialization (the capacity to successfully bring innovation to the market) sub-pillars. The Business dynamism pillar captures broader factors, captured in the two sub-pillars: Administrative requirements (the extent to which the regulatory framework supports creative destruction by making it easy to found and close companies) and Entrepreneurial culture (a country’s willingness to take risks and embrace disruptive ideas).

Other GCI components also play a critical role in determining a country’s capability to innovate. These include ICT adoption (pillar 3), quality of education (captured in the Skills pillar), intensity of competition (Domestic market pillar) and availability of financing (Financial system pillar).

The results demonstrate that the countries with the winning formulas for innovative ecosystems have embraced a wide range of measures to achieve success. On average, high-income economies achieve significantly higher scores than those in lower-income brackets on each of the five sub-pillars that make up the Business dynamism and Innovation capability pillars, demonstrating that their innovation ecosystems are more developed. Nonetheless, they are still far from the frontier on all dimensions—and all economies have potential for further progress (Figure 5).

The most striking differences are found in the Research and development sub-pillar, which includes indicators on R&D spending, patents, publications and research institutions.7 For 94 of the 140 economies featured in the report, this sub-pillar is the

lowest scoring of the five. Nonetheless, despite low levels of research and development these economies can still adopt technologies developed elsewhere and adapt them for local needs. For example, in some developing economies the diffusion of mobile phones has become a platform for delivering financial services.8

The gap between advanced and developing economies is less prominent on the Administrative requirements sub-pillar, but there is still room for improvement. Further reducing administrative burdens on starting or closing a business represents a relatively achievable goal in terms of policy intervention: accessible, low-cost and without requiring cultural shifts.

The top performers in the upper- and lower middle-income brackets, such as China and India, are catching up with or even outperforming the average among high-income economies. China, for example, is already more advanced when it comes to investing in research and development sub-pillar than the average high-income economy, while India is not far behind and let down only by its less-efficient bureaucracy for business creation and insolvency. The catch-up process is reflected in the emergence of Chinese and Indian companies in technology- intensive sectors. China is home to 33% of the world’s ‘unicorns’ (private companies valued at over 1 billion) in 2017, up from 12% in 2014.9

Among low-income countries, however, even the best performers are still lagging behind. Kenya, for example, underperforms on most of the five sub-pillars. This supports the widely-held idea

20

40

60

80

100

Entrepreneurial culture

Administrative requirements

Commercialization

Research and development

Interaction and diversity

Figure 6: Innovation ecosystem performance By top performer from each income group

High income China India Guinea

Source: World Economic Forum analysis.

20

40

60

80

100

Entrepreneurial culture

Administrative requirements

Commercialization

Research and development

Interaction and diversity

Figure 5: Innovation ecosystem performance By income group

High income Upper-middle income Lower-middle income Low income

Source: World Economic Forum analysis.

The Global Competitiveness Report 2018 | 11

Chapter 1: Global Findings

that innovation requires stable conditions—such as well-established institutions, extensive ICT adoption, domestic market competition and a favourable education system—and suggests these factors should be priorities for governments in low- income economies that are looking to innovation for employment growth.10

The exception to this performance gap is found in the Entrepreneurial culture sub-pillar, which the GCI results suggest is not a prerogative of advanced economies. In Uganda, for example, 28.1% of the population are self-described entrepreneurs, the highest percentage in the world.11

Among the best performers, the so-called ‘softer’ drivers of innovation—represented by the sub-pillars Entrepreneurial culture and Interaction and diversity—distinguish the ‘super innovators’, Germany and the United States from other innovation hubs found in countries such as Japan and Korea (Figure 7).

One reason why Korea and Japan lag slightly behind their high-income peers on these sub-pillars could be a tendency toward uncertainty avoidance. As Figure 8 shows, despite some recent increases, the appetite for entrepreneurial risk in Japan and Korea is significantly lower than in the United States. Possible explanations include perceived higher opportunity costs to entrepreneurial risk and other cultural factors that make it more difficult to embrace disruptive ideas. In fact, many experts attribute Japan’s ‘lost decade’ partly to companies’ reluctance to be forward-looking and break away from the status quo. A more vibrant innovation ecosystem

20

40

60

80

100

Entrepreneurial culture

Administrative requirements

Commercialization

Research and development

Interaction and diversity

Figure 7: Innovation ecosystem performance

Korea, Rep. Japan Germany United States

Source: World Economic Forum analysis.

Figure 8: Evolution in attitudes toward entrepreneurial failure

1

2

3

4

5

6

7

20182017201620152014201320122011201020092008

Germany

United States

Korea, Rep.

Japan

Israel

China

Source: World Economic Forum, Executive Opinion Survey (various editions).

Note: Response to the survey question: “In your country, to what extent do people have an appetite for entrepreneurial risk?” (1 = not at all; 7 = to a great extent). See Appendix C for more details.

Score (1–7)

would allow these economies to more fully translate their research efforts into economic growth and increase long-term resilience to technological shocks.

For success in the Fourth Industrial Revolution, all economies—whether advanced or developing— will need to embrace the opportunities offered by innovation. The Global Competitiveness Index helps them to identify which factors—from regulations to cultural practices—each country’s government needs to focus on to develop a balanced and dynamic innovation ecosystem.

Chapter 1: Global Findings

12 | The Global Competitiveness Report 2018

Strong institutions are a fundamental driver of both productivity and long-term growth. Their benefits extend well beyond economics, affecting people’s well-being on a daily basis. Adam Smith first highlighted this in 1776, and it has been established as empirically sound time and again ever since.12 Differences in institutional quality underlie many of the reasons for differences between countries in technology and physical and human capital, which can explain a large part of cross-country differences in income (see Figure 9).13 Further, ample empirical evidence has shown the ongoing importance of stable, effective institutions for economic productivity.14

It is because of the importance of these economic building blocks that the first of the GCI 4.0’s 12 pillars assesses the strength and quality of an economy’s institutions. By shaping the ways in which individuals organize themselves and their economic transactions, institutions form the backbone of economic activity and stable societies.

Weak institutions continue to hinder competitiveness, development and well-being in many countries. The Institutions pillar is the second-lowest scoring pillar of the 12 GCI pillars (after the Innovation capability pillar), with a median score of 53—just over halfway to the frontier. For 117 of the 140 economies studied, their Institutions pillar performance is a drag on their overall competitiveness score (Figure 10).

In Depth: Are institutions still important?

Figure 9: Institutional strength and income

20 40 60 80 100 4

6

8

10

12

Venezuela

New Zealand

Rwanda

Switzerland

Sources: World Economic Forum analysis; World Bank, 2018; national sources.

Note: N=140, R2 = 0.63.

GNI per capita (log scale, US$, 2017)

Pillar 1: Institutions score (0–100 scale)

Figure 10: Institutions and other drivers of competitiveness By region

0

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80

S u b

-S ah

ar an

A fr

ic a

S o u th

A si

a

M id

d le

E as

t an

d N

o rt

h A

fr ic

a

L at

in A

m er

ic a

an d

t h e

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p e

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N o rt

h A

m er

ic a

E u ra

si a

E as

t A

si a

an d

t h e

P ac

ifi c

Source: World Economic Forum analysis.

Note: N=140.

n Pillar 1: Institutions n Average of Pillars 2–12

Average score (0–100 scale)

The Global Competitiveness Report 2018 | 13

Chapter 1: Global Findings

Economic agents will not invest if they fear they will need to spend excessive amounts of time and money on protecting their property and monitoring the fulfilment of contractual obligations. Their expectations depend on the levels of trust in society; on whether public institutions are capable of ensuring a basic level of security and enforcing property rights, and are characterized by transparency, efficiency, and checks and balances; and on the strength of corporate governance standards and prevailing business ethics.

The GCI 4.0 therefore conceptualizes institutions broadly as including formal, legally binding constraints—rules, laws, constitutions and associated enforcement mechanisms—and informal constraints, such as norms of behavior, conventions and self-imposed codes of conduct.1 Pillar 1: Institutions comprises six sub-pillars and 20 indicators, as shown in Table 1.1.

Table 1.1: Structure and composition of Pillar 1: Institutions

Component Worst performer Best performer

Security

1.01 Business costs of organized crime El Salvador Finland

1.02 Homicide rate El Salvador Japan

1.03 Terrorism incidence Pakistan Multiple

1.04 Reliability of police services Venezuela Finland

Social capital Burundi Australia

1.05 Social capital Burundi Australia

Checks and balances Chad Finland

1.06 Budget transparency Multiple Multiple

1.07 Judicial independence Bolivia Finland

1.08 Efficiency of legal framework in challenging regulations Venezuela Finland

1.09 Freedom of the press China Norway

Public-sector performance Venezuela Singapore

1.10 Burden of government regulation Brazil Singapore

1.11 Efficiency of legal framework in settling disputes Venezuela Singapore

1.12 E-Participation Lesotho Multiple

1.13 Future orientation of government Venezuela Singapore

Transparency Yemen New Zealand

1.14 Incidence of corruption Yemen New Zealand

Property rights Venezuela Singapore

1.15 Property rights Venezuela Finland

1.16 Intellectual property protection Venezuela Finland

1.17 Quality of land administration Sri Lanka Singapore

Corporate governance Haiti Singapore

1.18 Strength of auditing and accounting standards Angola Finland

1.19 Conflict of interest regulation Ethiopia Multiple

1.20 Shareholder governance Haiti Kazakhstan

Source: World Economic Forum analysis.

Note: See Appendix C for detailed methodology. Visit http://gcr.weforum.org for detailed results.

Box 1: Defining ‘institutions’

Notes

1 The definition is loosely based on North, 1994. For a longer discussion on the impact of public and private institutions on productivity, and for a full literature review, see World Economic Forum, 2015, Chapter 1.2.

Chapter 1: Global Findings

14 | The Global Competitiveness Report 2018

Greece, Italy and Belgium. With a score of 8, Venezuela is by far the least future-prepared economy.

In summary, the results of the GCI are a reminder not to lose sight of the fundamental need for strong institutions, particularly as institutions have actually worsened in some economies over the past year. The fact that institutional strength as a driver of economic growth is a perennial yet fundamental correlation and not a new theory does not make it any less important.

Among the six sub-pillars of the Institutions pillar, global performance is best on Security.15 Here, the median score is 72 and half of all countries score 75 or above, with Finland (97.5) coming closest to being free from terrorism and crime. With equal scores of 33.8, El Salvador and Venezuela are the worst performers, but crime and violence extract a huge economic and human toll across Latin America. The continent’s largest economies—Brazil (45.8), Mexico (46.0) and Colombia (43.5)—are less than halfway to the frontier. Nigeria, Yemen, South Africa, Pakistan and the Philippines are other countries with notable problems related to violence, crime or terrorism, and where the police are considered unreliable. Across all countries, the relationship between the prevalence of organized crime and the perceived reliability of the police is strikingly close.

Transparency is the weakest sub-pillar overall. Scores are assessed using Transparency International’s Corruption Perception Index (CPI), for which the World Economic Forum’s Executive Opinion Survey is a source (see Appendix B). On the CPI’s scale, ranging from 0 (“highly corrupt”) to 100 (“very clean”), two-thirds of the 140 GCI countries score lower than 50 and the median is just 43. When advanced economies are excluded, the median drops to 36. The worst-performing region is Eurasia but Latin America and the Caribbean is home to the world’s most corrupt country, Venezuela, which has a score of 18.

Public sector performance is the second weakest sub-pillar. Unnecessarily burdensome regulation creates delays, raises transaction costs, reduces accountability, and disproportionately penalizes smaller businesses and average citizens. It creates room for corruption and arbitrary decisions, which is reflected in the close association between the scores for this sub-pillar and those of the Transparency sub-pillar.

The overall level of ‘future preparedness’—which will become increasingly important in the 4IR—is very low. The Public sector performance sub-pillar is made up of indicators reflecting a government’s ability to prepare for the future, and covers policy stability, responsiveness to change, long-term vision and the adaptability of the legal framework to technological change. The median score is just 45, yet the most future-prepared governments are not necessarily those of the most competitive economies. Only three—Switzerland, the United States and Singapore— feature in the top 10 of both lists. The East Asia and the Pacific and Middle East and North Africa regions outperform Europe and North America, with Singapore (85.6) scoring highest followed by Luxembourg (79.0), the United States (78.3), and the United Arab Emirates (76.7). The relationship between future-preparedness and income level is positive but extremely loose, with Malaysia and Rwanda, for example, scoring significantly higher than

The Global Competitiveness Report 2018 | 15

Chapter 1: Global Findings

Sustained economic growth has been the main policy priority under the prevailing liberal international economic order that gained ascendancy in the early twentieth century.16 But too narrow a focus on growth has blinded many governments to adverse distribution effects and negative externalities as technological change and globalization have gathered force. Slow progress in living standards and widening inequality, exacerbated by the Great Recession that began in 2007, have contributed to political polarization and erosion of social cohesion in many advanced and emerging economies.

There is now a worldwide consensus on the need for a more holistic model of economic progress—a model that acknowledges growth as necessary but recognizes the need for additional measures to achieve higher living standards for all, while ensuring environmental sustainability and the interests of future generations.17

There are, inevitably, some tensions and trade-offs among the various dimensions of economic progress. But there is also potential for virtuous cycles. For example, as growth raises the income of individuals, it increases their ability to pay for services and goods that improve their health, education and welfare. This opens up new opportunities to improve their economic prospects, while increasing their overall well-being. Similarly, growth broadens a country’s tax base, generating resources that the government can spend on public services, such as security, infrastructure, health, education and income redistribution—expenditures that can, over time, improve economic prospects.18

Performance results on the GCI 4.0 add to ample empirical evidence that more competitive economies on average do in fact perform better on various measures of economic progress—including poverty, inequality and well-being; however, the evidence is more mixed in the case of environmental sustainability.

Competitiveness and poverty The incidence of extreme poverty is an important measure of broad-based economic progress, and low productivity is its proximate cause: the poor produce too little to earn a wage to subsist let alone to invest in healthcare and education.19 That’s why higher competitiveness scores are typically associated with lower poverty (Figure 11). In fact, only two countries in the top half of the GCI rankings— South Africa and India—demonstrate what is considered an extreme poverty incidence, in which the poverty rate exceeds 10% of the total population.

Median household income is perhaps the most visible signifier of the breadth of progress in living standards.20 Here, too, there is a close relationship with competitiveness. Figure 12 suggests the relationship between median household income and competitiveness is non-linear: a unit increase in the GCI 4.0 score is associated with an exponential increase in median income. Moreover, the relationship is

In Depth: Are prosperity, people and planet compatible?

Figure 11: Competitiveness and extreme poverty

30 50 70 90 0

20

40

60

80

South Africa India

M e a n

Mean

Source: Sources: World Economic Forum analysis; World Bank World Development Indicators (WDI) database, retrieved 28 August 2018.

Notes: N=121. Poverty headcount ratio at PPP$ 1.90 a day (2011 constant prices) in percentage of population (latest year available).

GCI 4.0 2018 score (0–100 scale)

Poverty incidence (%)

Chapter 1: Global Findings

16 | The Global Competitiveness Report 2018

Figure 13: Competitiveness and inequality

South Africa

Brazil

United States

30 50 70 90 0

20

40

60

80

100

Netherlands Denmark Sweden

Azerbaijan

Chad

Viet Nam

Sources: World Economic Forum analysis; World Bank World Development Indicators (WDI) database.

Note: N=128.

GCI 4.0 2018 score (0–100 scale)

Gini coefficient (0–100 scale, 100=perfect inequality, 0=perfect equality), latest year available

Figure 12: Competitiveness and median income

Luxembourg

Belgium

Israel

Malaysia

30 50 70 90 0.0

0.5

1.0

1.5

2.0

2.5

Sources: World Economic Forum analysis; World Bank PovcalNet.

Note: R2 = 0.82.

GCI 4.0 2018 score (0–100 scale)

Monthly median income, US$ thousands (latest year available)

all the income). As shown in Figure 13, there appears to be a relationship between the income Gini coefficient and competitiveness. Yet it’s an extremely weak one. In fact, the most equal and unequal countries, Azerbaijan and South Africa, respectively, earned a similar overall GCI score (60.0 and 60.8), whereas the most and least competitive countries, United States and Chad, have a similar Gini coefficient (42 and 43). Thus, it would be inaccurate to conclude that more competitive countries are reliably more inclusive.

Results of the GCI 4.0 are consistent with the general consensus emerging from empirical studies that there is no consistent relationship between equality and growth.22 This also implies that, contrary to widespread belief, inequality is not caused by growth. There is no inherent trade-off between equality and growth: it is possible to be pro-growth and pro-equity. The Netherlands, Sweden and Denmark feature in the top 10 of the GCI and are among the world’s most equal countries. Governments need to rebalance policy priorities to respond to both stagnating growth and rising inequality, which, together, fuel frustrations and erode trust in institutions, technological progress and globalization.

Competitiveness and well-being An individual’s overall well-being is arguably the ultimate measure of human welfare. Figure 14 shows that GCI 4.0 scores explain over two-thirds of differences in so-called ‘life satisfaction’, as measured on Cantril’s Ladder of Life Scale, which ranges from 0 (‘the worst possible life’) to 10 (‘the best possible life’), for the 135 countries for which data exists. This is remarkable, considering the many cultural, historical and political idiosyncrasies that can influence answers to the question: ‘How satisfied are you with your life as a whole these days?’

Leisure time is another determinant of well-being.23 Contrary to popular belief, higher competitiveness is typically associated with less working time and therefore more leisure time: workers in the GCI 4.0’s 10 most competitive economies work, on average, 361 fewer hours per year—or eight fewer hours per week— than in the 10 lowest-ranked economies for which working time data exists.24 When excluding the United States and Singapore, the weekly average decreases by two additional hours. In Germany, the third-most competitive economy, workers average just 1,371 hours per year or 29 hours per week—10 fewer than the average across the 66 countries for which working time exists. This suggests productivity is increased not through more working hours, but by using working hours more efficiently.

Competitiveness and environmental sustainability The relationship between competitiveness and the environment is multi-faceted and complex. In the long term, economic activity must respect planetary

remarkably close: performance on the GCI 4.0 explains 82% of the variation in median income across countries.21 Yet the correlation between the two is not exact. For example, although Malaysia and Belgium have a similar GCI score, Belgium’s median income is three times higher than Malaysia’s.

Competitiveness and inequality Income Gini coefficient is the standard measure of inequality used by most institutions and organizations around the world. Values range from 0 (‘perfect equality’, in which every individual receives the same income) to 100 (‘perfect inequality’, when one individual receives

The Global Competitiveness Report 2018 | 17

Chapter 1: Global Findings

boundaries. Environmental damage in the form of pollution, climate change, resource scarcity, ecosystem destruction and biodiversity loss may undermine future growth, and, ultimately, put humanity at risk. For example, the Global Footprint Network’s estimates that humanity uses the equivalent of 1.7 Earths to provide the resources we use and absorb our waste.25 Figure 15 shows that there is a clear tension between economic progress and environmental sustainability: more competitive countries have a much bigger ecological footprint. If everyone lived like the average resident of the United States, the world’s most competitive economy, it would take 4.9 planets to support humanity’s footprint. The world’s heaviest footprint is Qatar, an economy in the top 30 of the GCT and where 9.3 Earths is required.

Yet the tension can be eased: ‘green growth’— facilitating economic growth while taking into account environmental concerns—is possible, particularly with new technologies.26 Policies that create incentives for greater efficiency in the use of natural resources, reducing waste and energy consumption, unlocking opportunities for innovation and value creation, and allocating resources to the highest-value use can simultaneously reduce environmental impact and increase productivity and growth. With greater wealth, more competitive economies tend to have the resources and the measures in place to use natural resources more efficiently.27 As a result, even though they have the largest ecological footprint per capita, the most competitive economies have the smallest ecological footprint per unit of output (Figure 16). Further, data suggests that between 2004 and 2014, this ratio has actually decreased globally.28 In addition, other studies show that most countries have reached peak

carbon intensity, and are expecting downward trends in carbon usage.29

These are positive developments, but overall efforts to maintain efficient use of natural resources remain insufficient. The hope of seeing (modest) international commitments and targets designed to curb greenhouse gas emissions is fading, and with it the probability—now estimated at less than 5%—to keep global warming within 2ºC by 2100.30 In keeping with the long-term thinking espoused by the GCI 4.0, it is critical that countries commit to green growth, which indicates a promising avenue for leveraging new technologies to foster both sustainability and a strong growth and jobs agenda.

Figure 14: Competitiveness and life satisfaction

Burundi

United States

30 50 70 90 0

2

4

6

8

10

Denmark Norway

Finland

Sources: World Economic Forum analysis; Helliwell et al., 2018.

Note: N=123, R2 = 0.68.

GCI 4.0 2018 score (0–100 scale)

Life satisfaction (0=worst possible life, 10=best possible life), 2015–2017

Figure 15: Competitiveness and ecological footprint

30 50 70 90 0

6

12

18

Luxembourg

United States

Chad

Qatar

Sources: World Economic Forum analysis; Global Footprint Network.

Note: N=135; gha = global hectare. The consumption footprint includes the area needed to produce the materials consumed and the area needed to absorb carbon dioxide emissions.

GCI 4.0 2018 score (0–100 scale)

Ecological footprint of consumption (gha), 2014

Figure 16: Competitiveness and ecological footprint per unit of output

30 50 70 90 0

5

10

15

20

25

Sources: World Economic Forum analysis; Global Footprint Network; IMF, 2018.

Note: N=135, R2 = 0.63.

GCI 4.0 2018 score (0–100 scale)

Ecological footprint of production (sq. meters/US$ of GDP)

Chapter 1: Global Findings

18 | The Global Competitiveness Report 2018

The accelerated pace and intensity of trade liberalization, openness and integration over recent decades has been a ‘win-win’ between countries but at times a ‘win-lose’ within countries. While increasing prosperity overall, free trade may bear partial responsibility for raising inequality by reducing the income of relatively small and concentrated social groups.

However, attempting to address inequality by reversing globalization is counterproductive and disastrous for sustained economic growth. GCI 4.0 results show that more open economies are more innovative and tend to be characterized by more competitive markets. Policies should, therefore, focus on improving the conditions of those specifically impacted by globalization rather than favouring protectionism. Combining GCI data with other sources suggests that redistributive policies, safety nets, investments in human capital, and more progressive taxation could help reduce inequality without compromising a country’s level of competitiveness.

Globalization has contributed to reducing both global poverty and between-countries inequality. Trade has contributed to generating prosperity across all countries in the past few decades.31 The benefits of trade openness have been particularly remarkable in South-East Asia and China, where export-led economic growth has quickly raised the living standards of a sizable portion of the population. In China, for example, between 1996 and 2014 the number of people living on less than US$3.20 per day collapsed from 890 million to 129 million.32 In Viet Nam, evidence suggests that the

Figure 18: Domestic competition performance By openess level

0

10

20

30

40

50

60

70

80 Low openness

High openness

Emerging market and developing economies

Advanced economies

Source: World Economic Forum analysis.

Note: See Figure 17 for country classifications and definition of openness.

n High openness n Low openness

Domestic competition score, 0–100 scale

Figure 17: Innovation performance By openness level

0

10

20

30

40

50

60

70

80 Low openness

High openness

Emerging market and developing economies

Advanced economies

Source: World Economic Forum analysis.

Note: Country groupings are based on IMF classification. Openness is defined by the average of six indicators: Non-tariff measures; Tariffs; Service trade restrictiveness index; Ease of hiring foreign labour; International co-inventions; and Customs clearance (all values expressed in scores). Innovation capability corresponds to the score of GCI pillar 12. Domestic competition corresponds to the score of GCI Sub-pillar 7A.

n High openness n Low openness

Innovation capability score, 0–100 scale

In Depth: Should countries pursue openness?

The Global Competitiveness Report 2018 | 19

Chapter 1: Global Findings

2001 US-Viet Nam bilateral trade agreement reduced poverty by increasing wage premiums in export sectors, reallocating labour from agriculture to manufacturing and stimulating enterprise job growth.

Economies that participate the most in the global economy are also the most competitive. The GCI highlights the centrality of international openness for productivity. It enables greater and faster diffusion of ideas and technology, which boosts innovation (Figure 17). Open countries also tend to have more competitive markets, which compels domestic companies to innovate and procure the latest technologies to compete with the best international firms (Figure 18).

Since 1980, within-country income inequalities have increased in most economies. Over the past three decades, the Gini coefficient increased in 17 out of the 22 OECD countries for which long-term data is available. In the United States, where the increase is among the highest, the share of income accruing to the richest 1% of the population has more than doubled to about 20% over the past 30 years, while the share attributed to the middle class has fallen.33

Many emerging economies have also experienced an increase in inequality. While distributional effects are often attributed to declining manufacturing workforces, they are also evident in many countries that have experienced sustained economic growth and decreasing poverty. In China, for example, between 1995 and 2015 the Gini coefficient increased from 36.3 to 40.2,34 and the share of income accruing to the top 10% of the population increased from 33% to 41%.

Openness to international trade bears part of the blame for rising inequality, but there are other important factors. Evidence supports the idea that international trade can drive down wages and employment in the manufacturing sectors most exposed to foreign competition.35 However, the expansion of automation, the rise of the digital economy and generalized reduction in taxation progressivity have also had a significant impact.36

To reverse economic integration in an attempt to curb income inequalities would be highly ineffective and counterproductive. Protectionist policies will not address the continuing impacts of factors such as automation and digitization on the structure of economies and distributional outcomes. They will, however, harm the transfer of technologies, the innovation process and economic growth. In the short term, protectionism could also negatively affect workers engaged in global value chains. Redistribution of economic gains would be better achieved through well-designed international agreements and national policies.

Countries have succeeded in lowering inequality by making greater efforts to redistribute income. There is evidence showing that the tax-benefit systems found

in most advanced economies have helped to attenuate inequality37 and protect vulnerable households from adverse economic shocks. Figure 19 shows that economies that redistribute the most can attain lower inequality levels while at the same time continuing to maintain policies of openness. Although safety nets are more common in advanced economies, some emerging economies, too, have recently started to successfully reduce inequality through public policies and programs.38

Policies promoting more equal access to human and financial capital are crucial in narrowing inequalities. Measures such as income transfers may mitigate some cyclical causes of inequality, but to address structural inequalities requires complementary measures aiming to level the playing field for disadvantaged households. These can include broadening access to quality education and healthcare, greater financial inclusion, more progressive taxation and efforts to curb tax evasion.

Active labour market policies also play a central role. While safety nets are useful to smooth transitions across jobs, structural changes in the labour market can make it difficult for workers who lose their job to find another at a comparable wage level in the short time. With the current speed of technological disruption, workers in the middle of their careers may see a significant

Figure 19: Openness, inequality and redistribution

M e a n

Mean

20 40 60 80 100 20

30

40

50

60 ZAF

MEX

CHN USA SGP

GBR

DEU FRA

DNK NLD

Sources: Standardized World Income Inequality Database (SWIID) and World Economic Forum analysis.

Note: N=45. The color of each data point reflects the level of redistribution. The redistribution level corresponds to the SWIID’s relative redistribution estimate (market-income inequality minus net-income inequality, divided by market-income inequality). See Figure 11 for a definition of openness. The following economies are referenced in the figure: SGP=Singapore; DEU=Germany; NLD=The Netherlands; USA=United States; DNK=Denmark; GBR=United Kingdom; FRA=France; MEX=Mexico; ZAF=South Africa; and CHN=China.

Openness

Gini coefficient (0–100 scale)

Less redistribution More redistribution

Chapter 1: Global Findings

20 | The Global Competitiveness Report 2018

contraction of demand for their current skills.39 A recent study suggests that over the next decade, in a set of companies representing 15 million workers in total today, 1 million jobs will disappear but 1.7 million new jobs requiring new skills will be created.40 Further, by 2022 at least half of all current employees will require significant reskilling and upskilling.41 Policies to address this tremendous challenge are clearly needed—as is investment in infrastructure, which has been shown to sustain real income growth among the lower-skilled and foster employment and re-qualification in de- industrialized areas.

Market forces alone cannot be relied on to address inequality. Policies that redistribute gains and opportunities from winners to losers are required to ensure that trade is inclusive. While a growth agenda is central to achieving national prosperity, there is a need for complementary policies—both passive (income transfers) and active (e.g targeting education and reskilling). Workers vulnerable to international trade need to be resilient to income shocks—but should also be encouraged to acquire the skills necessary to benefit from the changing economic landscape.

NOTES 1 Education deficits, for instance, have long been a cause of slow

development, and will have disastrous consequences in the 4IR as the destruction of low-skilled jobs, through automation and efficiency accelerates.

2 Schwab, 2015.

3 The term was coined by author Evgeny Morozov.

4 See Juma, 2017, for a critique of leapfrogging.

5 Authors’ calculations based on ITU, 2018.

6 World Economic Forum, 2015.

7 See Appendix C for details on the GCI structure.

8 Parizat and Strubenhoff, 2018.

9 Wu, 2017, and CB Insights, 2017.

10 Cerera and Sabetti, 2016.

11 Brinded, 2015.

12 “Commerce and manufactures can seldom flourish long in any state which does not enjoy a regular administration of justice, in which the people do not feel themselves secure in the possession of their property, in which the faith of contracts is not supported by law, and in which the authority of the state is not supposed to be regularly employed in enforcing the payment of debts from all those who are able to pay. Commerce and manufactures, in short, can seldom flourish in any state in which there is not a certain degree of confidence in the justice of government”, Wealth of Nations, 1776.

13 See Acemoglu, 2009, for an exhaustive discussion on institutions and the fundamental causes of economic growth.

14 For example, North and Thomas, 1973, discuss a system of property rights as the key to growth. Hall and Jones, 1998, find that differences in capital accumulation and labour productivity are driven by differences in institutions and government policies. Acemoglu, et al, 2001, show that institutions are robustly related to present-day differences in per-capita incomes. Rodrik, et al, 2002, find that property rights are more important than either geography or trade in determining income levels around the world.

15 It must be noted that the countries covered by the GCI present a level of security and stability sufficient for data to be collected. In war-torn countries and failed states, it would be pointless and impossible to carry out an assessment of competitiveness.

16 Kundnani, 2017.

17 In 2017, the World Economic Forum launched the Inclusive Development Index (IDI) to evaluate countries’ success against this broader notion of economic progress. The assessment is based on 15 criteria: income; labour productivity; employment; healthy life expectancy; median household income; poverty incidence; wealth Gini; income Gini; adjusted net savings; dependency ratio; public debt; and carbon Intensity. See World Economic Forum, 2017 and 2018b for details and results.

18 See Bannister and Mourmouras 2017. They find that on average a higher level of income is associated with higher life expectancy and lower inequality.

19 Rodrik, 2012.

20 Median household income for a country is the amount that divides the income distribution into two equal groups.

21 R2 value based on a polynomial regression of degree two of median income on GCI 4.0 score.

22 DfID, 2008.

23 OECD, 2009, Chapter 2.

24 Authors’ calculations based on Penn World Tables data (Feenstra et al., 2015). Working time corresponds to the average annual hours worked by persons engaged. Working time data is available for 66 of the 140 economies covered by the GCI 4.0. The 10 lowest-ranked economies in the GCI for which working time data is available are: Trinidad and Tobago (75th, 1,583 hours), Viet Nam (76th, 2,340 hours), Jamaica (77th, 1,868 hours), Argentina (79th, 1,777 hours), Sri Lanka (84th, 2,075 hours), Ecuador (85th, 2,086 hours), Bangladesh (102th, 2,372 hours), Pakistan (107th, 2,283 hours), Cambodia (110th, 2,510 hours), and Venezuela (127th, 1,795 hours). Annual hours worked were divided by 48 to approximate working time per week.

25 GFN, 2018. See also WWF, 2016.

26 For more on the concept of green growth and its implementation, see OECD, 2011.

27 Yale and Columbia Universities, 2018.

28 World Economic Forum’s calculations based on GFN, 2018.

29 Raftery et al., 2017.

30 Ibid.

31 Frankel and Romer,1999.

32 The World Bank, Poverty & Equity Data Portal, China, http:// povertydata.worldbank.org/poverty/country/CHN.

33 World Inequality Lab, 2018, https://wir2018.wid.world.

34 Solt, Standardized World Income Inequality Database.

35 Autor et al., 2013.

36 For studies on the effect of technology and trade on inequality see, for instance, Good, et al., 2014, Karabounis et al., 2013, and Autor, et al., 2018. The decline in progressivity of taxation is documented by World Inequality Lab, 2018.

37 Ravallion, 2018.

38 Ibid.

39 Mckinsey Global Instiitute, 2017.

40 World Economic Forum, 2018a.

41 Ibid.

The Global Competitiveness Report 2018 | 21

Chapter 1: Global Findings

REFERENCES Acemoglu, Daron, Introduction to Modern Economic Growth, Princeton

University Press, 2009.

Autor, David and Anna Salomons, Is Automation Labor-Displacing? Productivity Growth, Employment, and the Labor Share, NBER Working Paper No. 24871, National Bureau of Economic Research, 2018.

Autor, David H., David Dorn, and Gordon H. Hanson, “The China Syndrome: Local Labor Market Effects of Import Competition in the United States” American Economic Review, vol. 103, no. 6, 2013, pp. 212–2168.

Bannister, Geoffrey J. and Alex Mourmouras, Welfare vs. Income Convergence and Environmental Externalities, IMF working paper: WP/17/271, International Monetary Fund, 2017.

Brinded, Liana, The 9 Countries with the Most Entrepreneurs, World Economic Forum, 2015, https://www.weforum.org/ agenda/2015/06/the-9-countries-with-the-most-entrepreneurs/.

CB Insights, Research Briefs: Unicorns Abroad: The Creation Of Billion- Dollar Startups Is Shifting Out Of The US, 2017.

Cirera, Xavier and Leonard Sabetti, The Effects of Innovation on Employment in Developing Countries: Evidence from Enterprise Surveys, Policy Research Working Paper No. 7775, World Bank, 2016.

Department for International Development (DfID), Growth - Building Jobs and Prosperity in Developing Countries, DfiD working paper, 2008.

Feenstra, Robert C., Robert Inklaar and Marcel Timmer, “The Next Generation of the Penn World Table”, American Economic Review, vol. 105, no. 10, 2015, pp. 3150-3182, dataset available for download at www.ggdc.net/pwt.

Frankel, Jeffrey A. and David Romer, “Does trade cause growth?”, American Economic Review, vol. 89, no. 3, 1999, pp. 379–399.

Global Footprint Network (GFN), National Footprint Accounts 2018, 2018.

Goos, Maarten, Alan Manning, and Anna Salomons, “Explaining job polarization: Routine-biased technological change and offshoring”, American Economic Review vol. 104, no. 8, 2014, pp. 2509–2526.

Helliwell, John F., Richard Layard, and Jeffrey D. Sachs, World Happiness Report 2018, Sustainable Development Solutions Network, 2018.

International Monetary Fund (IMF), World Economic Outlook Database (April 2018 edition), 2018.

International Telecommunications Union (ITU), World Telecommunications/ICT Indicators Database 2018 (22nd, June 2018 edition), 2018.

Juma, Calestous, “Leapfrogging Progress: The Misplaced Promise of Africa’s Mobile Revolution”, The Breakthrough Journal, summer/ issue 7, 2017.

Karabarbounis, Loukas and Brent Naiman, The Global Decline of the Labor Share, NBER Working paper #19136, National Bureau of Economic Research, 2013.

Lustig, Nora, Fiscal Policy, Inequality and the Poor in the Developing World, Tulane University Economics Working Paper 1612, 2016.

McKinsey Global Institute, Jobs Lost, Jobs Gained: Workforce Transitions in a Time of Automation, 2017.

North, Douglass C., “Economic Performance Through Time”, American Economic Review, vol. 84, no. 3, 1994, pp. 359–68.

OECD, Society at a Glance 2009, 2009.

———, Towards Green Growth, 2011.

Parizat, Roy and Heinz-Wilhelm Strubenhoff, Future Development: Using Big Data to Link Poor Farmers to Finance, Brookings, 2018.

Raftery, Adrian E., Alec Zimmer, Dargan M.W. Frierson, Richard Startz, and Peiran Liu, “Less than 2 °C warming by 2100 unlikely”, Nature Climate Change, vol. 7, 2017, pp. 637–641.

Ravallion, Martin, “Inequality and Globalization: A Review Essay”, Journal of Economic Literature, vol. 56, no. 2, 2018, pp. 620–642.

Rodrik, Dani, One Economics, Many Recipes: Globalization, Institutions, and Economic Growth, Princeton University Press, 2008.

———, “Global Poverty Amid Global Plenty: Getting Globalization Right”, Americas Quarterly, Spring, 2012.

Schwab, Klaus, “The Fourth Industrial Revolution”, Foreign Affairs, December, 2015.

Sen, Amartya, Development as Freedom, Oxford, Oxford University Press,1999.

Solt, Frederick, The Standardized World Income Inequality Database, 2009, https://hdl.handle.net/1902.1/11992, Harvard Dataverse, V20.

United Nations Conference on Trade and Development, Regional trade agreements, integration and development, UNCTAD Research Paper no. 1, 207.

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———, The Future of Jobs Report 2018, 2018.

———, The Inclusive Growth and Development Report 2017, 2017.

———, Inclusive Development Index 2018: Summary and Data Highlights, 2018.

World Inequality Lab, Paris School of Economics, World Inequality Report 2018, 2018.

WWF, Living Planet Report 2016 – Risk and resilience in a new era, 2016.

Wu, Yimian, 2017 In Review: China Leads World After Minting 22 New Unicorns Worth $37.3B, China Money Network, 6 December 2017.

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The Global Competitiveness Report 2018 | 23

This chapter highlights global trends, regional highlights and selected country results from the inaugural edition of the Global Competitiveness Index 4.0.

The results demonstrate a strong correlation between competitiveness and income level.1 High- income economies make up the entire top 20 (see Table 1 on page 25). Conversely, only three non-high- income economies feature in the top 40: Malaysia (25th), China (28th), and Thailand (38th). While the GCI 4.0 is not a proxy for current income, the index assesses the ability of economies to sustain growth over time. It therefore holds some predictive power. In Figure 1, economies that land relatively far above the trend line may have difficulty sustaining their current level of income without improving their competitiveness. Most of these outlying countries are mineral resource-rich. Qatar, Brunei Darussalam, Kuwait, Trinidad and Tobago, and Venezuela are the most striking examples. For example, despite having a similar level of income as Chile, Venezuela’s GCI score is almost 30 points lower. Similarly, the lowest- ranked high-income country, Argentina, lags almost 20 points behind Malaysia and China. As for economies relatively far below the trend line—including Malaysia, Mexico, Indonesia and India—the results suggest their competitiveness performance, if maintained, will promote higher and sustained levels of income in the future.

Looking at regional patterns, the top 20 of the GCI 4.0 rankings is composed almost exclusively of economies from Western Europe (10 economies), North America (2), and East Asia and the Pacific (7). In fact, East Asia and the Pacific achieves the highest median score (72.6) among all regions, slightly higher than Europe and North America (70.8). At the other end of the spectrum, 17 of the 34 sub-Saharan African economies studied are among the bottom 20 globally, and the region’s median is a low 45.2, less than halfway to the frontier. Yet the disparities within each region are profound (Figure 2). Mauritius (63.7, 49th), sub-Saharan Africa’s best performer, is nearly 30 points and over 90 places ahead of Chad (35.5, 140th). Across the seven regions, the average score gap between the best and worst performer is almost 30 points. Contrasts are often stark within sub-regions. In the EU, Germany’s overall competitiveness score (82.8, 3rd) is 20 points higher than Greece (62.1, 57th). In South-East Asia, Singapore (2nd, 83.5) is 34 points closer to the frontier than Lao PDR (49.3, 112th). In some cases, the score differential between two neighboring countries is large: approximately 20 points between the Dominican Republic (57.4) and Haiti (36.5), between Colombia (61.6) and Venezuela (43.2), and between Thailand (67.5) and Cambodia (50.2).

Finally, the breadth of the GCI 4.0 and its 12 pillars captures the extent and complexity of the competitiveness ecosystem. The results suggest that

CHAPTER 2

Regional and Country Analysis

Chapter 2: Regional and Country Analysis

24 | The Global Competitiveness Report 2018

the quality of the overall ecosystem is as good as the quality of its weakest component, which represents a binding constraint: the lowest score among the 12 pillars explains as much as 88% of the variation in the overall GCI 4.0 score. It is therefore not surprising that the most competitive economies tend to perform well on all pillars, whereas the least competitive economies tend to struggle in all areas. The lowest average pillar score of the top 10 economies is 72.2 (Product market pillar), while the highest average pillar score of the 10 least competitive economies is 54.4 (Macroeconomic stability pillar). These results reflect the need for holistic strategic planning among policy-makers and their partners. In order to increase competitiveness, no area can be neglected, because there is very limited compensability among them, although progress in one area is likely to have positive spillovers into other areas.

As Table 1 shows, the most competitive regions (Europe and North America and East Asia and the Pacific) attain the highest score across all pillars, while Sub-Saharan Africa attains the lowest scores in 10 of the 12 pillars.

Figure 2: Competitiveness gap within regions

0

20

40

60

80

100

Sub-Saharan Africa

South AsiaLatin America and the Caribbean

Middle East and North Africa

EurasiaEurope and North America

East Asia and the Pacific

Median Best performer

Worst performer Nepal

India

Haiti

Chile

Yemen

Israel

Tajikistan

Russian Federation

Bosnia and Herzegovina

United States

Lao PDR

Singapore

Chad

Mauritius

Source: World Economic Forum analysis.

Note: See the At a Glance section on page xi for regional classification. Regions are arranged according to median scores.

Best, median and worst GCI 4.0 2018 scores (0–100), by region

Figure 1: Competitiveness and income

30 40 50 60 70 80 90 4

6

8

10

12

ChileArgentina

India

Malaysia

Indonesia

Qatar

Kuwait

Thailand

Venezuela

Trinidad and Tobago

Angola Mexico

Brunei Darussalam

Sources: World Economic Forum analysis; World Bank 2018; national sources.

Note: GNI = gross national income (Atlas method), natural log transformation. 2014 data is presented for Venezuela, and 2016 data is presented for Taiwan (China). N=140, R2 = 0.82.

GNI per capita (log scale, US$, 2017)

GCI 4.0 2018 score (0–100 scale)

l High income

l Upper-middle income

l Lower-middle income

l Low income

The Global Competitiveness Report 2018 | 25

Chapter 2: Regional and Country Analysis

REGIONAL ANALYSIS The following sections provide an overview of the performance of each of the following regions (organized in alphabetical order): East Asia and the Pacific; Eurasia; Europe; Latin America and the Caribbean; Middle East and North Africa; North America, South Asia; and Sub-Saharan Africa. Each section features a brief commentary about the performance of selected economies, namely the region’s best performer and members of the top 10 and G20 if any. Economies are in order of their GCI 4.0 rank (see the At a Glance section on page xi for regional classifications). Scores cited in the following sections are on a 0–100 scale, unless mentioned otherwise. Ranks are out of 140 economies, unless mentioned otherwise. Any comparison to the past is against the 2017 ‘backcast’ edition, which was calculated using the GCI 4.0 methodology (See Appendix C for details).

East Asia and the Pacific Home to some 2.3 billion people, the East Asia and the Pacific (EAP) region is characterized by profound diversity with respect to size, development level, political and economic system, geography, culture and history. One feature common across most economies in the region has been economic dynamism, which has contributed to rapid industrialization, a rise in living standards and a drastic reduction in extreme poverty, which fell from 30% to less than 10% over just a decade.

In 2017, the EAP was the fastest-growing region in the world and accounted for about one-third of global growth, due primarily to China’s significant contribution. The region’s developing economies grew at 6.6%, owing to a favourable global economic context that encouraged a rise in exports, strong consumption and high investment.2 Nine of the region’s 10 developing economies covered in the GCI 4.0 achieved at least 3% growth in 2017, and in five—Cambodia, China, Lao PDR, the Philippines, and Viet Nam—growth exceeded 6%. The region’s seven advanced economies averaged a healthy 2.9% growth.

The results of the GCI 4.0 paint a mostly positive picture of the region’s competitive landscape, confirming the widely shared view that overall growth momentum is set to last. Yet some of the region’s economies continue to suffer major competitiveness deficits. The region’s seven advanced economies all feature in the top 20 of the GCI 4.0 rankings and three of the world’s seven most competitive economies—Singapore (83.5, 2nd), Japan (82.5, 5th) and Hong Kong SAR (82.3, 7th)—stem from the region. Most boast world-class physical and digital infrastructure and connectivity, macroeconomic stability, strong human capital and well-developed financial systems. However, performance on the innovation ecosystem is uneven. There is, for example, a 17-point score gap between Republic of Korea (78.2, 8th) and New Zealand (61.4, 27th) on the Innovation capability pillar. Still, the region’s innovation hubs—Japan, Korea,

Table 1: Regional performance, by pillar Average score (0–100)

Enabling environment Human capital Markets Innovation ecosystem

Region I n st

itu tio

n s`

In fa

st ru

ct u re

IC T a

d o p

tio n

M ac

ro ec

o n o m

ic

st ab

ili ty

H ea

lth

S ki

lls

P ro

d u ct

m ar

ke t

L ab

o u r

m ar

ke t

F in

an ci

al s

ys te

m

M ar

ke t

si ze

B u si

n es

s d

yn am

is m

In n o va

tio n

ca p

ab ili ty

East Asia and the Pacific 61.6 74.3 67.3 88.9 84.3 66.9 62.2 65.9 72.8 67.2 65.7 52.9

Eurasia 53.0 66.3 57.1 71.7 73.4 65.6 57.1 61.6 50.8 49.8 60.1 34.8

Europe and North America 64.5 78.7 68.0 91.8 90.7 74.2 62.0 66.2 69.5 59.6 68.3 58.1

Latin America and the Caribbean 47.8 61.1 46.4 74.0 82.7 57.5 53.9 55.3 59.5 52.5 52.4 33.8

Middle East and North Africa 54.3 69.0 54.1 79.6 80.0 61.4 54.7 52.3 61.8 60.3 56.7 39.9

South Asia 50.1 59.6 33.0 74.1 68.4 49.7 47.3 51.7 59.0 66.9 56.5 36.4

Sub-Saharan Africa 47.5 46.3 29.6 66.9 48.0 43.4 50.4 53.8 50.4 38.8 51.1 28.4

Source: World Economic Forum analysis.

Note: See the At a Glance section on page xi for regional classification. Darker shades indicate better performance.

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26 | The Global Competitiveness Report 2018

and Taiwan (China)—could improve on the so-called ‘softer’ drivers of innovation to attain the level of “super innovators” such as Germany, the United States and Switzerland (see the In Depth section on innovation in Chapter 1).

Among the region’s emerging markets, the picture is more diverse, with three distinct groups. Malaysia (74.4, 25th) and China (72.6, 28th) are less than 30 points to the competitiveness frontier (the highest score on the GCI) and on par with many advanced economies. The largest ASEAN economies—Indonesia, the Philippines, Viet Nam and Thailand—as well as Brunei Darussalam are 40 points or less to the frontier. Finally, Mongolia (52.7, 99th), Cambodia (50.2, 110th) and Lao PDR (49.3, 112th) are only halfway to the frontier, reflecting major weaknesses that threaten sustained growth. This makes them vulnerable to a sudden shock, such as a faster-than-expected rise in interest rates in advanced economies and escalating trade tensions, or, as in the specific case of Mongolia, lower commodity prices. The strengths of the region’s advanced economies are often weaknesses for most of the developing ones: infrastructure (average score on the Infrastructure pillar of 65.4 compared with 87.0 for advanced economies), ICT adoption (average pillar 3 score of 56.8 vs 82.4), education and skills (average score on the Skills pillar of 59.6 vs 77.2), financial system development (average pillar 9 score of 64.1 vs 85.3), and innovation capability (average pillar 12 score of 72.3 vs 39.3).

Singapore ranks second (score of 83.5) on the overall rankings behind the United States as a result of a very strong performance across the board. Singapore features in the top 10 of seven pillars and in the top 20 of a further four. Openness is the defining feature of this global trading hub and one of the main drivers of its economic success. Singapore leads the Infrastructure pillar with a near-perfect score of 95.7. In particular, it boasts world-class transport infrastructure, services and connectivity. It also tops the Product market pillar (81.2), where it leads the trade openness component. Singapore also punches well above its weight in terms of market size, when taking into account imports (71.0, 27th globally). Singapore also achieves a perfect mark in the Health pillar, thanks to a healthy life expectancy of 74 years, ahead of Japan. Singapore is a regional innovation house, but in order to become a global powerhouse, it will need to improve its ecosystem further: Skills (76.0, 20th), Business dynamism (74.7, 16th) and Innovation capability (75.0, 14th) are the three pillars—besides Market size—where Singapore scores below 80.

Japan ranks 5th overall (score of 82.5), and second in the region. It is the most improved of the top 10 economies, rising three places compared with the 2017 backcast edition. Japan appears in the top 10 of seven pillars. It ranks first in the Health pillar, and Japan’s digital (87.4, 3rd) and physical infrastructures (91.5, 5th) are top

notch. It notably ranks first on air transport infrastructure (92.5), while 93% of the adult population uses the internet on a regular basis. Japan boasts the world’s third-largest penetration rate of fiber-to-the-home internet connections (23 per 100 population), a remarkable feat given the size of the country. Japan’s two weakest pillars are Institutions (71.1, 20th)—where its performance is undermined by low levels of social capital (47.8, 95th) and relatively weak corporate governance (65.8, 40th)— and Skills (73.6, 26th), where it receives average marks for the quality of the current (63.0, 26th) and future (73.2, 55th) workforces. Japan is already an innovation hub (77.5, 6th), but it needs to nurture the ‘softer’ drivers of the innovation ecosystem in order to become a ‘super innovator’. For example, Japan scores low on several measures of entrepreneurial culture, including risk aversion (53.6, 47th) and creativity, as well as critical thinking (39.0, 70th).

Hong Kong SAR ranks 7th overall (score of 82.3) and third in Asia. Its competitiveness landscape is similar to that of Singapore, although it does slightly less well in terms of innovation and labour market efficiency. Hong Kong features in the top 10 of seven of the 12 pillars of the GCI 4.0. Remarkably, it ranks second in four pillars: Infrastructure (94.0), where it ranks first in terms of sea port infrastructure and connectivity; ICT adoption (87.9); Financial system (90.1), where it ranks first for stock market capitalization and second for stability (97.0); and Product market (79.0), where it ranks second in terms of trade openness (84.5). The main challenge for Hong Kong is to develop its Innovation capability (pillar 12), the weakest aspect of its performance (61.9, 26th).

Australia ranks 14th overall (78.9), up one spot from the 2017 backcast edition, and places fifth in the region, four places ahead of New Zealand. The country appears in the top 10 of three pillars. Notably, it shares the top spot of the Macroeconomic stability pillar (100.0). It achieves a near perfect mark on the Health pillar (98.5, 8th) and a very high score for the breadth, depth and stability of its financial system (85.6, 13th). Outside these areas, Australia’s performance shows room for improvement. The functioning of its labour market (68.5, 22nd) is notably affected by its rigidity: Australia’s innovation capacity (69.8, 18th) is ranked 20 points lower than the best performers in this category. The country does well when it comes to research and development (78.8) but struggles on the softer dimensions of the innovation ecosystem, including on the Interaction and diversity (60.8) and Entrepreneurial culture (61.6) sub-pillars.

The Republic of Korea ranks 15th overall (78.8), up two ranks compared with the 2017 backcast edition, and sixth in the East Asia and the Pacific region. The country leads the ICT adoption pillar, boasting some of the world’s highest penetration rates of ICTs. A global innovation powerhouse, Korea ranks 8th on

The Global Competitiveness Report 2018 | 27

Chapter 2: Regional and Country Analysis

the Innovation pillar. Notably, it spends the equivalent of 4.2% of GDP on R&D spending, second only to Israel (4.3%). But like some of its regional peers, Korea struggles on the less tangible drivers of innovation: critical thinking (35.5, 90th), interaction and diversity (54.5, 80th) and entrepreneurial and corporate cultures (51.3, 50th). Within this last component, Korea ranks 77th for entrepreneurial risk-taking and 88th for employee empowerment. Korea’s two weakest pillars are Product market (56.2, 67th), mostly due to the lack of domestic competition, and Labour market (62.4, 48th), due to its rigidity and sub-optimal utilization of human capital.

China ranks 28th overall (score of 72.6), leading the BRICS economies ahead of the Russian Federation (65.6, 43rd), India (62.0, 58th), South Africa (60.8, 67th), and Brazil (59.5, 72nd). As the world’s second largest economy, the largest when taking trade into account, China is now at a critical juncture as it transitions to a new phase of its economic development—referred to as the “new normal” by President Xi Jinping—in which its economy is driven less by investments and exports and more by consumption and services. In this context, the country has been increasingly betting on innovation. It has become a prominent player in some specific areas, like artificial intelligence. With a score of 64.4 (24th) it already stands above many advanced economies, but still trails leaders like Germany, the United States and Switzerland by some 20 points. In order to catch up with these ‘super innovators’, China would need to improve performance on softer drivers of innovation, such as diversity, collaboration and various aspects of openness. Other relative strengths include the Infrastructure (78.1, 29th) and ICT adoption (71.5, 26th) pillars, two remarkable achievements given the sheer size of the country. On a less positive note, China’s institutional framework (54.6, 65th) needs further improvement. Policy-makers should also offer a more level-playing field for companies by promoting domestic and foreign competition (57.4, 55th), and addressing various inefficiencies and rigidities in the labour market (59.3, 69th).

Indonesia ranks 45th overall (64.9), a gain of two places and 1.4 points compared with the 2017 backcast edition. South-East Asia’s largest economy, Indonesia ranks 4th in the region behind Singapore (2nd), Malaysia (25th), and Thailand (38th). Indonesia benefits from the very large size of its market (81.6, 8th). It is also one of the world’s most connected emerging economies (61.1, 50th), on par with many richer and much smaller economies, such as Chile and Georgia. Indonesia’s score in that category is 20 points higher than the average score of the lower-middle income group to which it belongs. This factor, combined with a quite vibrant entrepreneurial culture (61.1, 24th) and overall business dynamism (69.0, 30th) bodes well for the future. However, innovation capability remains limited

(37.1, 68th). In particular, research and development activities remain extremely limited, with R&D spending amounting to less than 0.1% of GDP (112th). Within the other pillars of the index, performance is uneven. One area of specific concern is public health. A newborn in Indonesia can expect to live only 62 years in good health, one of the lowest figures outside sub-Saharan Africa.

Eurasia Eurasia is growing at a moderate pace (slightly above 2%) and is expected to continue on this trend for the next few years. Data indicates that the region is firmly out of the 2015 recession and can look to the future with more optimism compared to the recent past. The Russian Federation, the largest economy in the region, is expected to grow at 1.7% in 2018, and China is strengthening its position as a key commercial partner for the region. The positive outlook in these two countries provides an anchor to the economic development of the region for the next few years. In addition, oil prices continuing to remain above US$60 per barrel since the fourth quarter of 2017 have contributed to the growth of two other large economies in the region (Azerbaijan and Kazakhstan). These developments have backed the improvement in macroeconomic stability of most oil-exporting countries and provided additional space in public budgets. However, the region should consider some looming risks. Among them, the gradual normalization of monetary policy in Europe and the United States is likely to increase interest rates and tighten credit conditions. In addition, the potential increase in protectionism worldwide may indirectly reduce the growth prospects of the region and increase uncertainty on commodity prices.3

In this context, Eurasia has attained a moderate competitiveness performance (58.4 out of 100). Most countries in the region achieve a GCI score between 52 and 65, and all share strong performances on health (pillar 5, 73.4), education and skills (pillar 6, 65.6) and infrastructure (pillar 1, 66.3). Yet, to secure a stronger competitiveness position, Eurasian countries should diversify their economies and work to build upon these strengths to increase their presence in higher segments of the value chain. This will require improving their financial systems and upgrading their capabilities for innovation, the two main common areas of weakness in the region. In some countries (Armenia, Azerbaijan, Georgia and Kazakhstan, for example) reforms in the labour market can also contribute to improving the allocation and retention of skilled talent, which is pivotal for absorbing new technologies and increasing value added and productivity across industries. In addition, no country in the region achieves a score above 61 on the Institutions pillar. More specifically, all countries

Chapter 2: Regional and Country Analysis

28 | The Global Competitiveness Report 2018

except Georgia score below 35 in terms of transparency. More concerted efforts should be made to reinforce this dimension across the region.

Despite sharing similar strengths and development challenges, countries in Eurasia present significant competitiveness disparities. The regional leader, Russian Federation (43rd overall) ranks 59 places ahead of Tajikistan (102nd), achieving a significantly better performance on nine out of the 12 GCI pillars. In particular, the country’s score on the ICT adoption pillar is 39.2 points better than that of Tajikistan, which translates into 83 places higher on the pillar ranking.

In fact, ICT adoption is, by far, the component of the index that reveals the greatest differences across the region. The performances of the region’s top three countries (Russian Federation, Kazakhstan and Georgia) are approximately 20 points higher than those of the least ICT-ready countries (Kyrgyz Republic, Tajikistan and Ukraine). The GCI 4.0 also registers noteworthy inequalities across the region in terms of macroeconomic stability and infrastructure. With regard to the former, Ukraine and Azerbaijan perform considerably lower than the regional average, due to double-digit inflation and increasing or high public debt. As for infrastructure, the score of the most advanced countries in the region are at least 15 points higher than those with less developed infrastructures.

The best performer in Eurasia, the Russian Federation ranks 43rd overall with a score of 65.6 out of 100. This is a slight increase from 2017. Its competitiveness performance reflects better growth prospects; the country is growing at 1.7% in 2018, the highest in over five years. The stabilization of its macroeconomic context has played a central role in this process. Following 2014–2016, during which inflation was in double digits and the economy was in a recession, inflation is now slightly above 5.4%, while government debt is low (17.7%). Relying on a more stable macroeconomic environment (87.5, 55th), Russia can better leverage its large market size (84.0, 6th), its high level of ICT adoption (72.1, 25th) and its human capital (66.3, 85th). As stated by its Strategy 2030, the country plans to focus on structural change and work to improve its export capacity and develop a stronger financial system. The limited depth of the financial system (35.0, 73rd) is one of the factors constraining the investments necessary to achieve greater breadth and sophistication of value chains. In addition, the skills of the current workforce (54.0, 53rd) should be upgraded and modernized. This will certainly benefit the country’s innovation ecosystem, which is currently penalized by a weak entrepreneurial culture (49.5, 64th) and limited interaction and diversity (43.2). The second weakest aspect of Russia’s performance after innovation is the Institutions pillar (52.7, 72nd), in which Russia is only halfway to the frontier. Among the many issues in this

area, the very low level of transparency (29.0, 113th) is of particular concern and severely undermines the quality of the business environment.

Europe When it comes to competitiveness, Europe is a story of contrasts, with four distinct groups: a very competitive north-west, including Switzerland; a relatively competitive south-west, led by France; a rising north- east region, led by Poland, Czech Republic and the Baltic countries, which rank on par with or higher than several Western European economies on several aspects of competitiveness; and the south-eastern region—in particular, the Balkan countries—which lags behind the other groups.

Real GDP growth was up for the majority of European countries in 2017, with current growth forecasts for the subset of euro area countries above 2% for 2018. While this looks like a continuation of the recovery, the situation remains fragile, as uncertainty over international cooperation and trade is dampening 2018’s growth outlook. As a result of both trade tensions with the United States and rising energy prices, the European Central Bank has recently downgraded growth forecasts for the euro area for 2018 from 2.3% in May to 2.0% (vs growth of 2.4% in 2017).4

The consequences of the 2007-2010 financial crisis still linger in the form of broken trust between a large part of the European electorate and the continent’s political elites—and more concretely in the form of continued overleveraged government balance sheets. Added fragility comes from continuing shifts in political alignment and ideology, with the appearance of a growing voter base for populist parties across Europe. In addition, Brexit remains unresolved. However, a recent positive milestone is Greece’s successful exit from the IMF loan programmes.

While recent political shifts do give much reason for concern, the continent still has basic competitiveness factors firmly in place: Europe’s public health indicators are strong across the board, including Spain at the global frontier. Education and skills outcomes are also solid. Finland tops this category globally, although these outcomes differ across the region as a whole.

Technology-related headlines coming out of Europe in the past year have mostly been related to efforts by the competition authorities to come to terms with new forms of market power exerted by platform companies and about the lack of local “unicorns”. The greatest disparities across the continent lie in national innovation ecosystems, with countries in Eastern Europe and the Balkans lacking basic innovation infrastructure while countries such as Germany define the global frontier on innovation ecosystems (Germany tops the innovation rankings in this year’s GCI). This divide extends to factors as varied as a country’s diversity of interaction

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Chapter 2: Regional and Country Analysis

(including cluster development, workforce diversity, patent applications and multistakeholder collaboration), research outcomes and commercialization opportunities. The distribution of outcomes on technology readiness is also relatively dispersed, and Europe is undeniably behind the global leader Korea. On a positive note, European economies on average fare relatively well on technology adoption.

On other factors of competitiveness, Europe is relatively far behind the global frontier when it comes to product market competition (where Singapore tops the global ranking) as well as business dynamism, where the United States ranks highest. The size of its market on the other hand represents a strong competitiveness advantage for Europe, especially in an age where economies of scale and network efficiencies are becoming ever more important.

Germany emerges as the strongest European performer in this year’s competitiveness rankings and the third-strongest globally (overall score: 82.8). The country stands out in particular for its innovation ecosystem. It ranks first globally on the Innovation capability pillar (87.5). This result is driven by a strong performance on patents (5th, 100) and research publications (3rd, 100), by top-ranked research institutions (4th, 100), and by a very high degree of buyer sophistication (66.1, 5th), leading to firms constantly being challenged by their customers to innovate.

Innovators benefit from a vibrant business sector to bring innovations to market (81.6, 2nd). Germany’s strong overall competitiveness performance is further explained by very solid fundamentals, such as a stable macroeconomic environment and a healthy, well- educated and highly-skilled population.

However, the country lags behind when it comes to ICT adoption, ranking only 31st globally with a score of 69.3. The gap is particularly marked on mobile broadband subscriptions (53rd) and on the provision of the latest ICT infrastructure in particular in terms of fiber connectivity to the home (66th).

Switzerland ranks 4th (score of 82.6) globally and second in Europe, behind Germany. It features in the top 5 of seven pillars. Switzerland is one of the world’s ‘super innovators’ (82.1, 3rd, behind Germany and the United States). The country is home to large multinationals that are often leaders in their sector, as well as a dense network of SMEs with a reputation for quality and innovation. In addition to research excellence, intense collaboration between the academic and business worlds yields innovative products with commercial applications. An array of factors supports the innovation process, including a conducive institutional framework (77.1, 5th), top-notch transport and utility infrastructure (3rd), a sophisticated and stable financial system (89.4, 4th), and a well-functioning labour market (80.4, 2nd). In this last category, Switzerland

ranks first for the soundness of its active labour market policies and the quality of industrial relations, and second for flexibility. Switzerland’s performance is adversely affected, however, by its poor showing in the trade openness category (60.5, 76th and worst among advanced economies), owing to the complexity of its tariff regime, for which it ranks last among the 140 economies studied. In terms of ICT adoption, Switzerland lags far behind the best (77.0, 15 points behind global leader Republic of Korea).

The Netherlands is the third-most competitive European economy and the sixth-best globally (82.4). The Netherlands performs particularly well on institutions (77.9, 4th), especially when it comes to checks and balances (including judicial independence, freedom of the press and government openness), protection of property rights, and ethics and transparency.

Its economy is particularly strong on openness, which manifests itself in many dimensions. The country’s open innovation environment is marked by forgiving cultural attitudes towards entrepreneurial failure, a great willingness to delegate authority, entrepreneurs who are willing to embrace disruptive ideas, and fast-growing innovative companies (71.5, 6th). In the Netherlands, businesses are as easy to set up as they are to unravel.

Capitalizing on its high population density, the Netherlands is very well-connected internally through high-quality roads, railroads and waterways, as well as externally through digital technologies and physical infrastructure such as seaports and airports (92.4, 4th on the Infrastructure pillar). All of these factors support highly competitive product markets. A final contributing factor to the country’s openness comes in terms of the mindset fostered among students. The quality of education offered is very high (84.5, 6th) and, evidently, encourages critical thinking, where the Netherlands ranks 7th globally (70.9).

The United Kingdom is the fourth-most competitive economy in Europe and eighth-strongest globally (82.0). The performance is largely explained by its traditional strengths: very well-functioning markets (78.7, 4th),

a top innovation ecosystem (79.2, 7th) and vibrant business dynamism (79.0, 7th). Notably, the country’s performance is equally strong across product, labour and financial markets. Independent of other effects of Brexit, the event will, by definition, weaken the United Kingdom’s markets component as integration with the EU is rolled back. Other factors will need to compensate. While the UK has a strong innovation ecosystem and a vibrant business sector, it currently looks less prepared than some of its peers to leverage ongoing rapid technological change. ICT adoption is also one of the weakest pillars compared to the other eleven drivers, with

the UK ranking only 28th globally (71.1). It also lags in terms of its provision of fiber to the home (75th), mobile broadband

Chapter 2: Regional and Country Analysis

subscriptions (40th) as well as the digital skills of the population (65.5, 32nd).

Sweden ranks ninth globally in this year’s index and fifth within Europe (81.7). Its performance is even across

the twelve drivers of competitiveness, with high scores and high rankings across all 12 pillars. Among its high- performing European peers, Sweden seems best prepared to leverage the opportunities brought by the accelerating technological change. The country ranks extremely high on ICT adoption (85.2, 5th), scoring highly both on levels of internet use (89.7, 14th) as well as the quality of its connectivity: 12th on mobile broadband connections, 13th on fixed broadband connection and 5th for fiber connectivity to the home. Remarkably, it ranks top globally in terms of the digital skills of its population (80.6). These high levels of tech readiness— combined with a strong performance on human capital, including education and skills (84.2, 7th) and public health (96.5, 17th)—provide a very good basis to capitalize on Sweden’s strong innovation capacity (79.8, 5th).

Denmark, one of the smallest markets in Europe, ranks tenth globally (80.6). It stands out in the region for its very well-functioning labour markets (5th, 78.0), which form the basis of a strong social contract. A pioneer of flexicurity, the country manages to reconcile an effective market economy with strong worker protection and a welfare state, notably through active labor market policies (71.4, 7th). The country provides high levels of stability both for its citizens and the business sector. It scores high on the strength of its institutions (10th, 75.9), its infrastructure (86.3, 14th) as well as it’s the stability of its macroeconomic environment (joint 1st with multiple economies). According to the perception of Denmark’s business executives, the country also has one of the highest levels of social capital in the world (64.3, 4th). Further, the labour force is extremely well educated (84.9, 5th), with the educational system scoring high on the quality of vocational as well as graduate education. Digital skills among the population are strong, and both the level and quality of connectivity are high, placing the country among the top 10 tech-ready economies globally (82.3, 8th).

Denmark’s business sector is one of the most dynamic in the world, thanks to very little red tape (the administrative burden of setting up and closing down a business is minimal) and a business culture marked by trust and collaboration as well as a willingness to embrace new ideas. Furthermore, its innovation outcomes in terms of the number of patents and trademarks are remarkable given the small size of the countr y.

France secures a place among the top twenty economies globally (78.0, 17th), having recently taken on an ambitious reform program that encompassed overhauling labour laws, reforming public services (most

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notably the national railway operator) and making the country more attractive as a destination for high-tech investment.

As a host to world-class research institutions (3rd), the country performs very well on innovation capability (76.1, 11th), and ranks among the top countries in the world in terms of the number and quality of its research publications (5th). There is scope to boost this performance further by adapting the system to the digital age. This would entail focusing on ‘soft’ innovation factors, such as encouraging critical thinking in students (44.9, 48th), embracing disruptive ideas (46.7, 45th) and developing its entrepreneurial culture. In fact, France ranks a low 84th (46.2) on the GCI in terms of its tolerance for entrepreneurial failure. Currently, France’s performance on the Interaction and diversity sub-pillar is also weaker than its peers.

In order to leverage this innovation strength, further bottlenecks need to be addressed in the area of market functioning. While labour market rigidities are being addressed, there is still a long way to go as the economy currently ranks 53rd on this dimension (61.5). Furthermore, product market functioning can be improved by reducing non-tariff barriers (53.2, 90th) and reducing services trade restrictiveness (73.6, 55th). The country’s regulatory burden is perceived to be very high by the business sector, with France ranking 107th on this indicator (31.8). The country’s performance on ICT adoption is mixed (71.1, 29th), with a high level of fixed broadband subscriptions, yet lagging on mobile broadband and fiber to the home.

Italy ranks 31st overall and 17th in Europe. The country’s GDP is growing at 1.5%, the fastest rate since the 2008’s financial crisis. Yet Italy remains the advanced economy that is growing the least. To improve its prosperity, Italy should indeed prioritize its competitiveness and growth agenda, building on its strength and addressing its weaknesses. Among Italy’s strengths, the GCI highlights excellent health conditions (99.2, 6th), large market size (79.1, 12th), a top-tier innovation capability (65.8, 22nd), and good infrastructure (83.1, 21st). To further maximize its

innovation potential Italy could further expand its ICT adoption (60.3), while the private sector should be more open to new business models and disruptive ideas (36.6) and assume a more positive risk-taking attitude (49.6). On the other hand, the improvement of Italy’s competitiveness depends primarily on the modernization of its financial system (64.3, 49th) and public-sector administration (39.9, 107th). Low performance in these

pillars translates, respectively, into insufficient resources to finance innovative investments and a high degree of red-tape that stifles business activity. In addition, macroeconomic stability (85.0, 58th) will, no doubt, be a key area of focus for policy-makers going forward. Although public finance appears to be under control,

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overall, high public debt and uncertainties on the future management of fiscal policy may further increase the cost of access to capital for the public sector and for private companies.

Turkey ranks 61st on the overall GCI 4.0, with relative strengths on infrastructure (72.6), public health (86.2) and the innovation ecosystem (50.6).

Grappling with near double-digit inflation and negative debt dynamics, Turkey’s macroeconomic woes are compounded by trade sanctions established by the United States, which has triggered even higher inflation and a currency crisis. Turkey is ranked 116th on the Macroeconomic stability pillar, with a score of 67.4.

While its innovation performance is good, with strong research institutions (34.7, 19th) and a good publication record, ideas generated by Turkey’s research community face many bottlenecks further down the value chain in terms of barriers to entrepreneurship and market functioning. Starting a business is relatively costly (93.6, 87th) and the business sector is cautious to embrace disruptive ideas (41.0, 74th). Further, the labour market is hindered by rigidities in terms of worker- employer relations (47.9, 113th), contracting (ranking 122st, with a score of 46.3 on the Redundancy costs

indicator) and meritocracy (50.5, 116th). In particular, women’s participation in the labour market is very low. For every 100 men, only 39 women are represented in the labour market.

Latin America and the Caribbean Economic growth in Latin America picked up modestly in 2017. Commodity-exporting countries such as Brazil, Argentina and Chile have benefited from high commodity prices and high global demand. Inflation has been kept in check in most countries, with the exceptions of Argentina and, to a much larger extent, Venezuela.

The region’s economic recovery remains fragile as multiple economic and geopolitical factors could jeopardize growth. Some of these risks include a rise of trade protectionism in the United States; a spillover of Venezuela’s economic and humanitarian crisis; policy uncertainty emerging from elections in the region’s largest economies, Brazil and Mexico; and disruptions from natural disasters threatening Caribbean economies still recovering from the devastating impacts of the fall 2017 hurricanes.

Strengthening institutions across the region must be a priority, as it can have far-reaching effects on the performance of other pillars (see Chapter 1). The region’s average performance on the Institutions pillar is approximately the same as that of Sub-Saharan Africa. In many countries, high levels of perceived corruption reveal an important factor undermining the strength of institutions. Security also poses a significant challenge for the region, which includes countries that rank among the least secure in the world: El Salvador (140th),

Venezuela (139th) and Honduras (136th). With eight countries in the region holding presidential elections between November 2017 and December 2018, it is unclear whether this electoral cycle will lead to new opportunities or greater challenges for the coming years.

Other notable competitiveness gaps in the region are in ICT adoption and innovation. Though several outliers stand out in each pillar, Uruguay is the country with the highest level by far of ICT adoption in the region, topping advanced economies such as Taiwan (China) and Switzerland. Interestingly, however, Uruguay’s performance on ICT has not translated to more innovation, further reinforcing the argument that innovation should be tackled with a multidimensional perspective.

For most countries, the current favourable macroeconomic conditions coupled with relatively positive economic growth may provide a window of opportunity to narrow performance gaps in other pillars—especially those requiring additional investments and popular support for competitiveness enhancing policies.

Chile ranks 33rd overall with a score of 70.3. The country is the most competitive in Latin America, ranking 1st among its peers in six out of 12 pillars. Chile’s overall performance is driven by stable macroeconomic conditions (ranking 1st with a score of 100) and a relatively well-developed infrastructure (75.2, 41st).

Chile is among the top performers on the Product market pillar (68.2, 13th), primarily as a result of lower prevalence of non-tariff barriers and relatively low measures of tariff complexity. The country is relatively weaker on ICT adoption (61.3, 49th), but nonetheless performs above the regional average. Like many of its neighbors, Chile also lags behind on innovation capability (41.3, 53rd) as a result of low performance on both research and development and research collaboration metrics.

Mexico ranks 46th globally, with a score of 64.6, and is the second most competitive Latin American economy behind Chile. The country’s competitiveness is largely driven by a stable macroeconomic environment (pillar 4 score of 99.4), and a large market size (80.6, 11th). There are other reasons to be optimistic about Mexico’s growth trajectory: it outshines other Latin American countries in terms of business dynamism (65.5, 41st) due, in part, to the relatively favourable administrative environment for businesses (82.0, 33rd).

Weaknesses in the labour market, where it ranks 100th (54.4)—in particular its rigidity (54.4, 91st) and the difficulty in attracting and retaining a talented workforce (54.8, 107th)—weigh on Mexico’s performance. The country also gets low marks on the Institutions pillar (47.7, 105th, 20 points lower than the OECD average), partly driven by a deteriorating security situation (46.0, 127th), which is characterized by violence, a high

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homicide rate and low trust in law enforcement officials. Recent corruption scandals have also contributed to the very weak performance on the Transparency sub-pillar (29.0, 113th).

Brazil ranks 72nd overall, down three places from its 2017 score. As South America’s largest economy, its score is driven by its relatively large market size (80.9, 10th) and performance on the Health pillar (79.6, 73rd). Brazil leads the region on the Innovation capability pillar (ranked 40th overall) yet remains below its potential. The poor integration of policies and the lack of coordination between the public and private sectors are among the institutional factors inhibiting its performance.

Conversely, Brazil ranks 9th in the region and 108th overall on the Business dynamism pillar with a score of 52.4. By promoting the inclusion of more businesses and firms in the innovation ecosystem, Brazil could further capitalize on its innovation potential and stimulate productivity growth. The country also fares poorly on the Product market pillar (48.9, 117th) as a result of a lack of market competition, the presence of distortive policies (subsidies), and Brazil’s poor integration to global markets—reflected in very high import tariffs (12.5% on average, 125th) and high prevalence of NTBs (136th). Labour market performance also remains one of the biggest challenges for Brazil, and performance has declined over the last year. The pillar 8 score fell from 52.8 (99th) in 2017 to 51.0 (114th) in 2018, indicating that the reforms passed in 2017 aiming to enhance labour market flexibility have yet to produce their desired effects.

Argentina ranks 81st with an overall competitiveness score of 57.5, and ranks 11th among Latin American and Caribbean economies. Argentina’s overall score is mainly driven by its human capital factors on the Health (85.1, 53rd) and Skills (68.4, 51st) pillars. Argentina also scores its highest marks on the Market size pillar (10) on which it ranks 34th overall, and 3rd in the region with a score of 68.8. A high inflation rate in 2017 (ranking 137th) has had a negative effect on the Macroeconomic stability pillar (44.9, 136th). Increased stress on the peso in 2018 is adding pressure on inflation and public debt, which may undermine the government’s recent efforts to boost Argentina’s competitiveness.

Middle East and North Africa In recent years the pace of economic reforms in the Middle East and North Africa (MENA) has accelerated, after a combination of economic, social and political factors increased the urgency to diversify the economy and broaden the benefits of growth. A prolonged period of low oil prices forced resource-rich countries to take more concrete action to re-balance their economies. Social tensions and persistently high unemployment rates throughout the region turned the attention of governments towards the creation of private sector jobs,

particularly for the youth. Some countries also faced a large influx of refugees and displaced people who left areas of conflict and instability.

After a slowdown in 2017, growth in the MENA region is expected to bounce back this year. After facing the peak of financial turmoil, oil-exporting countries are continuing to reduce fiscal imbalances—but at a slower pace. Some of them are already benefitting from reforms introduced to structurally reduce expenses (especially subsidies) and increase revenues (i.e. the introduction of VAT in some countries). This is expected to improve domestic demand and economic activity in non-oil industries, while future trends for the oil sector remain unsure due to uncertainty on both prices and production levels. The rest of the region is currently benefitting from an increase in foreign demand (in terms of both export and tourism) particularly from Europe, where growth has gained momentum in 2017.

In order to ensure the sustainability of fiscal budgets and reduce distortions in the economy, most countries have decreased subsidies on electricity, natural gas and petroleum products. Yet, these remain significant and could represent a sizeable share of public spending in case of an increase in international prices for energy products. Other reform efforts include the introduction of VAT in the Gulf Cooperation Council members, improved bankruptcy laws in the United Arab Emirates, and more flexible visa regimes for foreign workers (such as the Flexi-Permit introduced in Bahrain) or tourists (such as the visa exemption scheme implemented in Qatar).

Today, the region remains quite diverse in terms of competitiveness performance across all components of the index. Israel and the United Arab Emirates are pulling ahead, and on many dimensions outperform most of the OECD countries. The region can generally count on good transport infrastructure, but improvements are necessary, especially in terms of intra-region connectivity. With a few exceptions, macroeconomic conditions are stable in most countries, which facilitates good financing conditions for the private sector, although these are mostly funneled to larger and well-established companies. This, together with limited technological and ICT readiness, hinders the region’s capacity to innovate, currently its weakest spot on the GCI 4.0.

In spite of recent reforms, gaps remain also in terms of business dynamism and labour market efficiency. Weak insolvency frameworks are among the most urgent areas of reform for the region, as they inhibit businesses from entering the market, making appropriate investment decisions and thriving through business cycles. As a result, only five out of 15 MENA countries appear in the top half of the rankings of the Business dynamism sub-pillar: Israel (5th), United Arab Emirates (33rd), Qatar (40th), Oman (52nd) and Bahrain (54th). The segmentation of the labour market into different groups of workers, with little mobility among them, adds

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to the rigidity of the economy in most countries in the region and reduces the utilization of available talent. Only four countries appear in the top half of the rankings of the Labour market pillar: Israel (15th), the United Arab Emirates (42nd), Bahrain (46th) and Qatar (54th). The participation of women in the workforce remains low throughout most of the region, in spite of improvements in education levels, and youth unemployment is untenably high, particularly in North Africa, with levels in both Egypt and Tunisia well above 30%.

Israel leads the Middle East and North Africa with a score of 76.6 (20th globally). The country has grown to become one of the world’s innovation hubs thanks to a very strong innovation ecosystem (10th best in the world). Israel spends the most of any country in the index on R&D (4.3% of GDP), and is where entrepreneurial failure is most accepted and innovative companies grow the fastest. It can also rely on an extremely educated workforce, with an average of 13 years of schooling (8th globally) and where people acquire the appropriate skills that employers are looking for (2nd globally). This pool of talent is well integrated into the job market thanks to the low level of taxes on labour (5.9% of companies’ profits), near-equal participation of women (6th globally) and reliance on professional management (19th). A well-developed financial sector (22nd), with the second-best availability of venture capital in the world, also supports a flourishing and innovative private sector. However, the dynamism of domestic markets could be hindered by the presence of large groups (51st globally in terms of dominance of few large companies), although competition within the service sector, particularly in professional services, remains vibrant (31st).

Ranked 27th globally with a score of 73.4, the United Arab Emirates is next in the region in terms of competitiveness. The economy’s main strength lies in the quality of its enabling environment, as companies can operate under stable macroeconomic conditions (1st), make use of good infrastructure (15th) and one of the highest levels of ICT adoption in the world (6th). In all of these areas, the UAE is either at the global frontier or less than 20 points away from it. Sizeable investments in technological readiness have yet to fully turn into increased innovation capability (pillar 12), where the country lags further behind, ranking 35th globally and at only half the theoretical global frontier. The quality of the country’s human capital remains a key constraining factor, with the current workforce having on average less than 10 years of schooling and the labour market still characterized by inefficient use of the available pool of talent (61st). To fully unlock the innovative potential of its economy, the UAE should consider continuing the path of reforms to spur business dynamism and increase the efficiency of product markets, particularly in the service sector. Recent improvements of the insolvency framework represent a positive step in this direction.

Saudi Arabia ranks 39th overall with a score of 67.5 and can rely on a conducive macroeconomic environment (1st) that has weathered well the turmoil of the recent years, which have been characterized by low oil prices. It boasts a modern infrastructure (75.5, 40th) and a large market size, MENA’s largest and the 17th globally. The ambitious set of reforms included in its Vision 2030, once implemented, will increase private sector dynamism and innovation capability in the country, currently among its relative weaknesses. In particular, insolvency frameworks are currently penalizing business dynamism (51.2, 114th), while research institutions and formal education will both need to improve in order to spur the country’s level of innovation. In past years, the country has significantly increased participation in the education system and, with a school-life-expectancy of 16.9 years (18th), its future workforce is set to be one of the most educated globally. However, it will be equally important for Saudi Arabia to improve the quality of its education programs and their correspondence to the needs of the economy to ensure that graduates have the right set of skills. Finally, labour market efficiency (102nd) is impaired by a number of constraints and regulations that segment the market and decrease the overall level of efficiency and talent utilization.

North America The region is home to the United States, the GCI 4.0’s top performer, and Canada, ranked 12th. With a score of 85.6 out of 100, the United States tops the 2018 rankings of the GCI 4.0, confirming its status of most competitive economy in the world (it also ranks first in the 2017 backcast edition), although with a notable gap to the frontier. The United States appears in the top 3 of seven pillars. It leads the Business dynamism pillar, with a score of 94.1, thanks to its vibrant entrepreneurial culture. It also ranks first on the Labour market (81.9) and Financial system (92.1) pillars, due to its depth, breadth and relative stability, and achieves a near pefect score on the Market size pillar (99.2, second behind China). All these factors contribute to the country’s vibrant innovation ecosystem, making it a ‘super innovator’ (86.5, 2nd behind Germany). Although the country’s institutional framework remains very conducive (74.6, 13th), there are indications of a weakening social fabric (63.3, down from 65.5) and worsening security situation (79.1, 56th)—the United States has a homicide rate five times the average for advanced economies—as well as relatively low checks and balances (76.3, 40th), judicial independence (79.0, 15th), and transparency (75.0, 16th). Aspects of corporate governance (70.0, 22nd) could also be improved. The country also lags behind most advanced economies on the Health pillar—a consequence of the country’s unequal access to healthcare and broader socio-economic disparities.

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Healthy life expectancy is 67.7 years (46th), slightly fewer than Sri Lanka and China, three years below the average of advanced economies, and six years less than Singapore and Japan. Finally, ICT adoption is relatively low compared to other advanced economies. With a score of 71.2, the United States trails Korea by a full 20 points. Only 76% of the adult population uses the internet on a regular basis, 7% below the OECD average.

Canada ranks 12th overall with a score of 79.9, behind three Scandinavian countries: Sweden (9th), Denmark (10th) and Finland (11th). Canada’s performance across the 12 pillars is generally strong. Canada features in the top 10 of only two pillars: Macroeconomic stability, where the country has a perfect mark of 100, along with others, and Labour market (77.0, 6th). Canada’s labour market is characterized by high flexibility, combined with very strong workers’ protections and gender parity for labour force participation. The country is fairly innovative (75.0, 13th), but not yet an innovation powerhouse. It trails its neighbor and other leaders, Germany, Switzerland and Taiwan (China) by 10 points. Among the causes is the relatively low spending on R&D (1.6% of GDP, below the OECD average of 2%, and less than half the share of the biggest spenders). As for the softer drivers of innovation and competitiveness, Canada ranks first in terms of diversity (81.7). Yet its level of ICT adoption is very low (68.6, 34th) and represents the weakest aspect of Canada’s performance. The cost of mobile data and services is one of the highest among advanced economies, which hinders adoption.

South Asia South Asia continues to show strong economic growth and an improved macroeconomic outlook on the back of reforms in some of the world’s largest countries. GDP growth is expected to pick up in 2018, reaching an average of 7.1%, confirming the region as one of the world’s fastest-growing. India remains the region’s main driving force, but the acceleration is widespread and encompasses all the countries in the region, with the exception of Nepal where a slowdown is expected after the fast recovery of 2017 when the country rebounded from the aftermath of the 2015 earthquake. On average, the region is burdened by both higher levels of public debt than other emerging economies, and—in some countries—large current account deficits. However, lower commodity prices have contributed to keep inflation low and international accounts more balanced in recent years.

In spite of growing international flows, South Asia remains the region with the lowest trade penetration in the world, with imports and exports of both services and merchandise goods amounting to approximately 39% of regional GDP in 2017. It is not surprising, then, that the country in the region that is most open to foreign competition—Bangladesh—ranks only 125th on this

component of the GCI 4.0, while South Asian economies apply an average tariff rate of 15% to imports from the rest of the world. Investment flows and integration into global value chains have also, so far, been rather limited.

While some countries in the region have managed to localize segments of global industries—in terms of both services and manufactured goods—all will need to increase their innovation capacity and technological readiness in order to move towards higher value-added processes and productions. ICT adoption and innovation capability are the two areas where the region lags even further behind the rest of the world, with the region’s median performance at only one-third of the global theoretical frontier. Ranked 31st, India punches significantly above its weight in terms of innovation capability, and is an outlier in the region, with the second-best country, Pakistan, following far behind at 75th. Interestingly, these two countries demonstrate the region’s lowest levels of technological readiness, confirming the challenge for large emerging economies to fully integrate their entire population— especially those living in the most remote areas—into modernization processes.

India leads the region in all other areas of competitiveness except for health, education and skills, where Sri Lanka boasts the highest healthy life expectancy (67.8 years) and the workforce with the highest amount of schooling (9.8 years). These two countries are also the ones that can rely on the most efficient infrastructure system. India has invested more heavily on transport infrastructure and services, while Sri Lanka has the most modern utility infrastructure.

India ranks 58th (62.0) and has demonstrated sizeable improvements over the past year. Compared with the 2017 backcast edition, India is up five places, the largest gain among G20 economies. India is a remarkable example of a country that has been able to accelerate on the pathway to innovation (where it now ranks 31st, with a score of 53.8), due, particularly, to the quality of its research institutions. In spite of a high degree of entrepreneurship (61.1, 23rd), business dynamism is hampered by administrative hurdles. While Indian companies can access the 3rd largest market in the world (which translates into a perfect mark of 100.0 on the Market size pillar), the country would benefit from increased trade openness (136th) to drive productivity growth. More investments will be necessary to spur innovation beyond hubs of excellence and diffuse economic growth more broadly. This includes continuing to widen the adoption of ICT technologies (28.0, 117th) and improving the quality and conditions of human capital across the country, taking advantage of an extremely young population. India currently ranks 108th on the Health pillar and 96th on the Skills pillar of the index.

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Sub-Saharan Africa 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. After having benefitted from a period of fast growth driven by strong foreign demand and high commodity prices, economies in the region need to strengthen their fundamentals to become more resilient to commodity price shocks and to compete successfully in the technology-driven global economy. To date, Sub-Saharan Africa, with an average score of 46.2, has the lowest GCI score among all regions and demonstrates the weakest average regional performance on 10 out of the 12 pillars. In only five pillars does the average score exceed 50, including in Labour market (53.8), Product market (50.4) and Business dynamism (51.1). These factors herald the possibility to leapfrog, by more adeptly tapping into digital business models and private sector development. However, to be able to do so and to digitally-transform their economies, countries in this region need to improve quickly on ICT adoption (29.6) and human capital. For example, less than half of the adult population has access to the internet, and subscriptions to broadband telecommunication services are extremely low in most of the region’s economies. On the human capital side, the region still has the weakest health conditions in the World (46.4 on the Health pillar) while the skills of the population (43.4 on the Skills pillar) need to be updated to transform into a better-trained workforce. After successfully increasing participation in education, the next challenge for the region’s economies will be to improve the quality of teaching and provide young people with the digital and cognitive skills required by the economy of the future.

In addition, the issue of unsustainable levels of public debt is returning as a source of concern following the period 2004–2014 when public debt seemed to be shrinking. After the end of the commodity super-cycle in 2015, public revenues have decreased, but public spending did not follow suit. On average, the public debt-to-GDP ratio in Sub-Saharan Africa shot up from 32.4% in 2014 to 45.9% in 2018.5 For some countries this trend has been particularly remarkable. For example, public debt in Zambia doubled between 2014 and 2015 and is currently at 65.5% of GDP. Similarly, public debt in Angola increased from 32.9% in 2013 to 79.8% in 2016, and in Mozambique it rose from 53.1% to 118.7%. Some countries have managed to maintain control on their public finance, showing that an alternative path is possible. Notably, Botswana, with a public debt of just 15.6% and inflation at just 3%, has maintained a very stable macroeconomic environment over the past decade. Nonetheless, the difficulty of most economies in the region to adjust to lower revenues and manage fiscal policy raises questions about the sustainability of public debt, with impending consequences for the attraction

of private investments and the availability of public capital necessary to develop infrastructure, improve the education system and provide social services.

Within Sub-Saharan Africa, Southern African countries have achieved a relatively higher competitiveness performance (48.0) compared to East Africa (46.8) and West Africa (44.5). Regional differences are greater when looking at ICT adoption, Skills and Financial System pillar scores, where Southern Africa performs, on average, 8.3, 8.9 and 8.7 points higher than West Africa. These differences are even more prominent at country level. 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. Some economies have emerged as regional leaders on specific domains. Kenya, the most competitive economy in East Africa, is developing into one of the region’s strongest innovation hubs (36.5 on the Innovation capability pillar), comparable to South Africa and Mauritius. Rwanda, with a score of 64.4, leads Africa in terms of institutional quality, followed by Mauritius (62.8), Namibia (57.2) and Ghana (55.7), the most competitive economy in West Africa.

Mauritius ranks 49th globally. With a score of 63.7 out of 100 it achieves the best performance in Sub- Saharan Africa, in line with 2017. 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 Sub- Saharan 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).

South Africa ranks 67th globally—with a score of 60.8—and attains the second spot in Sub-Saharan Africa. Among its strengths, South Africa is home to a large market size (68.4), good infrastructure (68.6) and a well-developed financial system (82.1, 18th). More specifically, South Africa’s financial sector offers a

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relatively balanced access to various sources of finance, including credit (100.0, 11th), venture capital (33.0, 63rd), equity (100.0, 2nd) and insurance (100.0, 3rd). In addition, South Africa’s innovation capability is relatively advanced (44.3, 46th), although limited by insufficient research and development (37.5).

Among its weaknesses, South Africa’s performances on the Health pillar (43.2, 125th) and Security (43.7, 132nd) sub-pillar are among the worst in the world. Driven by high incidence of communicable diseases and high rate of homicides (34 per hundred population, 135th), these factors are major challenges for the economic and human development of the country.

Low ICT adoption (46.1, 85th) is another important restraint on South Africa’s competitiveness. Only 54% of the adult population has access to the internet, and only 70 out of 100 people have subscribed to mobile-broadband services (66th). Similarly, the digital skills (116th) and critical thinking skills (78th) of the current workforce are inadequate for the progress of a successful economy in the Fourth Industrial Revolution.

NOTES 1 Income level corresponds to gross national income (GNI) per

capita, as established by the World Bank for the period 2018– 2019.

2 World Bank, 2018.

3 IMF, 2018b.

4 See European Central Bank.

5 IMF, 2018b.

REFERENCES European Central Bank, Eurosystem/ECB staff macroeconomic

projections for the euro area, available at https://www.ecb.europa. eu/pub/projections/html/index.en.html.

International Monetary Fund, IMF Regional Economic Outlook: Caucasus and Central Asia, May 2018, 2018.

———, World Economic Outlook 2018, Cyclical Upswing, Structural Change, 2018.

World Bank, World Bank East Asia and Pacific Economic Update, October 2018: Navigating Uncertainty, 2018.

The Global Competitiveness Report 2018 | 37

This chapter presents the new Global Competitiveness Index 4.0 methodology. Building on the original idea of Professor Klaus Schwab and the guidance of Professor Xavier Sala-i-Martin of Columbia University, the GCI 4.0 is the culmination of a rigorous process initiated in 2015 involving extensive review of the empirical literature and numerous workshops and consultations. Dozens of experts and practitioners from academia, international organizations, NGOs, think tanks, central banks and governments provided input and feedback on conceptual and technical aspects to incorporate the newest theories and indicators into the index.1

The need to update the competitiveness index was made clear by the combination of the ongoing effects of the 2008’s Great Recession and the gathering pace of the Fourth Industrial Revolution (4IR). The Great Recession has taught us that financial crises can have long-lasting effects on productivity. Prolonged periods of under-investment caused by a financial meltdown can lower the long-run growth trajectory, setting the economic system on to a less prosperous path, even after the financial sector eventually rebounds.2 At the same time, the advent of the 4IR is producing, among other effects, an acceleration of the innovation cycle and causing business models to become obsolete at a faster rate. This process of constant creative destruction generates opportunities for new entrants and reduces the barriers to transfer technology or innovate, but also requires managing frequent industry disruptions. To respond to these challenges prosperous economies need to put in place appropriate mechanisms to reduce the risk of new financial crises and to govern the socio-economic effects of innovation. In other words, successful economies in the 4IR era need to:

• Be resilient, building buffers and economic mechanisms to prevent financial crises or mass unemployment and to respond to external shocks.

• Be agile, embracing change rather than resisting it. Companies, public policy-makers and workers should be able to quickly adapt how they operate and to take advantage of the opportunities to produce goods or provide services in new ways.

• Build an innovation ecosystem where innovation is incentivized at all levels and all stakeholders contribute to create the best conditions for new ideas to emerge, to be financed and commercialized as new products and services.

• Adopt a human-centric approach to economic development. This means recognizing that human capital is essential for generating prosperity and that any policy that adversely affects human factors’ potential will reduce economic growth in the long run. As a consequence, policy-making will

CHAPTER 3

Benchmarking Competitiveness in the Fourth Industrial Revolution: Introducing the Global Competitiveness Index 4.0

Chapter 3: Benchmarking Competitiveness in the Fourth Industrial Revolution

38 | The Global Competitiveness Report 2018

have to ensure that the speed of change and the introduction of new technologies ultimately translate into better living conditions.

Box 1 shows how to interpret the GCI 4.0 in light of these concepts.

THE GCI 4.0 FRAMEWORK The review process not only updated concepts and statistics, but also offered an opportunity to reflect on the scope of the GCI. The GCI 4.0 is focused on the institutions, policies and other factors that drive productivity.3 For, as explored in Chapter 1, productivity ultimately determines long-term economic growth, and, although there can be trade-offs between economic prosperity and environmental or social goals, raising productivity is a necessary pre-condition towards greater human development.

The Global Competitiveness Index 4.0 evaluates the factors that collectively determine the level of a country’s productivity—the most important driver of long-term improvements in living standards.4

The factors are organized into 12 pillars, and for presentation purposes they are grouped into four categories (Enabling environment, Human capital, Markets and Innovation ecosystem), as shown in Figure 1. While maintaining its predecessor’s objective, the GCI 4.0 has re-considered what determines productivity and its measurement: Of the 98 indicators, 34 have been retained from the previous methodology while the other 64 indicators are new. Appendix C presents the detailed structure of the index and the definition of each variable. The new methodology captures all the factors identified by the literature and by experts as important for productivity in the era of the 4IR.

The development of the GCI 4.0 has been guided by the emergence of new fundamental changes in the functioning of national economies with the advent of the Fourth Industrial Revolution (4IR). These concepts span across multiple factors captured by the GCI (see Figure 1). While organizing the index methodology across 12 pillars provides a clear structure for the computation of the index, and for actionable policy indications, it is also informative to look at the 12 pillars through the lens of the four meta-concepts described in this chapter: resilience, agility, innovative ecosystems and a human-centric approach. Looking at the GCI from this perspective enables interpreting the pillars as 4IR-readiness measures.

The concept of resilience is reflected in the Financial system pillar (pillar 9), which includes measures to minimize the risk of a financial meltdown and resources to adjust to external shocks. By the same token, the Macroeconomic stability pillar (pillar 4) captures the extent to which a country’s public sector can provide appropriate counter-cyclical measures and invest in projects that the private sector cannot finance. Similarly, the Skills pillar (pillar 6) captures workers’ capacity to learn and adapt to changing circumstances.

The concept of agility is present in the Domestic market competition and Entrepreneurial culture sub-pillars of the index1 because they imply greater capacity for “creative destruction”, allowing innovative companies to emerge against incumbents and rewarding a risk-taking attitude. In addition, the concept is present in the Public-sector performance sub-pillar: low levels of bureaucracy make it easier for businesses to re-organize and re-invent themselves

when legal formalities are not taxing. Labour market flexibility (another sub-pillar) implies agility through easier re-allocation of talent across sectors and firms.

The innovation ecosystem encompasses all pillars. Although business dynamism and innovation cabability are the factors impacting innovation more directly, these need to be complemented by high levels of human capital (health, education and skills); optimal allocation of skills (labour market functioning); and availability of venture capital and ad-hoc financial products (financial system development). A strong innovation ecosystem also presumes sound infrastructure, ICT readiness and institutions that allow ideas to flow and protect property rights, and a large market size that incentivizes the generation of new ideas.

The human-centric approach to development is embodied by the Health (pillar 5) and Skills (pillar 6) pillars, which together account for one-sixth of the total GCI score and take a broad approach to human capital: health is thought of as a state of complete physical, mental and social well-being, not merely the absence of disease or disabilities;2 education measures the skills humans need to thrive in the 4IR. The Labour market pillar (pillar 8) includes measures of talent reward and respect of workers’ rights, while the Innovation capability pillar (pillar 12) includes measures that capture human collaboration, interaction and creativity.

Notes

1 See the detailed structure in Appendix A.

2 This definition is based on the preamble to the World Health Organization’s Constitution. See WHO, 1946.

Box 1: Navigating the GCI 4.0 in light of the Fourth Industrial Revolution’s (4IR) key concepts

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Chapter 3: Benchmarking Competitiveness in the Fourth Industrial Revolution

Pillar 1: Institutions What does it capture? Security, property rights, social capital, checks and balances, transparency and ethics, public-sector performance and corporate governance.

Why does it matter? By establishing constraints, both legal (laws and enforcement mechanisms) and informal (norms of behaviors), institutions determine the context in which individuals organize themselves and their economic activity. Institutions impact productivity, mainly through providing incentives and reducing uncertainties.5

Pillar 2: Infrastructure What does it capture? The quality and extension of transport infrastructure (road, rail, water and air) and utility infrastructure.

Why does it matter? Better-connected geographic areas have generally been more prosperous. Well-developed infrastructure lowers transportation and transaction costs, and facilitates the movement of goods and people and the transfer of information within a country and across borders. It also ensures access to power and water—both necessary conditions for modern economic activity.

Pillar 3: ICT adoption What does it capture? The degree of diffusion of specific information and communication technologies (ICTs).

Why does it matter? ICTs reduce transaction costs and speed up information and idea exchange, improving efficiency and sparking innovation. As ICTs are general purpose technologies increasingly embedded in the structure of the economy, they are becoming as necessary as power and transport infrastructure for all economies.

Pillar 4: Macroeconomic stability What does it capture? The level of inflation and the sustainability of fiscal policy (see Box 2 for further explanation).

Why does it matter? Moderate and predictable inflation and sustainable public budgets reduce uncertainties, set returns expectations for investments and increase business confidence—all of which boost productivity. Also, in an increasingly interconnected world where capital can move quickly, loss of confidence in macroeconomic stability can trigger capital flight, with destabilizing economic effects.

Pillar 1 Institutions

Pillar 2 Infrastructure

Pillar 3 ICT adoption

Pillar 4 Macroeconomic stability

Human Capital

MarketsEnabling Environment

Pillar 7 Product market

Pillar 8 Labour market

Pillar 9 Financial system

Pillar 10 Market size

Innovation Ecosystem

Figure 1: The Global Competitiveness Index 4.0 2018

Pillar 5 Health

Pillar 6 Skills

Pillar 11 Business dynamism

Pillar 12 Innovation capability

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40 | The Global Competitiveness Report 2018

The Macroeconomic stability pillar (pillar 4) aims to measure the main factors impacting countries’ competitiveness via the investment decision channel. It is based on two indicators: Inflation (4.01) and Debt dynamics (4.02). The importance of inflation for economic stability is well grounded in literature and policy—inflation is an explicit target of monetary authorities who aim at keeping it within a certain range (the target of European Central Bank, US Federal Reserve, Bank of Japan and Bank of England is 2%). Debt dynamics aims to approximate the sustainability of public finance. Its computation is relatively complex and requires adopting goalposts that are not fully established in the literature. This box explains its conceptual idea and its implementation in the context of the GCI.

Over the past three decades, economists have been debating whether high public debt matters for economic development. There is consensus that countries cannot sustain unlimited amounts of debt—it would clearly be unsustainable if, for instance, interest payments were to exceed GDP—but there is no consensus on the level of debt at which countries’ economies begins to suffer. Some economists believe that negative effects on long-term growth kick in when debt reaches around 100% of GDP.2 Others have found no causal relationship between debt and economic growth,3 making it hard to define a particular level of debt at which a country’s growth would start to decline.

The lack of consensus around the level beyond which public debt becomes too large suggests the need for taking into account other factors. The new indicator draws on the debt dynamic literature4 and assesses a country’s debt change based on four elements:

• Debt-to-GDP levels, to control for the initial level of debt (Source: IMF’s World Economic Outlook)

• Projected change in debt, to control for how much the debt of a country is growing (Source: IMF’s World Economic Outlook)

• Country credit ratings, to capture qualitative and confidence aspects (Sources: Fitch, S&P, Moody’s)5

• A country’s development status, based on whether the IMF categorizes it as either “Advanced” or “Emerging/ Developing”

Each country is assigned into a bracket, based on its credit rating, debt level and development status. The Debt dynamics indicator is computed by applying different normalization thresholds according to the bracket to which a country is assigned. Table 2.1 below summarizes the details of the methodology. Within each bracket, the exact score depends on the absolute change in debt level. If there is no change or debt is decreasing, the score is the upper-bound value. If the increase is of 20 percentage points or more, the score is the lower-bound value. Between the extreme values, the score is obtained by interpolation:

upper � (upper � lower) � debt change

20 score �

For example, consider a developing country whose rating is defined as “speculative”, the debt-to-GDP ratio is below 50% and the debt change is 20. Based on the methodology detailed in Table 2.1, this country will receive a score of 50. Had the same developing country registered a debt change of 10 its score would have been 55.

This methodology has the merit of incorporating all relevant information in one indicator. However, we acknowledge some limitations that depend on lack of data6 and definition of thresholds. In particular, because of lack of sufficient data availability, this indicator does not take into account the size and liquidity of public assets. Everything else being equal, the debt of countries with larger and more liquid public assets, should be more sustainable.7 Although this information is partially reflected in credit ratings, using “net debt” (gross debt minus public assets) would be beneficial. Also, the debt dynamics indicator should consider

Case Lower and upper bounds used to normalize debt change

Credit rating “Default” 0 < Score < 30

Credit rating “n/a”—High debt 30 < Score < 40

Credit rating “n/a”—Low debt 40 < Score < 50

Credit rating “Speculative”—Developing country—High debt ( >60%) 30 < Score < 40

Credit rating “Speculative”—Developing country—Low debt (< 60%) 40 < Score < 50

Credit rating “Speculative”—Advanced country—High debt (>110%) 40 < Score < 50

Credit rating “Speculative”—Advanced country—Low debt ( <110%) 50 < Score < 60

Credit rating “Investment 2”—High debt ( >110%) 60 < Score < 70

Credit rating “Investment 2”—Low debt ( <110%) 70 < Score < 80

Credit rating “Investment 1”—High debt ( >110%) 80 < Score < 90

Credit rating “Investment 1”—Low debt ( <110%) 90 < Score < 100

Credit rating “Investment 1”—Very low debt ( <60%) 100

Box 2: Debt dynamics in the Macroeconomic stability pillar1

(Continued)

Table 2.1: Cases for computing Debt dynamics (indicator 4.02) score

Pillar 5: Health What does it capture? Health-adjusted life expectancy (HALE)—the average number of years a newborn can expect to live in good health.

Why does it matter? Healthier individuals have more physical and mental capabilities, are more productive and creative, and tend to invest more in education as life expectancy increases. Healthier children develop into adults with stronger cognitive abilities.

Pillar 6: Skills What does it capture? The general level of skills of the workforce and the quantity and quality of education. While the concept of educational quality is constantly evolving, important quality factors today include: developing digital literacy, interpersonal skills, and the ability to think critically and creatively.

Why does it matter? Education embeds skills and competencies in the labour force. Highly- educated populations are more productive because they possess greater collective ability to perform tasks and transfer knowledge quickly, and create new knowledge and applications.

Pillar 7: Product market What does it capture? The extent to which a country provides an even playing field for companies to participate in its markets. It is measured in terms of extent of market power, openness to foreign firms and the degree of market distortions.6

Why does it matter? Competition supports productivity gains by incentivizing companies to innovate; update their products, services and organization; and supply the best possible products at the fairest price.

Pillar 8: Labour market What does it capture? It encompasses “flexibility”, namely, the extent to which human resources can be re- organized and “talent management”, namely, the extent to which human resources are leveraged.

Why does it matter? Well-functioning labour markets foster productivity by matching workers with the most suitable jobs for their skillset and developing talent to reach their full potential. By combining flexibility with protection of workers’ basic rights, well-functioning labour markets allow countries to be more resilient to shocks and re-allocate production to emerging segments; incentivize workers to take risks; attract and retain talent; and motivate workers.

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Chapter 3: Benchmarking Competitiveness in the Fourth Industrial Revolution

the proportion of the debt denominated in foreign currency— which raises the risk of an exchange rate depreciation increasing the country’s interest’s bill, a particular concern for many developing countries8 –and the proportion of the debt owed to foreigners, which is riskier because governments cannot tax non-citizens.9 With respect to the definition of thresholds, the empirical evidence on the impact of different levels of debt on its sustainability is inconclusive. As a consequence we base our definition on the statistical distribution of the current cross-country distribution of debt-to-GDP ratio. Given the large confidence intervals in determining thresholds, we have been conservative in calibration, with most countries attaining a score of 30 or higher. As new data and new empirical evidence become available, the methodology will be revised accordingly.

Despite these limitations this indicator provides a practical way to assess a country’s fiscal situation more accurately than just its current debt-to-GDP ratio, or a combination of public debt level and budget balance.

Notes

1 We would like to thank Ugo Panizza, Professor, International Economics, Pictet Chair in Finance and Development, Graduate Institute of International and Development Studies, Geneva, for his comments and suggestions.

2 See, among others, Reinhart and Rogoff, 2010; Kumar and Woo, 2010; Cecchetti, Mohanty and Zampolli, 2011.

3 See, for example, Panizza and Presbitero, 2012, or Égert, 2015.

4 For a formal definition refer to Escolano 2010.

5 The general credit rating for each country is computed as the average of Fitch, Standards and Poor’s (S&P) and Moody’s credit ratings. A country’s rating is considered “investment grade 1” for S&P’s grades AAA to A, Moody’s grades Aaa to A1, and Fitch’s grades AAA to A. A country’s rating is considered “investment grade 2” for S&P’s grades A- to BBB-, Moody’s grades Baa3 to

Baa1, and Fitch’s grades A- to BBB+. A country’s rating is con- sidered “speculative” for S&P’s grades BB+ to CCC+, Moody’s grades Ba3 to Caa2, and Fitch’s grades BBB- to B-. A country credit rating is considered “default” for S&P’s grade SD, Moody’s grades Caa1 and C, and Fitch’s grades CC and RD.

6 IMF, World Economic Outlook provides information on net debt for 84 countries, and World Bank’s Quarterly Public Sector Debt database provides information on public debt in foreign currency for 41 economies.

7 Notably, the government of Singapore issues bonds that are entirely invested in other assets. Singapore‘s bonds are issued to develop the domestic debt market rather than to finance the bud- get deficit.

8 Eichengreen, Hausmann and Panizza, 2002.

9 Gros, Daniel, 2011.

Box 2: Debt dynamics in the Macroeconomic stability pillar1 (cont’d.)

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42 | The Global Competitiveness Report 2018

Pillar 9: Financial system What does it capture? The depth, namely the availability of credit, equity, debt, insurance and other financial products, and the stability, namely, the mitigation of excessive risk-taking and opportunistic behavior of the financial system.

Why does it matter? A developed financial sector fosters productivity in mainly three ways: pooling savings into productive investments; improving the allocation of capital to the most promising investments through monitoring borrowers, reducing information asymmetries; and providing an efficient payment system. At the same time, appropriate regulation of financial institutions is needed to avoid financial crises that may cause long-lasting negative effects on investments and productivity.

Pillar 10: Market size What does it capture? The size of the domestic and foreign markets to which a country’s firms have access. It is proxied by the sum of the value of consumption, investment and exports.

Why does it matter? Larger markets lift productivity through economies of scale: the unit cost of production tends to decrease with the amount of output produced. Large markets also incentivize innovation. As ideas are non-rival, more potential users means greater potential returns on a new idea. Moreover, large markets create positive externalities as accumulation of human capital and transmission of knowledge increase the returns to scale embedded in the creation of technology or knowledge.

Pillar 11: Business dynamism What does it capture? The private sector’s capacity to generate and adopt new technologies and new ways to organize work, through a culture that embraces change, risk, new business models, and administrative rules that allow firms to enter and exit the market easily.

Why does it matter? An agile and dynamic private sector increases productivity by taking business risks, testing new ideas and creating innovative products and services. In an environment characterized by frequent disruption and redefinition of businesses and sectors, successful economic systems are resilient to technological shocks and are able to constantly re-invent themselves.

Pillar 12: Innovation capability What does it capture? The quantity and quality of formal research and development; the extent to which a country’s environment encourages collaboration, connectivity, creativity, diversity and confrontation across different visions and angles; and the capacity to turn ideas into new goods and services.

Why does it matter? Countries that can generate greater knowledge accumulation and that offer better collaborative or interdisciplinary opportunities tend to have more capacity to generate innovative ideas and new business models, which are widely considered the engines of economic growth.

COMPUTATION OF THE GCI 4.0 Of the 98 indicators composing the GCI 4.0 methodology, 44 are sourced from the Forum’s Executive Opinion Survey (see Appendix C), and 54 are based on statistics provided by reliable external sources suppliers. The indicators were selected based on four principles. First, they need to adequately capture the concept identified by the review. Second, external statistics have to come from trusted organizations that collect data according to high-quality standards. Third, it must be expected that the data will be updated periodically in the future. Fourth, data must have extensive geographical coverage and be available for at least 75% of the economies covered by the GCI.

As well as redefining concepts and measures, the GCI 4.0 review updated the computation methodology, including how indicators are aggregated, scores are normalized and missing data is treated.

Aggregation and weights The GCI 4.0 computation is based on successive aggregations of normalized scores from indicators (the most disaggregated level) all the way up to the overall GCI score. Pillar and GCI scores are expressed on a 0 to 100 scale and are interpreted as “progress scores”, indicating how close a country is to the ideal state.

The overall GCI score is the simple average of the 12 pillars, so each pillar’s implicit weight is 8.3% (1/12). The four components presented in Figure 1 (Enabling Environment, Human Capital, Markets and Innovation Ecosystem) are used only for presentation purposes and do not enter into the calculation. The “stage of development”7 weighting scheme from previous versions of the GCI is no longer used. Instead, the same aggregation methodology is now applied to all countries. The rationale is that as the 4IR proceeds, all competitiveness factors will have a similar bearing on countries’ competitiveness, regardless of their income levels. Automation will possibly reduce the feasibility of developing a country relying on low labour costs in manufacturing. Rodrik (2015), for example, showed that growth in many developing countries is led by services, while newly industrializing countries start to de-industrialize much earlier than has been the case for Western countries. At the same time, ICTs are reducing information barriers and enabling rapid transfer of ideas, technologies and intangible products across

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Chapter 3: Benchmarking Competitiveness in the Fourth Industrial Revolution

We define competitiveness as the set of institutions, policies and factors that determine a country’s level of productivity. If the GCI 4.0 is a good measure of competitiveness, then it should be strongly correlated with productivity levels. This analysis provides evidence that it is indeed the case.

If we knew the level of productivity for each country, the test would be simple: we would regress the GCI 4.0 on that measure of productivity and verify that its coefficient is positive and statistically significant. Lacking good measures of productivity levels, economists revert to use productivity growth. Following Solow (1957) they define total factor productivity (TFP) as the portion of GDP growth not explained by inputs of labour and capital, and compute TFP as the difference between GDP growth, the growth rate of capital (times the capital share), and the growth rate of human capital (times the human capital share). However, as we are interested in productivity level rather than in productivity growth we cannot follow this approach.

Hall and Jones (1999) tried to measure the level of productivity in a large cross-section of countries by subtracting the level of capital and the level of human capital from the level of GDP. That is, assume that the production function takes a Cobb-Douglas form: Yit = Ait Kit

a

Lit 1–a where Yit is GDP for country i at time t, Kit is the capital stock for country i at time t, Lit is

the level of human capital for country i at time t, and a is the capital share (so 1  a is the labour share). Then we can take logarithms of both sides and get ln(Yit) = ln(Ait) + aln( Kit ) + (1  a)ln( Lit). We could find a measure of ln(Ait) by subtracting aln( Kit ) + (1  a)ln( Lit) from both sides to get ln(Ait) = ln(Yit)  aln( Kit ) + (1  a)ln( Lit).

However, data limitations prevent us from using this methodology. We have good data on GDP, so the first term can be easily estimated for many countries, but we would also need good measures of each economy’s aggregate capital stock and aggregate human capital. This is an almost impossible task, especially because we would need to measure not only the quantity of capital (both physical and human) but also its quality. Some studies have attempted to estimate these measures for a small sample of countries, but the estimates depend on a number of unrealistic assumptions and are not reliable.

The economic growth literature offers a simple alternative that requires only data on GDP: the conditional convergence regression developed by Mankiw, Romer and Weil (1992) and Barro and Sala-i-Martin (1992, 2004). The level of productivity determines the rate of return of an economy, and hence its growth rate; in other words, most growth theories—including the neo-classical growth theories of Solow-Swan or Ramsey-Cass-Koopmans—predict that the productivity level not only determines the level of income (as shown in the production function displayed above) but also its growth rate.1

Proceeding in three steps, then, we can derive a statistical theory that will tell us exactly what needs to be tested. First, we start from the fundamental equation of the Solow-Swan theory of growth.2 According to this theory, the growth of capital stock per person (k) is a function of the saving rate (s), GDP per capita (y), population growth (n) and capital depreciation (). Using the Solow -Swan formulation, and recalling that y = f(k), this is:

k · it = si f (Aitkit)  (ni + i) (1)

Second, taking a log-linear transformation of equation (1), and using Taylor approximation,3 we can find that economic growth (GDP growth) is a negative function of the initial level of per capita income (GDP) of a country and its steady-state4 level of income per capita. This is:

it,t+T = b0  b1ln(yit) + b2ln(yi*) + it (2) where it,t+T is the average annual growth rate of GDP per person for country i between times t and t+T, yit is the per capita GDP for country i at time t and yi* is the steady-state level of per capita GDP for country i and it is an error term. Equation (2) is a conditional convergence regression. It posits that the growth rate of capital per person is a function of the difference between the initial level of income (that is, everything else being equal, poor countries should grow faster, a phenomenon known as the “convergence effect”) and the steady-state level of income (that is, holding everything else constant, countries that grow towards a higher target should be growing faster).

Third, we identify a proxy for the steady-state level of income per capita (y*). This depends on the theory of growth. Using a Solow-Swan model with a Cobb-Douglas production function (see note 1), constant savings rate s, a constant rate of population growth n and a constant depreciation rate , the steady state capital stock is given by ki* = [si Ai +ni ]

1/(1–�).

Consequently the steady state level of GDP per capita is yi* = Ai1/(1- ) [ si+ni] /(1- ) .

Taking logs, we obtain:

ln(yi*) = ln(Ai) + 1 1– 1–

ln( si +ni

) (3)

Hence, plugging (3) into (2) and replacing A with GCI we have:

�it,t+T = �0 – �1 ln(yit) + � ~

2 ln(Ai) + � ~

2 si +ni

) + �it1– ln( (4)

Box 3: Is the GCI 4.0 a valid measure of productivity? A formal statistical test

(Continued)

Chapter 3: Benchmarking Competitiveness in the Fourth Industrial Revolution

44 | The Global Competitiveness Report 2018

(Continued)

Where: � ~

= �2� 1

1–

Equation (4) says that the growth rate of GDP per capita is a (negative) function of the initial level of per capita GDP and a positive function of the level of productivity. It is also a positive function of the savings rate and a negative function of the depreciation rate and the rate of population growth. Ignoring any of these terms would bias our estimates if the ignored terms are correlated with the right hand side variables. However, the consumption literature shows that the savings rate is uncorrelated with income. The population growth rate is slightly negatively related to income (population growth is the sum of fertility minus mortality, or births minus deaths, and net migration; rich countries have lower fertility but also lower mortality, or larger life expectancy, and larger migration rates). Hence we believe that omitting

yi* = Ai

�2 si +ni

) 1–

ln( and putting it in the error term should not bias our estimates of b1 and b

~ 2, and estimate the equation:

�it,t+T = �0 – �1 ln(yit) + � ~

2 ln(Ai) + wit (5)

Equation 5 says that the growth rate of GDP per capita between time t and time t+T is a negative function of the initial level of GDP per capita and a positive function of productivity. Notice that to estimate this growth equation we need to hold constant both ln(yit) and ln(Ai). If we omit ln(Ai) and this term turns out to be correlated with ln(yit), then our estimates of b1 will be biased towards zero. Similarly, if we regress growth on ln(Ai), ignoring ln(yit), we will also tend to find that b2 is biased towards zero. The correct equation is, therefore, a bivariate regression where both ln(Ai) and ln(yit) are held constant.

If, as we claim, the GCI estimate for country i is a good proxy for Ai, when we substitute the GCI for Ai in equation (5), we get:

�it,t+T = �0 – �1 ln(yit) + � ~

2 ln(GCIi) + wit (6)

Hence, if the GCI is a good proxy for the level of productivity, then when we regress the growth rate of GDP per capita between t and t+T on the level of GDP per capita at time t and the GCI, we should get a negative coefficient on the initial level of GDP and a positive one on the GCI.

We apply this test for the period 1998 to 20185 by running the following regression:

= �0 – �1 logGDPpci,1998 + � ~

2 logGCIi,2018 + �i,t �log (GDPpc)i,1998–2018

20 (7)

Where �log (GDPpc)i,1998–2018

20 is the annual growth rate in each country i 6 computed as the difference in log GDP per capita

(PPP terms) between 1988 and 2018, logGCI is the log in the index score for the year 2018, and logGDPpc is GDP per capita in PPP terms in 1988.

If we are correct, we should find b ~

2 to be positive and b1 to be negative. Table 3.1 reports the results of the estimation of equation (7) with the ordinary least squares. We find that the coefficient

on the log of GCI is 0.0969 with a standard error of .015 and a t-statistic of 6.42, while the coefficient on the log of the initial (i.e. 1988) level of income is –0.37 with a standard error of 0.002 and the t-statistic is –9.04. Both achieve a significance level of 99%. This validates our hypothesis: the GCI is indeed highly correlated to productivity.

Box 3: Is the GCI 4.0 a valid measure of productivity? A formal statistical test (cont’d.)

Table 3.1: GCI and productivity test result

Dependent variable Annual GDP growth between 1998 and 2018

Log (GCI 4.0, 2018) 0.0969*** (0.015)

Log (GDP per capital, 1998) –0.0186*** (0.002)

Constant –0.205*** (0.046)

Observations 137

R-squared 0.489

Note: Cross-section OLS (Ordinary Least Square) regression estimated with robust standards of error. Observations correspond to the countries covered by the GCI. In addition, *** denotes p-value < 0.01. Standards of error are in parentheses.

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Chapter 3: Benchmarking Competitiveness in the Fourth Industrial Revolution

Figure 3.1. Correlation between GCI 4.0 and net growth rate

Log GCI 4.0

Net growth rate

3.50 3.75 4.00 4.25 4.50

0.2

0.3

0.4

0.5

Note: Adjusted R2 = 0.70.

To visualize these results in a graph, we can plot the partial correlation between the net growth7 and the GCI, which is the growth rate netted out of the convergence factor. Figure 3.1 shows that there is a strong correlation between the GCI and the net growth rate, providing a visual demonstration of the statistical test provided above.

Notes

1 In both Solow-Swan and Ramsey growth models the growth rate depends on A. In fact, with Cobb-Douglass production function,

y = Aka, and y· = (1  a)g  ak· where g is the growth rate of A, a is the capital share and is k·it = sAitk a

it  (n  ).

2 We could also use the Ramsey-Cass-Koopmans theory as a guide. As shown by Barro and Sala-i-Martin (1992) and Barro and Sala-i- Martin (2004) Chapter 2 and Chapter 12, the end result is identical although the derivation is a bit more complicated.

3 For a derivation refer to Barro and Sala-I-Martin, 1992; and Barro-Sala-i-Martin, Economic Growth, second edition, MIT Press, 2004, p. 57.

4 The steady state is a situation in which the growth of capital per unit of effect labor is 0(k·) and exogenous variables grow at a constant rate. The steady-state level of per capita GDP is, in a way, the target towards which the economy is going.

5 For 2017 and 2018 data we use IMF estimates.

6 i corresponds to 137 country observations available for the GCI 2018; GDP per capita data is obtained from IMF Word Economic Outlook 2018, April edition.

7 Technically the net growth rate is computed as: � � 1 logGDPpci,1998 net growth =

�log (GDPpc)i,1998–2018 20

 b ^ , where b

^ is the

estimated parameter obtained from regression (5).

Box 3: Is the GCI 4.0 a valid measure of productivity? A formal statistical test (cont’d.)

the globe, opening new opportunities for developing economies. Drawing from these learnings the GCI 4.0 is less prescriptive about the path to prosperity, rewarding countries that leapfrog, and penalizing those that neglect any aspect of competitiveness, regardless of their stage of development.

Normalization of scores The normalization of all 98 individual indicators in the GCI 4.0 is based on a min-max approach. Each indicator’s value is converted into a unit-less “progress score” ranging from 0 to 100. These normalized scores are then combined to produce pillar and index scores. Formally, we have:

score i,c � �� � value i,c � wpi�

�

frontieri � wpi 100,

Chapter 3: Benchmarking Competitiveness in the Fourth Industrial Revolution

46 | The Global Competitiveness Report 2018

where valuei,c is the raw value of country c for indicator i; wpi (worst performance) is the value at, or below which the score is 0; and frontieri is the value corresponding to the ideal value at or above which the score is 100. Depending on the indicator, this may be a policy target or aspiration, the maximum possible value, or a number derived from statistical analysis of the distribution (90th or 95th percentile). If a value is below the worst performance, its score is 0; if a value is above the frontier value, its score is capped at 100.

In the case of indicators where a higher value corresponds to a worse outcome (e.g. Terrorism incidence to power losses), the normalized score becomes 100  a, so 100 always corresponds to the ideal outcome.

The “progress score” shows the level attained by a country in any given year with respect to the frontier set in the 2018 edition, and it informs on how a country moves towards or away from the frontier over time. Table 2 in Appendix C reports the wpi and frontieri scores.

Imputation In the GCI 4.0 methodology, the missing data points are imputed.8 Approximate estimates are preferred to missing values because, in arithmetic means, the number of indicators included implicitly defines the weight of each indicator. Consequently, imputation avoids assigning greater weight to available indicators in a category that contains missing values. It is also hoped that this approach will encourage the production of reliable statistics.

The imputation method for each indicator is based either on econometric models or on the performance of peer countries.9 Imputation estimates based on regression methods correspond to the predicted value of a cross-country ordinary least-squared regression using an indicator-specific set of regressors. These are selected based on their correlation with the non- missing values of the dependent variable. Peer country imputation consists of using the average score of a peer group to fill in missing values of countries in that group for a specific indicator. Imputed values are used for the purpose of the computation but are not ranked and not reported in the ranking tables. Imputed values and description of the imputation method for each indicator are provided in Table 1 of Appendix C.

As a result of these conceptual, statistical and methodological updates, the GCI 4.0 is an improved measure of countries’ productivity levels. Statistical evidence of the soundness of the GCI as a productivity measure is provided in Box 3.

NOTES 1 See World Economic Forum, 2017, pages 359–360.

2 This idea incorporated the concept of hysteresis (see for instance Dixit, 1992).

3 This definition can be considered an extension of Hall and Jones’s idea of social infrastructure: “Our hypothesis is that differences in capital accumulation, productivity, and therefore output per worker are fundamentally related to differences in social infrastructure across countries. By social infrastructure we mean the institutions and government policies that determine the economic environment within which individuals accumulate skills, and firms accumulate capital and produce output”.

4 Economic literature recognizes productivity (total factor productivity) as the main factor explaining income differences across countries and growth perspectives. See Mankiw, Romer and Weil, 1992; Hall and Jones, 1999; Barro, 1996; and OECD, 2016.

5 For a detailed and comprehensive literature review of the empirical literature underpinning the selection of indicators for the GCI 4.0, refer to World Economic Forum, 2015.

6 We focus on the distortionary effect of taxes on productivity rather than their redistribution effect.

7 The previous GCI methodology applied different weights to different factors to countries according to income per capita and mineral exports. For more details refer to Global Competitiveness Report, 2017–2018, pp. 320–322.

8 Missing values in the “Railroad density” and “Liner shipping connectivity index” indicators are not imputed when a country has strategically decided not to develop a railroad network or is land- locked, respectively.

9 Peer groups of countries are defined in terms of the combination of their region and income level. The income levels are low income, upper-middle income, lower-middle income, and high income, and are based on World Bank’s classification. Regions are: South Asia, Europe, Middle East & North Africa, Sub-Saharan Africa, Latin America & Caribbean, Eurasia, East Asia & the Pacific, and North America, and are based on the IMF’s classification.

REFERENCES Abdih, Yasser and Stephan Danninger, Understanding U.S. Wage

Dynamics, IMF Working Paper 18/138, International Monetary Fund, 2018.

Baharumshah, Ahmad Zubaidi, Siew-Voon Soon and Evan Lau, “Fiscal sustainability in an emerging market economy: When does public debt turn bad?,” Journal of Policy Modeling, vol. 39, no. 1, 2017, pp. 99–113.

Barro, Robert J. Determinants of Economic Growth: A Cross-Country Empirical Study, MIT Press, 1996.

Barro, Robert J. and Xavier I. Sala-I-Martin, Economic Growth, 2nd edition, MIT Press, 2004.

———, “Convergence”, Journal of Political Economy, vol. 100, no. 2, 1992, pp. 223–251.

Cecchetti, Stephen, Madhusudan Mohanty and Fabrizio Zampolli, The real effects of debt, BIS Working Papers 352, Bank for International Settlements, 2011.

Dembiermont, Christian, Michela Scatigna, Robert Szemere and Bruno Tissot, A new database on general government debt, Bis Quarterly Review, 2015, https://www.bis.org/publ/qtrpdf/r_qt1509g.htm.

Dixit, Avinsh, “Investment and Hysteresis”, Journal of Economic Perspectives, vol. 6, no. 1, 1992, pp. 107–132.

Égert , Balázs, “Public debt, economic growth and nonlinear effects: Myth or reality?”, Journal of Macroeconomics, vol. 43, no. C, 2015, pp. 226–238.

The Global Competitiveness Report 2018 | 47

Chapter 3: Benchmarking Competitiveness in the Fourth Industrial Revolution

Eichengreen, Barry, Ricardo Hausmann and Ugo Panizza, Original Sin: The Pain, the Mystery and the Road to Redemption, paper presented at a conference on Currency and Maturity Matchmaking: Redeeming Debt from Original Sin, Inter-American Development Bank, 2002.

Escolano, Juliano, A Practical Guide to Public Debt Dynamics, Fiscal Sustainability, and Cyclical Adjustment of Budgetary Aggregates, Technical Notes and Manuals No. 2010/02, International Monetary Fund, 2010, https://www.imf.org/en/Publications/TNM/ Issues/2016/12/31/A-Practical-Guide-to-Public-Debt-Dynamics- Fiscal-Sustainability-and-Cyclical-Adjustment-of-23498.

Fedelino, Annalisa, Anna Ivanova and Mark Horton, Computing Cyclically Adjusted Balances and Automatic Stabilizers, IMF Technical Guidance Note No. 5, International Monetary Fund, http://www.imf.org/external/pubs/ft/tnm/2009/tnm0905.pdf.

Gros, Daniel, External versus Domestic Debt in the Euro Crisis, CEPS Papers No. 5677, Centre for European Policy Studies, 2011.

Hall, Robert E. and Charles I. Jones, “Why Do Some Countries Produce So Much More Output Per Worker Than Others?”, The Quarterly Journal of Economics, vol. 114, no. 1, 1999, pp. 83–116.

Kumar, Manmohan S. and Jaejoon Woo, Public Debt and Growth, Working Paper N0. 10/174, International Monetary Fund, 2010.

Mankiw, N. Gregory, David Romer and David N. Weil, A Contribution to the Empirics of Economic Growth, NBER working paper no. 3541, National Bureau of Economic Research, 1992.

OECD, The Productivity-Inclusiveness Nexus: Meeting at the OECD Council at Ministerial Level, Paris, 1-2 June, 2016.

Panizza, Ugo and Andrea Filippo Presbitero, Public Debt and Economic Growth: Is There a Causal Effect?, Mo.Fi.R. Working Papers 65, Money and Finance Research group (Mo.Fi.R.), Univ. Politecnica Marche, Department of Economic and Social Sciences, 2012.

Reinhart, Carmen M. and Kenneth S. Rogoff, “Growth in a Time of Debt”, American Economic Review, vol. 100, no. 2, 2010, pp. 573–78.

Rodrick, Dani, Premature Deindustrialization, NBER Working Paper No. 20935, National Bureau of Economic Research, 2015.

Solow, Robert, “Technical change and the aggregate production function”, Review of Economics and Statistics, vol. 39, no. 3, 1957, pp. 312–320.

Stiftung-Marktwirtschaf, Honorable States? EU Sustainability Ranking 2014, http://www.stiftung-marktwirtschaft.de/fileadmin/user_ upload/Generationenbilanz/Key_Results_Honorable_States_2014. pdf.

Vargas Hernando, Public Debt Market Risk: The Effects on the Financial System and on Monetary Policy - The Case of Colombia, Bank for International Settlements (BIS), 2006.

WHO (World Health Organization), Preamble to the Constitution of the World Health Organization as adopted by the International Health Conference, New York, 19–22 June, 1946; signed on 22 July 1946 by the representatives of 61 States (Official Records of the World Health Organization, no. 2, p. 100) and entered into force on 7 April 1948. Available at http://www.who.int/about/definition/en/ print.html.

World Economic Forum, The Global Competitiveness Report 2014-2015, 2014.

———, The Global Competitiveness Report 2015-2016, 2015.

———, The Global Competitiveness Report 2017-2018, 2017.

Economy Profiles

The Global Competitiveness Report 2018 | 51

How to Read the Economy Profiles

The Economy Profiles section presents a three-page profile for each of the 140 economies covered in The Global Competitiveness Report 2018.

PAGE 1

Performance overview This section details the economy’s performance on the main components of the Global Competitiveness Index 4.0 (GCI). The chart in this section presents an economy’s score on the overall GCI and on each of its 12 pillars. The economy’s rank (out of 140 economies) on each category is reported at the bottom of the chart. At the top of the chart, the three-letter code (ISO-3) of the best performer is reported (note that there are 31 best performers on the Macroeconomic stability pillar and four best performers on the Health pillar). To the right of each bar the performance of relevant benchmarks is reported: the economy’s score in the 2017 backcast edition (diamond); the average score of the economy’s

income group, based on the World Bank’s classification (triangle); and the average score of the region to which the economy belongs (square). See the At a Glance section on page xi for regional classification.

Contextual indicators This section presents a selection of contextual indicators, as well as selected indicators of social and environmental performance, to complement the GCI. These indicators are: Population (millions, 2017 or most recent year available, source: International Monetary Fund, World Economic Outlook Database, April 2018); GDP per capita (US$, 2017 or most recent year available, source: International Monetary Fund, World Economic Outlook Database, April 2018); 10-year average annual GDP growth (% real terms, 2017 or most recent year available, source: International Monetary Fund, World Economic Outlook Database, April 2018); Share of GDP in World total (%, 2017 or most recent year available, source: International Monetary Fund, World Economic Outlook Database, April 2018); Unemployment rate (%, 2017 or most recent year available, source: International Labour Organization, ILOSTAT database, via the World Bank’s World Development Indicators database); 5-year average annual FDI inward flow (% of GDP, 2017 or most recent

Key Previous edition Upper middle income group average Europe and North America averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



76th



68th



100th



74th



97th



45th



47th



58th



34th



105th



108th



48th



91st Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

58 54 57 52

70

87

69

57 65

51

39

64

32

Albania 76th / 140 Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 80th / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Inclusive Development Index 1-7 (best)

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -1 (perfect inequality)

2.9

4,582.9

3.0

0.03

13.9

8.6

2.1

4.1

0.7

29.0

year available, source: United Nations Conference on Trade and Development, FDI/MNE database); Environmental footprint network (global hectares, 2014 or most recent year available, source: Global Footprint Network, National Footprint Accounts dataset); Inclusive Development Index (score/rank, 2018 or most recent year available, source: World Economic Forum, Inclusive Development Report 2018); Global Gender Gap Index (score/rank, 2017 or most recent year available, source: World Economic Forum, The Global Gender Gap Report 2017); Income Gini coefficient (0–100, 2015 or most recent year available, source: World Bank, Development Research Group, via the World Bank’s World Development Indicators).

Economy Profiles

52 | The Global Competitiveness Report 2018

PAGES 2–3

The Global Competitiveness Index in detail These pages detail the country’s performance on each of the 98 indicators that compose the GCI 4.0. Indicators are organized by pillar. Refer to Appendix C for the detailed structure of the GCI, the definition of each indicator, and computation methodology.

For each indicator, the following information is reported:

Number, title and the units of measurement

Indicator value for the economy under review

Economy’s progress score on a 0 to 100 scale following normalization (see Appendix C for details)

Arrow indicating the direction of the change in score since the previous edition, or the “=” sign if the score has remained the same

Economy’s rank (out of 140)

Name of the best performer; that is, the economy attaining the best performance

Albania 76th /140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 53.9 68 New Zealand Pillar 1: Institutions 1.01 Organized crime 1-7 (best) 4.1 51.7 108 Finland

1.02 Homicide rate /100,000 pop. 2.7 92.5 70 Multiple (9)

1.03 Terrorism incidence 1 (very high) - 7 (no incidence) 99.9 99.9 61 Multiple (24)

1.04 Reliability of police services 1-7 (best) 5.0 67.1 46 Finland

1.05 Social capital 0-100 (high) 45.1 45.1 109 Australia

1.06 Budget transparency 0-100 (best) 65.4 65.4 = 42 Multiple (2)

1.07 Judicial independence 1-7 (best) 2.4 22.9 126 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 2.6 27.3 114 Finland

1.09 Freedom of the press 0-100 (worst) 29.5 70.5 62 Norway

1.10 Burden of government regulation 1-7 (best) 4.9 64.6 6 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 3.0 33.8 102 Singapore

1.12 E-Participation Index 0-1 (best) 0.76 75.84 58 Multiple (3)

1.13 Future orientation of government 1-7 (best) 3.9 47.8 56 Singapore

1.14 Incidence of corruption 0-100 (best) 38.0 38.0 77 New Zealand

1.15 Property rights 1-7 (best) 3.8 46.3 111 Finland

1.16 Intellectual property protection 1-7 (best) 3.5 41.8 106 Finland

1.17 Quality of land administration 0-30 (best) 15.5 51.7 = 70 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 4.5 58.7 78 Finland

1.19 Conflict of interest regulation 0-10 (best) 7.7 77.0 = 16 Multiple (2)

1.20 Shareholder governance 0-10 (best) 6.7 67.0 = 32 Kazakhstan

0-100 (best) - 57.3 100 Singapore Pillar 2: Infrastructure 2.01 Road connectivity index 0-100 (best) 39.4 39.4 = 115 United States

2.02 Quality of roads 1-7 (best) 4.3 54.3 59 Singapore

2.03 Railroad density km of roads/square km 14.7 36.8 = 48 Multiple (20)

2.04 Efficiency of train services 1-7 (best) 1.3 5.1 136 Switzerland

2.05 Airport connectivity index (United States=100) 8,289.1 30.1 102 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 3.9 48.8 96 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) 7.2 7.2 100 Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 4.3 54.7 59 Singapore

2.09 Electrification rate % pop. 100.0 100.0 = 1 Multiple (66)

2.10 Electric power transmission and distribution losses % output 17.1 86.3 104 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 13.1 88.6 76 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 3.7 45.5 111 Switzerland

0-100 (best) - 52.3 74 Korea, Rep. Pillar 3: ICT adoption 3.01 Mobile-cellular telephone subscriptions /100 pop. 119.4 99.5 70 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 69.3 n/a 68 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 10.0 20.0 73 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 1.0 n/a 59 Korea, Rep.

3.05 Internet users % pop. 66.4 66.4 59 Iceland

0-100 (best) - 70.0 = 97 Multiple (31) Pillar 4: Macroeconomic stability 4.01 Inflation annual % change 1.6 100.0 = 1 Multiple (74)

4.02 Debt dynamics 0-100 (best) 40.0 40.0 = 113 Multiple (36)

0-100 (best) - 86.8 45 Multiple (4) Pillar 5: Health 5.01 Healthy life expectancy years 67.8 86.8 44 Multiple (4)

0-100 (best) - 68.7 47 Finland Pillar 6: Skills 6.01 Mean years of schooling Years 10.2 68.0 = 54 Finland

6.02 Extent of staff training 1-7 (best) 4.0 49.5 62 Switzerland

6.03 Quality of vocational training 1-7 (best) 3.9 49.1 76 Switzerland

6.04 Skillset of graduates 1-7 (best) 4.2 53.4 55 Switzerland

6.05 Digital skills among population 1-7 (best) 4.7 61.2 44 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 4.0 50.5 74 United States

6.07 School life expectancy Years 15.4 85.4 47 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 4.5 58.0 19 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 18.2 79.5 66 Multiple (6)

Albania 76th /140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 53.9 68 New Zealand Pillar 1: Institutions 1.01 Organized crime 1-7 (best) 4.1 51.7 108 Finland

1.02 Homicide rate /100,000 pop. 2.7 92.5 70 Multiple (9)

1.03 Terrorism incidence 1 (very high) - 7 (no incidence) 99.9 99.9 61 Multiple (24)

1.04 Reliability of police services 1-7 (best) 5.0 67.1 46 Finland

1.05 Social capital 0-100 (high) 45.1 45.1 109 Australia

1.06 Budget transparency 0-100 (best) 65.4 65.4 = 42 Multiple (2)

1.07 Judicial independence 1-7 (best) 2.4 22.9 126 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 2.6 27.3 114 Finland

1.09 Freedom of the press 0-100 (worst) 29.5 70.5 62 Norway

1.10 Burden of government regulation 1-7 (best) 4.9 64.6 6 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 3.0 33.8 102 Singapore

1.12 E-Participation Index 0-1 (best) 0.76 75.84 58 Multiple (3)

1.13 Future orientation of government 1-7 (best) 3.9 47.8 56 Singapore

1.14 Incidence of corruption 0-100 (best) 38.0 38.0 77 New Zealand

1.15 Property rights 1-7 (best) 3.8 46.3 111 Finland

1.16 Intellectual property protection 1-7 (best) 3.5 41.8 106 Finland

1.17 Quality of land administration 0-30 (best) 15.5 51.7 = 70 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 4.5 58.7 78 Finland

1.19 Conflict of interest regulation 0-10 (best) 7.7 77.0 = 16 Multiple (2)

1.20 Shareholder governance 0-10 (best) 6.7 67.0 = 32 Kazakhstan

0-100 (best) - 57.3 100 Singapore Pillar 2: Infrastructure 2.01 Road connectivity index 0-100 (best) 39.4 39.4 = 115 United States

2.02 Quality of roads 1-7 (best) 4.3 54.3 59 Singapore

2.03 Railroad density km of roads/square km 14.7 36.8 = 48 Multiple (20)

2.04 Efficiency of train services 1-7 (best) 1.3 5.1 136 Switzerland

2.05 Airport connectivity index (United States=100) 8,289.1 30.1 102 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 3.9 48.8 96 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) 7.2 7.2 100 Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 4.3 54.7 59 Singapore

2.09 Electrification rate % pop. 100.0 100.0 = 1 Multiple (66)

2.10 Electric power transmission and distribution losses % output 17.1 86.3 104 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 13.1 88.6 76 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 3.7 45.5 111 Switzerland

0-100 (best) - 52.3 74 Korea, Rep. Pillar 3: ICT adoption 3.01 Mobile-cellular telephone subscriptions /100 pop. 119.4 99.5 70 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 69.3 n/a 68 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 10.0 20.0 73 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 1.0 n/a 59 Korea, Rep.

3.05 Internet users % pop. 66.4 66.4 59 Iceland

0-100 (best) - 70.0 = 97 Multiple (31) Pillar 4: Macroeconomic stability 4.01 Inflation annual % change 1.6 100.0 = 1 Multiple (74)

4.02 Debt dynamics 0-100 (best) 40.0 40.0 = 113 Multiple (36)

0-100 (best) - 86.8 45 Multiple (4) Pillar 5: Health 5.01 Healthy life expectancy years 67.8 86.8 44 Multiple (4)

0-100 (best) - 68.7 47 Finland Pillar 6: Skills 6.01 Mean years of schooling Years 10.2 68.0 = 54 Finland

6.02 Extent of staff training 1-7 (best) 4.0 49.5 62 Switzerland

6.03 Quality of vocational training 1-7 (best) 3.9 49.1 76 Switzerland

6.04 Skillset of graduates 1-7 (best) 4.2 53.4 55 Switzerland

6.05 Digital skills among population 1-7 (best) 4.7 61.2 44 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 4.0 50.5 74 United States

6.07 School life expectancy Years 15.4 85.4 47 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 4.5 58.0 19 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 18.2 79.5 66 Multiple (6)

ONLINE RESOURCES Interactive profiles and sortable rankings with detailed meta information, as well as downloadable datasets, are available at http://gcr.weforum.org.

The Global Competitiveness Report 2018 | 53

Index of Economy Profiles

Economy Page

Albania 55

Algeria 59

Angola 63

Argentina 67

Armenia 71

Australia 75

Austria 79

Azerbaijan 83

Bahrain 87

Bangladesh 91

Belgium 95

Benin 99

Bolivia 103

Bosnia and Herzegovina 107

Botswana 111

Brazil 115

Brunei Darussalam 119

Bulgaria 123

Burkina Faso 127

Burundi 131

Cambodia 135

Cameroon 139

Canada 143

Cape Verde 147

Chad 151

Chile 155

China 159

Colombia 163

Congo, Democratic Rep. 167

Costa Rica 171

Côte d'Ivoire 175

Croatia 179

Cyprus 183

Czech Republic 187

Denmark 191

Dominican Republic 195

Ecuador 199

Egypt 203

El Salvador 207

Estonia 211

Eswatini 215

Ethiopia 219

Finland 223

France 227

Gambia, The 231

Georgia 235

Germany 239

Economy Page

Ghana 243

Greece 247

Guatemala 251

Guinea 255

Haiti 259

Honduras 263

Hong Kong SAR 267

Hungary 271

Iceland 275

India 279

Indonesia 283

Iran, Islamic Rep. 287

Ireland 291

Israel 295

Italy 299

Jamaica 303

Japan 307

Jordan 311

Kazakhstan 315

Kenya 319

Korea, Rep. 323

Kuwait 327

Kyrgyz Republic 331

Lao PDR 335

Latvia 339

Lebanon 343

Lesotho 347

Liberia 351

Lithuania 355

Luxembourg 359

Macedonia, FYR 363

Malawi 367

Malaysia 371

Mali 375

Malta 379

Mauritania 383

Mauritius 387

Mexico 391

Moldova 395

Mongolia 399

Montenegro 403

Morocco 407

Mozambique 411

Namibia 415

Nepal 419

Netherlands 423

New Zealand 427

Economy Page

Nicaragua 431

Nigeria 435

Norway 439

Oman 443

Pakistan 447

Panama 451

Paraguay 455

Peru 459

Philippines 463

Poland 467

Portugal 471

Qatar 475

Romania 479

Russian Federation 483

Rwanda 487

Saudi Arabia 491

Senegal 495

Serbia 499

Seychelles 503

Sierra Leone 507

Singapore 511

Slovak Republic 515

Slovenia 519

South Africa 523

Spain 527

Sri Lanka 531

Sweden 535

Switzerland 539

Taiwan, China 543

Tajikistan 547

Tanzania 551

Thailand 555

Trinidad and Tobago 559

Tunisia 563

Turkey 567

Uganda 571

Ukraine 575

United Arab Emirates 579

United Kingdom 583

United States 587

Uruguay 591

Venezuela 595

Viet Nam 599

Yemen 603

Zambia 607

Zimbabwe 611

Key Previous edition Upper middle income group average Europe and North America averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



76th



68th



100th



74th



97th



45th



47th



58th



34th



105th



108th



48th



91st Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

58 54 57 52

70

87

69

57 65

51

39

64

32

Albania 76th / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 80th / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Inclusive Development Index 1-7 (best)

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -100 (perfect inequality)

2.9

4,582.9

3.0

0.03

13.9

8.6

2.1

4.1

0.7

29.0

Economy Profiles

The Global Competitiveness Report 2018 | 55

Albania 76th/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 53.9 68 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 4.1 51.7 108 Finland

1.02 Homicide rate /100,000 pop. 2.7 92.5 70 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 99.9 99.9 61 Multiple (24)

1.04 Reliability of police services 1-7 (best) 5.0 67.1 46 Finland

1.05 Social capital 0-100 (high) 45.1 45.1 109 Australia

1.06 Budget transparency 0-100 (best) 65.4 65.4 = 42 Multiple (2)

1.07 Judicial independence 1-7 (best) 2.4 22.9 126 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 2.6 27.3 114 Finland

1.09 Freedom of the press 0-100 (worst) 29.5 70.5 62 Norway

1.10 Burden of government regulation 1-7 (best) 4.9 64.6 6 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 3.0 33.8 102 Singapore

1.12 E-Participation Index 0-1 (best) 0.76 75.8 58 Multiple (3)

1.13 Future orientation of government 1-7 (best) 3.9 47.8 56 Singapore

1.14 Incidence of corruption 0-100 (best) 38.0 38.0 77 New Zealand

1.15 Property rights 1-7 (best) 3.8 46.3 111 Finland

1.16 Intellectual property protection 1-7 (best) 3.5 41.8 106 Finland

1.17 Quality of land administration 0-30 (best) 15.5 51.7 = 70 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 4.5 58.7 78 Finland

1.19 Conflict of interest regulation 0-10 (best) 7.7 77.0 = 16 Multiple (2)

1.20 Shareholder governance 0-10 (best) 6.7 67.0 = 32 Kazakhstan

0-100 (best) - 57.3 100 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 39.4 39.4 = 115 United States

2.02 Quality of roads 1-7 (best) 4.3 54.3 59 Singapore

2.03 Railroad density km of roads/square km 14.7 36.8 = 48 Multiple (20)

2.04 Efficiency of train services 1-7 (best) 1.3 5.1 136 Switzerland

2.05 Airport connectivity score 8,289.1 30.1 102 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 3.9 48.8 96 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) 7.2 7.2 100 Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 4.3 54.7 59 Singapore

2.09 Electrification rate % pop. 100.0 100.0 = 1 Multiple (66)

2.10 Electric power transmission and distribution losses % output 17.1 86.3 104 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 13.1 88.6 76 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 3.7 45.5 111 Switzerland

0-100 (best) - 52.3 74 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 119.4 99.5 70 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 69.3 n/a 68 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 10.0 20.0 73 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 1.0 n/a 59 Korea, Rep.

3.05 Internet users % pop. 66.4 66.4 59 Iceland

0-100 (best) - 70.0 = 97 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change 1.6 100.0 = 1 Multiple (74)

4.02 Debt dynamics 0-100 (best) 40.0 40.0 = 113 Multiple (36)

0-100 (best) - 86.8 45 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 67.8 86.8 44 Multiple (4)

0-100 (best) - 68.7 47 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 10.2 68.0 = 54 Finland

6.02 Extent of staff training 1-7 (best) 4.0 49.5 62 Switzerland

6.03 Quality of vocational training 1-7 (best) 3.9 49.1 76 Switzerland

6.04 Skillset of graduates 1-7 (best) 4.2 53.4 55 Switzerland

6.05 Digital skills among population 1-7 (best) 4.7 61.2 44 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 4.0 50.5 74 United States

6.07 School life expectancy Years 15.4 85.4 47 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 4.5 58.0 19 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 18.2 79.5 66 Multiple (6)

Economy Profiles

57 | The Global Competitiveness Report 2018

Albania 76th/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 57.0 58 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 3.4 39.3 101 Singapore

7.02 Extent of market dominance 1-7 (best) 3.0 32.8 125 Switzerland

7.03 Competition in services 1-7 (best) 4.9 65.6 67 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 4.9 64.4 28 Singapore

7.05 Trade tariffs % duty 2.20 85.3 41 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 5.6 76.7 72 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 2.3 33.7 111 Germany

7.08 Services trade openness 0-100 (worst) 19.4 80.6 = 36 Ecuador

0-100 (best) - 64.8 34 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 20.8 64.9 = 93 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 4.2 53.3 39 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 4.9 64.2 34 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 4.9 65.6 65 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 2.7 28.1 101 Switzerland

8.06 Workers' rights 0-100 (best) 80.4 80.4 37 Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 5.8 80.0 1 Albania

8.08 Internal Labour mobility 1-7 (best) 4.7 61.0 52 Guinea

8.09 Reliance on professional management 1-7 (best) 4.2 52.9 71 Finland

8.10 Pay and productivity 1-7 (best) 4.5 57.7 38 United States

8.11 Female participation in Labour force ratio 0.79 73.9 54 Multiple (4)

8.12 Labour tax rate % 18.8 85.0 = 86 Multiple (26)

0-100 (best) - 51.3 105 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 36.0 37.9 89 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 3.8 46.2 67 United States

9.03 Venture capital availability 1-7 (best) 2.7 28.4 88 United States

9.04 Market capitalization % GDP 0.0 0.0 121 Multiple (12)

9.05 Insurance premium % GDP 0.8 12.7 = 103 Multiple (16)

9.06 Soundness of banks 1-7 (best) 5.4 72.9 47 Finland

9.07 Non-performing loans % loan portfolio value 18.2 64.2 127 Multiple (2)

9.08 Credit gap percentage points -9.1 100.0 = 20 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio 16.8 99.6 = 60 Multiple (72)

0-100 (best) - 39.2 108 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 33 n/a 110 China

10.02 Imports % GDP 54.6 n/a 47 Hong Kong SAR

0-100 (best) - 64.1 48 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 12.0 94.0 84 Multiple (2)

11.02 Time to start a business days 5.0 95.5 = 21 New Zealand

11.03 Insolvency recovery rate cents/$ 41.6 44.8 54 Norway

11.04 Insolvency regulatory framework 0-16 (best) 14.0 87.5 = 8 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 4.1 52.0 55 Israel

11.06 Willingness to delegate authority 1-7 (best) 4.0 50.5 91 Denmark

11.07 Growth of innovative companies 1-7 (best) 4.1 51.6 59 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 3.2 36.7 101 United States

0-100 (best) - 31.7 91 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 5.0 67.3 24 Canada

12.02 State of cluster development 1-7 (best) 3.1 34.3 122 United States

12.03 International co-inventions applications/million pop. 0.13 3.7 78 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 3.6 43.5 67 United States

12.05 Scientific publications H Index 54.3 59.4 124 Multiple (7)

12.06 Patent applications applications/million pop. 0.24 4.0 85 Multiple (8)

12.07 R&D expenditures % GDP 0.2 5.1 = 97 Multiple (7)

12.08 Quality of research institutions index 0.00 0.0 112 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 3.2 37.3 83 United States

12.10 Trademark applications applications/million pop. 336.46 62.6 81 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 57

Economy Profiles

59 | The Global Competitiveness Report 2018

Key Previous edition Upper middle income group average Middle East and North Africa averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



92nd



120th



88th



83rd



111th



66th



88th



128th



134th



122nd



38th



113rd



106th Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

54

44

61

47

69

81

57

45 44 48

66

51

30

Algeria 92nd / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 92nd / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Inclusive Development Index 1-7 (best)

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -100 (perfect inequality)

41.5

4,292.3

2.9

0.50

10.1

0.6

2.5

4.2

0.6

27.6

Economy Profiles

The Global Competitiveness Report 2018 | 59

Algeria 92nd/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 44.4 120 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 5.1 68.5 54 Finland

1.02 Homicide rate /100,000 pop. 1.4 97.1 = 44 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 98.2 98.2 101 Multiple (24)

1.04 Reliability of police services 1-7 (best) 4.6 60.7 58 Finland

1.05 Social capital 0-100 (high) 42.9 42.9 120 Australia

1.06 Budget transparency 0-100 (best) 34.6 34.6 = 116 Multiple (2)

1.07 Judicial independence 1-7 (best) 3.6 43.4 80 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 3.2 36.2 77 Finland

1.09 Freedom of the press 0-100 (worst) 43.1 56.9 110 Norway

1.10 Burden of government regulation 1-7 (best) 3.2 37.1 86 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 4.0 50.0 54 Singapore

1.12 E-Participation Index 0-1 (best) 0.20 20.2 128 Multiple (3)

1.13 Future orientation of government 1-7 (best) 3.2 37.1 100 Singapore

1.14 Incidence of corruption 0-100 (best) 33.0 33.0 96 New Zealand

1.15 Property rights 1-7 (best) 3.9 49.1 99 Finland

1.16 Intellectual property protection 1-7 (best) 3.8 46.3 92 Finland

1.17 Quality of land administration 0-30 (best) 7.0 23.3 = 122 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 3.4 39.7 131 Finland

1.19 Conflict of interest regulation 0-10 (best) 3.3 33.0 = 131 Multiple (2)

1.20 Shareholder governance 0-10 (best) 3.3 33.0 = 124 Kazakhstan

0-100 (best) - 61.2 88 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 80.4 80.4 = 30 United States

2.02 Quality of roads 1-7 (best) 3.6 42.8 86 Singapore

2.03 Railroad density km of roads/square km 1.6 4.0 = 88 Multiple (20)

2.04 Efficiency of train services 1-7 (best) 3.6 42.9 57 Switzerland

2.05 Airport connectivity score 46,594.5 50.9 67 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 3.7 44.6 112 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) 7.3 7.3 99 Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 3.5 41.4 91 Singapore

2.09 Electrification rate % pop. 100.0 100.0 1 Multiple (66)

2.10 Electric power transmission and distribution losses % output 16.3 87.2 99 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 11.9 89.9 72 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 4.3 55.6 89 Switzerland

0-100 (best) - 47.2 83 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 120.7 100.0 66 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 83.9 n/a 44 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 7.7 15.3 80 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 0.0 n/a 113 Korea, Rep.

3.05 Internet users % pop. 42.9 42.9 91 Iceland

0-100 (best) - 68.5 111 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change 6.0 94.5 109 Multiple (74)

4.02 Debt dynamics 0-100 (best) 42.5 42.5 112 Multiple (36)

0-100 (best) - 81.5 66 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 66.1 81.5 65 Multiple (4)

0-100 (best) - 57.4 88 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 8.7 58.0 = 79 Finland

6.02 Extent of staff training 1-7 (best) 3.4 40.1 119 Switzerland

6.03 Quality of vocational training 1-7 (best) 3.6 43.3 102 Switzerland

6.04 Skillset of graduates 1-7 (best) 3.4 40.8 118 Switzerland

6.05 Digital skills among population 1-7 (best) 3.8 46.8 90 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 3.8 47.4 94 United States

6.07 School life expectancy Years 14.3 79.6 = 65 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 2.9 32.5 105 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 24.2 64.4 90 Multiple (6)

Economy Profiles

61 | The Global Competitiveness Report 2018

Algeria 92nd/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 45.4 128 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 3.2 36.0 112 Singapore

7.02 Extent of market dominance 1-7 (best) 3.8 46.4 55 Switzerland

7.03 Competition in services 1-7 (best) 4.1 51.0 129 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 3.7 45.8 128 Singapore

7.05 Trade tariffs % duty 14.51 3.3 132 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 6.6 92.7 30 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 2.1 28.3 126 Germany

7.08 Services trade openness 0-100 (worst) 38.3 61.7 = 77 Ecuador

0-100 (best) - 44.0 134 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 17.3 72.2 = 74 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 3.6 43.8 91 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 4.0 50.8 101 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 4.7 61.4 92 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 2.9 32.3 83 Switzerland

8.06 Workers' rights 0-100 (best) 58.8 58.8 108 Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 3.2 36.8 127 Albania

8.08 Internal Labour mobility 1-7 (best) 4.6 60.5 57 Guinea

8.09 Reliance on professional management 1-7 (best) 3.0 32.5 134 Finland

8.10 Pay and productivity 1-7 (best) 3.4 40.7 109 United States

8.11 Female participation in Labour force ratio 0.21 1.7 135 Multiple (4)

8.12 Labour tax rate % 30.6 68.6 = 124 Multiple (26)

0-100 (best) - 47.8 122 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 21.0 22.1 120 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 3.5 42.1 98 United States

9.03 Venture capital availability 1-7 (best) 3.0 33.7 62 United States

9.04 Market capitalization % GDP 0.2 0.2 117 Multiple (12)

9.05 Insurance premium % GDP 0.7 11.6 = 108 Multiple (16)

9.06 Soundness of banks 1-7 (best) 3.7 44.3 116 Finland

9.07 Non-performing loans % loan portfolio value 11.4 77.9 109 Multiple (2)

9.08 Credit gap percentage points 2.5 98.6 107 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio 18.2 100.0 = 39 Multiple (72)

0-100 (best) - 66.4 38 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 576 n/a 35 China

10.02 Imports % GDP 32.1 n/a 100 Hong Kong SAR

0-100 (best) - 51.3 113 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 11.1 94.5 = 82 Multiple (2)

11.02 Time to start a business days 20.0 80.4 = 102 New Zealand

11.03 Insolvency recovery rate cents/$ 50.8 54.7 39 Norway

11.04 Insolvency regulatory framework 0-16 (best) 7.0 43.8 = 96 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 3.0 33.1 135 Israel

11.06 Willingness to delegate authority 1-7 (best) 3.1 34.6 135 Denmark

11.07 Growth of innovative companies 1-7 (best) 3.2 37.4 126 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 2.9 32.2 129 United States

0-100 (best) - 29.9 106 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 4.0 50.3 102 Canada

12.02 State of cluster development 1-7 (best) 3.4 40.6 98 United States

12.03 International co-inventions applications/million pop. 0.03 0.8 106 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 3.0 33.8 121 United States

12.05 Scientific publications H Index 129.0 72.1 81 Multiple (7)

12.06 Patent applications applications/million pop. 0.05 0.9 104 Multiple (8)

12.07 R&D expenditures % GDP 0.1 4.7 = 98 Multiple (7)

12.08 Quality of research institutions index 0.03 8.4 48 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 3.2 36.1 92 United States

12.10 Trademark applications applications/million pop. 117.87 51.4 102 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 61

Economy Profiles

63 | The Global Competitiveness Report 2018

Key Previous edition Lower middle income group average Sub-Saharan Africa averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



137th



134th



127th



119th



139th



118th



138th



140th



135th



137th



66th



137th



140th Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

37 37 41

27 31

51

31 38

43 40

54

34

17

Angola 137th / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: n/a

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -100 (perfect inequality)

28.2

4,407.7

4.2

0.15

8.2

0.2

1.6

0.6

42.7

Economy Profiles

The Global Competitiveness Report 2018 | 63

Angola 137th/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 37.2 134 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 4.4 57.0 94 Finland

1.02 Homicide rate /100,000 pop. 4.8 85.3 = 88 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 95.3 95.3 115 Multiple (24)

1.04 Reliability of police services 1-7 (best) 3.0 33.6 124 Finland

1.05 Social capital 0-100 (high) 41.1 41.1 124 Australia

1.06 Budget transparency 0-100 (best) 46.2 46.2 = 90 Multiple (2)

1.07 Judicial independence 1-7 (best) 1.9 14.4 137 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 1.8 13.4 138 Finland

1.09 Freedom of the press 0-100 (worst) 38.4 61.7 97 Norway

1.10 Burden of government regulation 1-7 (best) 2.4 24.0 130 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 2.2 19.9 132 Singapore

1.12 E-Participation Index 0-1 (best) 0.43 43.3 109 Multiple (3)

1.13 Future orientation of government 1-7 (best) 2.5 24.6 130 Singapore

1.14 Incidence of corruption 0-100 (best) 19.0 19.0 138 New Zealand

1.15 Property rights 1-7 (best) 3.0 33.0 134 Finland

1.16 Intellectual property protection 1-7 (best) 2.6 26.6 136 Finland

1.17 Quality of land administration 0-30 (best) 7.0 23.3 = 122 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 2.2 19.7 140 Finland

1.19 Conflict of interest regulation 0-10 (best) 5.3 53.0 = 84 Multiple (2)

1.20 Shareholder governance 0-10 (best) 5.7 57.0 = 69 Kazakhstan

0-100 (best) - 40.7 127 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 56.2 56.2 = 83 United States

2.02 Quality of roads 1-7 (best) 2.1 17.9 138 Singapore

2.03 Railroad density km of roads/square km n/a n/a n/a Multiple (20)

2.04 Efficiency of train services 1-7 (best) 2.0 17.1 117 Switzerland

2.05 Airport connectivity score 5,973.8 26.9 112 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 3.3 37.5 124 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) 24.6 24.6 62 Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 2.6 26.7 121 Singapore

2.09 Electrification rate % pop. 34.7 34.7 122 Multiple (66)

2.10 Electric power transmission and distribution losses % output 11.3 92.4 = 73 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 43.5 57.6 133 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 1.9 14.5 138 Switzerland

0-100 (best) - 27.4 119 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 44.7 37.3 136 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 14.6 n/a 131 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 0.3 0.7 119 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 0.1 n/a 84 Korea, Rep.

3.05 Internet users % pop. 13.0 13.0 129 Iceland

0-100 (best) - 31.1 139 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change 32.0 22.1 139 Multiple (74)

4.02 Debt dynamics 0-100 (best) 40.0 40.0 = 113 Multiple (36)

0-100 (best) - 50.9 118 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 56.3 50.9 117 Multiple (4)

0-100 (best) - 31.1 138 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 5.0 33.3 = 122 Finland

6.02 Extent of staff training 1-7 (best) 2.6 27.4 137 Switzerland

6.03 Quality of vocational training 1-7 (best) 2.3 21.8 140 Switzerland

6.04 Skillset of graduates 1-7 (best) 2.2 20.0 140 Switzerland

6.05 Digital skills among population 1-7 (best) 2.2 20.1 139 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 2.1 18.1 140 United States

6.07 School life expectancy Years 9.5 53.0 = 125 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 1.9 14.6 140 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 42.5 18.6 = 125 Multiple (6)

Economy Profiles

65 | The Global Competitiveness Report 2018

Angola 137th/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 37.5 140 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 2.6 26.7 134 Singapore

7.02 Extent of market dominance 1-7 (best) 2.1 17.7 139 Switzerland

7.03 Competition in services 1-7 (best) 3.2 36.2 139 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 4.0 49.3 111 Singapore

7.05 Trade tariffs % duty 10.09 32.7 100 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 5.7 78.2 = 69 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 1.6 14.3 137 Germany

7.08 Services trade openness 0-100 (worst) n/a 66.5 n/a Ecuador

0-100 (best) - 43.5 135 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 17.9 71.1 = 79 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 3.6 44.0 88 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 3.5 41.6 132 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 5.3 72.1 37 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 1.5 9.0 140 Switzerland

8.06 Workers' rights 0-100 (best) 70.1 70.1 71 Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 3.4 40.5 123 Albania

8.08 Internal Labour mobility 1-7 (best) 1.9 14.6 140 Guinea

8.09 Reliance on professional management 1-7 (best) 2.3 22.2 137 Finland

8.10 Pay and productivity 1-7 (best) 2.3 22.4 138 United States

8.11 Female participation in Labour force ratio 0.38 23.1 112 Multiple (4)

8.12 Labour tax rate % 9.0 98.6 = 28 Multiple (26)

0-100 (best) - 40.1 137 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 23.7 25.0 110 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 2.1 18.2 140 United States

9.03 Venture capital availability 1-7 (best) 1.4 6.8 140 United States

9.04 Market capitalization % GDP 0.0 0.0 121 Multiple (12)

9.05 Insurance premium % GDP 0.5 8.7 = 121 Multiple (16)

9.06 Soundness of banks 1-7 (best) 2.3 22.2 138 Finland

9.07 Non-performing loans % loan portfolio value 10.6 79.6 106 Multiple (2)

9.08 Credit gap percentage points -5.6 100.0 = 34 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio n/a 100.0 = n/a Multiple (72)

0-100 (best) - 53.9 66 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 173 n/a 63 China

10.02 Imports % GDP 26.8 n/a 115 Hong Kong SAR

0-100 (best) - 34.5 137 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 17.4 91.3 101 Multiple (2)

11.02 Time to start a business days 36.0 64.3 = 123 New Zealand

11.03 Insolvency recovery rate cents/$ 0.0 0.0 133 Norway

11.04 Insolvency regulatory framework 0-16 (best) 0.0 0.0 134 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 3.4 39.7 120 Israel

11.06 Willingness to delegate authority 1-7 (best) 2.7 29.0 139 Denmark

11.07 Growth of innovative companies 1-7 (best) 2.9 31.7 135 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 2.2 19.9 140 United States

0-100 (best) - 16.8 140 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 3.8 46.8 119 Canada

12.02 State of cluster development 1-7 (best) 2.3 21.3 140 United States

12.03 International co-inventions applications/million pop. 0.00 0.1 122 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 2.0 17.4 140 United States

12.05 Scientific publications H Index 39.7 54.9 133 Multiple (7)

12.06 Patent applications applications/million pop. 0.00 0.1 126 Multiple (8)

12.07 R&D expenditures % GDP 0.0 0.0 120 Multiple (7)

12.08 Quality of research institutions index 0.00 0.0 112 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 2.6 27.3 121 United States

12.10 Trademark applications applications/million pop. 0.00 0.0 124 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 65

Economy Profiles

67 | The Global Competitiveness Report 2018

Key Previous edition High income group average Latin America and the Caribbean averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



81st



77th



68th



65th



136th



53rd



51st



120th



116th



97th



34th



84th



54th Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

57 52

68

56

45

85

68

48 51 53

69

55

40

Argentina 81st / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 79th / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Inclusive Development Index 1-7 (best)

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -100 (perfect inequality)

44.1

14,466.6

1.6

0.72

8.5

1.6

3.7

4.1

0.7

42.4

Economy Profiles

The Global Competitiveness Report 2018 | 67

Argentina 81st/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 51.5 77 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 4.1 52.0 106 Finland

1.02 Homicide rate /100,000 pop. 5.9 81.6 95 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 99.8 99.8 71 Multiple (24)

1.04 Reliability of police services 1-7 (best) 3.4 40.0 115 Finland

1.05 Social capital 0-100 (high) 50.4 50.4 68 Australia

1.06 Budget transparency 0-100 (best) 96.2 96.2 = 3 Multiple (2)

1.07 Judicial independence 1-7 (best) 3.1 34.7 101 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 2.8 30.4 101 Finland

1.09 Freedom of the press 0-100 (worst) 26.1 74.0 44 Norway

1.10 Burden of government regulation 1-7 (best) 2.5 25.6 126 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 2.7 29.1 119 Singapore

1.12 E-Participation Index 0-1 (best) 0.62 62.4 84 Multiple (3)

1.13 Future orientation of government 1-7 (best) 3.5 41.2 83 Singapore

1.14 Incidence of corruption 0-100 (best) 39.0 39.0 73 New Zealand

1.15 Property rights 1-7 (best) 3.7 44.8 114 Finland

1.16 Intellectual property protection 1-7 (best) 3.7 45.8 95 Finland

1.17 Quality of land administration 0-30 (best) 13.5 45.0 83 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 4.1 51.4 104 Finland

1.19 Conflict of interest regulation 0-10 (best) 5.0 50.0 = 95 Multiple (2)

1.20 Shareholder governance 0-10 (best) 7.7 77.0 = 10 Kazakhstan

0-100 (best) - 67.6 68 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 92.6 92.6 = 11 United States

2.02 Quality of roads 1-7 (best) 3.4 40.5 93 Singapore

2.03 Railroad density km of roads/square km 10.3 25.7 = 55 Multiple (20)

2.04 Efficiency of train services 1-7 (best) 2.5 25.7 95 Switzerland

2.05 Airport connectivity score 80,596.6 59.1 48 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 4.3 55.5 83 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) 32.9 32.9 51 Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 3.7 45.8 81 Singapore

2.09 Electrification rate % pop. 99.6 99.6 73 Multiple (66)

2.10 Electric power transmission and distribution losses % output 13.2 90.5 86 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 5.1 96.8 32 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 4.9 65.1 67 Switzerland

0-100 (best) - 56.2 65 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 139.8 100.0 = 26 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 78.1 n/a 55 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 17.8 35.6 54 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 0.4 n/a 73 Korea, Rep.

3.05 Internet users % pop. 71.0 71.0 53 Iceland

0-100 (best) - 44.9 = 136 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change 25.7 39.8 = 137 Multiple (74)

4.02 Debt dynamics 0-100 (best) 50.0 50.0 = 64 Multiple (36)

0-100 (best) - 85.1 53 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 67.2 85.1 52 Multiple (4)

0-100 (best) - 68.4 51 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 10.1 67.3 = 57 Finland

6.02 Extent of staff training 1-7 (best) 3.7 44.8 88 Switzerland

6.03 Quality of vocational training 1-7 (best) 4.5 58.2 42 Switzerland

6.04 Skillset of graduates 1-7 (best) 4.0 50.0 71 Switzerland

6.05 Digital skills among population 1-7 (best) 4.0 49.2 78 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 4.1 51.7 69 United States

6.07 School life expectancy Years 17.4 96.8 = 13 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 3.1 35.6 89 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 17.2 81.9 = 57 Multiple (6)

Economy Profiles

69 | The Global Competitiveness Report 2018

Argentina 81st/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 48.3 120 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 2.7 28.8 130 Singapore

7.02 Extent of market dominance 1-7 (best) 3.4 39.6 104 Switzerland

7.03 Competition in services 1-7 (best) 4.4 56.3 118 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 3.9 47.9 121 Singapore

7.05 Trade tariffs % duty 12.70 15.3 126 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 6.6 93.2 27 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 2.4 35.4 100 Germany

7.08 Services trade openness 0-100 (worst) 17.0 83.0 = 24 Ecuador

0-100 (best) - 50.7 116 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 30.3 45.1 = 123 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 2.3 22.2 137 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 3.7 44.6 122 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 2.9 31.7 137 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 2.8 29.7 100 Switzerland

8.06 Workers' rights 0-100 (best) 70.1 70.1 71 Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 4.7 62.4 17 Albania

8.08 Internal Labour mobility 1-7 (best) 3.8 46.0 123 Guinea

8.09 Reliance on professional management 1-7 (best) 4.4 56.6 59 Finland

8.10 Pay and productivity 1-7 (best) 3.3 38.9 117 United States

8.11 Female participation in Labour force ratio 0.71 64.1 72 Multiple (4)

8.12 Labour tax rate % 29.3 70.4 = 123 Multiple (26)

0-100 (best) - 52.5 97 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 14.2 14.9 135 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 2.8 30.1 129 United States

9.03 Venture capital availability 1-7 (best) 2.4 24.1 104 United States

9.04 Market capitalization % GDP 10.9 10.9 91 Multiple (12)

9.05 Insurance premium % GDP 2.5 41.1 = 48 Multiple (16)

9.06 Soundness of banks 1-7 (best) 4.7 61.0 81 Finland

9.07 Non-performing loans % loan portfolio value 1.8 97.3 32 Multiple (2)

9.08 Credit gap percentage points -1.3 100.0 = 57 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio 13.9 93.4 = 103 Multiple (72)

0-100 (best) - 68.6 34 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 838 n/a 27 China

10.02 Imports % GDP 14.2 n/a 138 Hong Kong SAR

0-100 (best) - 55.4 84 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 10.4 94.8 79 Multiple (2)

11.02 Time to start a business days 24.0 76.4 = 109 New Zealand

11.03 Insolvency recovery rate cents/$ 21.5 23.1 111 Norway

11.04 Insolvency regulatory framework 0-16 (best) 9.5 59.4 = 66 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 3.9 48.4 75 Israel

11.06 Willingness to delegate authority 1-7 (best) 4.2 53.3 74 Denmark

11.07 Growth of innovative companies 1-7 (best) 3.9 48.8 69 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 3.3 39.1 87 United States

0-100 (best) - 40.5 54 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 4.8 62.7 42 Canada

12.02 State of cluster development 1-7 (best) 3.3 39.1 102 United States

12.03 International co-inventions applications/million pop. 0.27 7.3 67 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 3.4 39.7 89 United States

12.05 Scientific publications H Index 346.0 86.6 37 Multiple (7)

12.06 Patent applications applications/million pop. 1.48 16.7 60 Multiple (8)

12.07 R&D expenditures % GDP 0.6 19.6 = 58 Multiple (7)

12.08 Quality of research institutions index 0.07 17.8 28 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 3.3 37.9 81 United States

12.10 Trademark applications applications/million pop. 1,293.51 77.1 48 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 69

Economy Profiles

71 | The Global Competitiveness Report 2018

Key Previous edition Upper middle income group average Eurasia averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



70th



67th



74th



56th



89th



61st



55th



39th



33rd



87th



118th



62nd



60th Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

60 54

66 59

72

83

68 61

65

54

37

60

39

Armenia 70th / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 72nd / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Inclusive Development Index 1-7 (best)

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -100 (perfect inequality)

3.0

3,861.0

2.3

0.02

18.2

3.1

2.0

3.7

0.7

32.5

Economy Profiles

The Global Competitiveness Report 2018 | 71

Armenia 70th/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 54.0 67 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 5.2 69.6 47 Finland

1.02 Homicide rate /100,000 pop. 3.0 91.6 71 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 99.9 99.9 62 Multiple (24)

1.04 Reliability of police services 1-7 (best) 4.6 59.8 65 Finland

1.05 Social capital 0-100 (high) 42.1 42.1 122 Australia

1.06 Budget transparency 0-100 (best) 61.5 61.5 = 49 Multiple (2)

1.07 Judicial independence 1-7 (best) 3.5 41.9 85 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 3.4 40.5 61 Finland

1.09 Freedom of the press 0-100 (worst) 30.0 70.0 65 Norway

1.10 Burden of government regulation 1-7 (best) 3.8 47.0 41 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 3.7 45.1 68 Singapore

1.12 E-Participation Index 0-1 (best) 0.57 56.7 97 Multiple (3)

1.13 Future orientation of government 1-7 (best) 3.8 47.3 61 Singapore

1.14 Incidence of corruption 0-100 (best) 35.0 35.0 91 New Zealand

1.15 Property rights 1-7 (best) 4.5 59.1 55 Finland

1.16 Intellectual property protection 1-7 (best) 4.1 52.2 66 Finland

1.17 Quality of land administration 0-30 (best) 21.5 71.7 39 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 4.3 55.4 87 Finland

1.19 Conflict of interest regulation 0-10 (best) 6.3 63.0 = 45 Multiple (2)

1.20 Shareholder governance 0-10 (best) 5.3 53.0 = 76 Kazakhstan

0-100 (best) - 66.3 74 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 41.8 41.8 = 112 United States

2.02 Quality of roads 1-7 (best) 3.6 43.7 85 Singapore

2.03 Railroad density km of roads/square km 22.8 57.1 = 34 Multiple (20)

2.04 Efficiency of train services 1-7 (best) 3.1 34.4 76 Switzerland

2.05 Airport connectivity score 11,238.7 33.2 93 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 4.4 56.6 78 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) n/a n/a n/a Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 2.6 27.1 119 Singapore

2.09 Electrification rate % pop. 100.0 100.0 = 1 Multiple (66)

2.10 Electric power transmission and distribution losses % output 12.4 91.3 82 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 6.5 95.4 40 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 4.9 65.6 66 Switzerland

0-100 (best) - 59.2 56 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 119.0 99.2 71 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 66.8 n/a 74 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 10.8 21.5 71 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 4.7 n/a 37 Korea, Rep.

3.05 Internet users % pop. 64.3 64.3 61 Iceland

0-100 (best) - 72.4 89 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change -0.2 97.9 94 Multiple (74)

4.02 Debt dynamics 0-100 (best) 46.9 46.9 101 Multiple (36)

0-100 (best) - 82.7 61 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 66.5 82.7 60 Multiple (4)

0-100 (best) - 67.6 55 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 11.7 77.8 = 32 Finland

6.02 Extent of staff training 1-7 (best) 3.6 43.7 97 Switzerland

6.03 Quality of vocational training 1-7 (best) 3.8 47.0 85 Switzerland

6.04 Skillset of graduates 1-7 (best) 3.8 47.1 89 Switzerland

6.05 Digital skills among population 1-7 (best) 4.4 57.0 58 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 3.9 47.8 90 United States

6.07 School life expectancy Years 13.0 72.0 = 84 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 3.6 43.9 54 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 9.5 100.0 = 5 Multiple (6)

Economy Profiles

73 | The Global Competitiveness Report 2018

Armenia 70th/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 61.2 39 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 4.1 51.2 47 Singapore

7.02 Extent of market dominance 1-7 (best) 4.7 61.8 19 Switzerland

7.03 Competition in services 1-7 (best) 5.2 70.5 41 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 4.3 54.5 78 Singapore

7.05 Trade tariffs % duty 3.49 76.7 50 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 3.8 46.8 106 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 2.6 39.3 81 Germany

7.08 Services trade openness 0-100 (worst) 11.4 88.6 = 5 Ecuador

0-100 (best) - 65.0 33 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 13.0 81.3 = 47 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 4.4 57.1 27 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 4.7 62.3 40 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 5.1 68.1 57 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 3.2 36.3 70 Switzerland

8.06 Workers' rights 0-100 (best) n/a 69.8 n/a Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 5.0 67.1 8 Albania

8.08 Internal Labour mobility 1-7 (best) 3.9 48.8 110 Guinea

8.09 Reliance on professional management 1-7 (best) 4.3 54.4 64 Finland

8.10 Pay and productivity 1-7 (best) 4.1 51.9 57 United States

8.11 Female participation in Labour force ratio 0.75 68.4 65 Multiple (4)

8.12 Labour tax rate % 0.0 100.0 = 1 Multiple (26)

0-100 (best) - 54.2 87 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 47.8 50.3 77 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 3.7 44.8 81 United States

9.03 Venture capital availability 1-7 (best) 2.9 31.3 72 United States

9.04 Market capitalization % GDP 2.6 2.6 110 Multiple (12)

9.05 Insurance premium % GDP n/a 10.5 = n/a Multiple (16)

9.06 Soundness of banks 1-7 (best) 4.8 63.4 75 Finland

9.07 Non-performing loans % loan portfolio value 6.7 87.4 83 Multiple (2)

9.08 Credit gap percentage points -0.9 100.0 = 62 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio 15.8 97.6 = 76 Multiple (72)

0-100 (best) - 36.7 118 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 26 n/a 118 China

10.02 Imports % GDP 52.9 n/a 53 Hong Kong SAR

0-100 (best) - 60.2 62 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 0.9 99.6 = 20 Multiple (2)

11.02 Time to start a business days 4.5 96.0 = 17 New Zealand

11.03 Insolvency recovery rate cents/$ 36.4 39.2 71 Norway

11.04 Insolvency regulatory framework 0-16 (best) 7.5 46.9 = 93 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 4.3 54.3 45 Israel

11.06 Willingness to delegate authority 1-7 (best) 4.1 51.3 86 Denmark

11.07 Growth of innovative companies 1-7 (best) 3.9 48.2 77 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 3.8 46.3 47 United States

0-100 (best) - 38.8 60 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 4.1 51.8 96 Canada

12.02 State of cluster development 1-7 (best) 3.8 46.0 72 United States

12.03 International co-inventions applications/million pop. 0.80 18.1 49 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 3.6 42.8 71 United States

12.05 Scientific publications H Index 153.3 74.6 71 Multiple (7)

12.06 Patent applications applications/million pop. 3.15 26.1 51 Multiple (8)

12.07 R&D expenditures % GDP 0.3 8.4 86 Multiple (7)

12.08 Quality of research institutions index 0.00 1.3 78 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 4.0 50.3 35 United States

12.10 Trademark applications applications/million pop. 611.20 69.0 64 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 73

Economy Profiles

75 | The Global Competitiveness Report 2018

Key Previous edition High income group average East Asia and Pacific averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



14th



15th



31st



22nd



1st



8th



12th



8th



22nd



13th



25th



15th



18th Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

79 74

78 73

100 99

81

70 69

86

72 75 70

Australia 14th / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 15th / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Inclusive Development Index 1-7 (best)

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -100 (perfect inequality)

24.8

55,707.3

2.5

0.98

5.6

3.2

6.9

5.4

0.7

34.7

Economy Profiles

The Global Competitiveness Report 2018 | 75

Australia 14th/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 73.6 15 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 5.5 75.2 27 Finland

1.02 Homicide rate /100,000 pop. 0.9 98.5 29 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 99.2 99.2 88 Multiple (24)

1.04 Reliability of police services 1-7 (best) 6.1 85.2 12 Finland

1.05 Social capital 0-100 (high) 66.2 66.2 1 Australia

1.06 Budget transparency 0-100 (best) 76.9 76.9 = 21 Multiple (2)

1.07 Judicial independence 1-7 (best) 6.2 86.0 7 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 4.2 53.2 28 Finland

1.09 Freedom of the press 0-100 (worst) 15.5 84.5 19 Norway

1.10 Burden of government regulation 1-7 (best) 3.3 38.3 77 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 4.7 62.1 25 Singapore

1.12 E-Participation Index 0-1 (best) 0.98 98.3 5 Multiple (3)

1.13 Future orientation of government 1-7 (best) 4.2 53.0 35 Singapore

1.14 Incidence of corruption 0-100 (best) 77.0 77.0 13 New Zealand

1.15 Property rights 1-7 (best) 6.0 83.2 11 Finland

1.16 Intellectual property protection 1-7 (best) 5.8 80.2 14 Finland

1.17 Quality of land administration 0-30 (best) 20.0 66.7 = 47 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 6.0 83.5 11 Finland

1.19 Conflict of interest regulation 0-10 (best) 6.0 60.0 = 54 Multiple (2)

1.20 Shareholder governance 0-10 (best) 6.0 60.0 = 56 Kazakhstan

0-100 (best) - 77.9 31 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 90.0 90.0 = 16 United States

2.02 Quality of roads 1-7 (best) 4.8 62.8 35 Singapore

2.03 Railroad density km of roads/square km 1.2 3.1 = 93 Multiple (20)

2.04 Efficiency of train services 1-7 (best) 4.3 54.3 36 Switzerland

2.05 Airport connectivity score 628,786.0 97.5 10 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 5.4 73.0 32 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) 28.4 28.4 60 Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 4.7 61.9 34 Singapore

2.09 Electrification rate % pop. 100.0 100.0 = 1 Multiple (66)

2.10 Electric power transmission and distribution losses % output 5.7 98.3 23 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 2.2 99.8 24 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 6.4 89.8 22 Switzerland

0-100 (best) - 73.5 22 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 112.7 93.9 81 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 134.9 n/a 6 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 32.4 64.8 21 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 5.9 n/a 32 Korea, Rep.

3.05 Internet users % pop. 88.2 88.2 18 Iceland

0-100 (best) - 100.0 = 1 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change 1.6 100.0 = 1 Multiple (74)

4.02 Debt dynamics 0-100 (best) 100.0 100.0 = 1 Multiple (36)

0-100 (best) - 98.5 8 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 71.5 98.5 7 Multiple (4)

0-100 (best) - 81.0 12 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 12.2 81.4 = 26 Finland

6.02 Extent of staff training 1-7 (best) 5.0 67.2 15 Switzerland

6.03 Quality of vocational training 1-7 (best) 4.9 64.8 21 Switzerland

6.04 Skillset of graduates 1-7 (best) 5.0 66.9 18 Switzerland

6.05 Digital skills among population 1-7 (best) 5.1 69.1 23 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 4.8 63.5 26 United States

6.07 School life expectancy Years 22.9 100.0 = 1 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 4.9 65.3 13 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 15.1 87.3 = 46 Multiple (6)

Economy Profiles

77 | The Global Competitiveness Report 2018

Australia 14th/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 70.2 8 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 4.4 56.2 31 Singapore

7.02 Extent of market dominance 1-7 (best) 4.3 54.2 33 Switzerland

7.03 Competition in services 1-7 (best) 5.1 69.0 54 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 5.1 69.1 14 Singapore

7.05 Trade tariffs % duty 2.09 86.1 40 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 6.8 96.7 4 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 3.9 71.7 7 Germany

7.08 Services trade openness 0-100 (worst) 20.2 79.8 = 37 Ecuador

0-100 (best) - 68.5 22 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 12.0 83.3 = 44 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 3.3 37.8 110 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 4.4 56.3 66 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 4.5 58.6 105 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 4.8 63.0 17 Switzerland

8.06 Workers' rights 0-100 (best) 75.3 75.3 50 Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 2.8 30.3 138 Albania

8.08 Internal Labour mobility 1-7 (best) 4.4 55.9 81 Guinea

8.09 Reliance on professional management 1-7 (best) 6.0 84.0 5 Finland

8.10 Pay and productivity 1-7 (best) 4.6 59.8 30 United States

8.11 Female participation in Labour force ratio 0.94 92.3 18 Multiple (4)

8.12 Labour tax rate % 21.1 81.8 = 96 Multiple (26)

0-100 (best) - 85.6 13 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 136.4 100.0 = 15 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 4.7 61.9 18 United States

9.03 Venture capital availability 1-7 (best) 3.6 42.5 35 United States

9.04 Market capitalization % GDP 93.9 93.9 16 Multiple (12)

9.05 Insurance premium % GDP 5.8 96.2 = 18 Multiple (16)

9.06 Soundness of banks 1-7 (best) 6.4 89.4 4 Finland

9.07 Non-performing loans % loan portfolio value 1.0 99.0 10 Multiple (2)

9.08 Credit gap percentage points 3.1 97.2 110 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio 12.7 90.5 = 112 Multiple (72)

0-100 (best) - 72.3 25 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 1,135 n/a 19 China

10.02 Imports % GDP 21.4 n/a 127 Hong Kong SAR

0-100 (best) - 75.2 15 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 0.7 99.7 = 15 Multiple (2)

11.02 Time to start a business days 2.5 98.0 = 5 New Zealand

11.03 Insolvency recovery rate cents/$ 82.5 88.8 16 Norway

11.04 Insolvency regulatory framework 0-16 (best) 11.0 68.8 = 46 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 4.4 56.0 36 Israel

11.06 Willingness to delegate authority 1-7 (best) 5.7 78.1 8 Denmark

11.07 Growth of innovative companies 1-7 (best) 4.6 60.7 27 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 4.1 51.6 29 United States

0-100 (best) - 69.8 18 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 5.6 76.6 8 Canada

12.02 State of cluster development 1-7 (best) 4.2 53.8 41 United States

12.03 International co-inventions applications/million pop. 5.65 58.1 23 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 4.3 54.7 32 United States

12.05 Scientific publications H Index 812.7 99.2 10 Multiple (7)

12.06 Patent applications applications/million pop. 57.06 74.6 24 Multiple (8)

12.07 R&D expenditures % GDP 2.2 73.4 = 16 Multiple (7)

12.08 Quality of research institutions index 0.27 67.9 13 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 4.0 50.6 32 United States

12.10 Trademark applications applications/million pop. 3,981.82 89.2 25 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 77

Economy Profiles

79 | The Global Competitiveness Report 2018

Key Previous edition High income group average Europe and North America averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



22nd



18th



12th



46th



1st



15th



17th



17th



26th



28th



43rd



26th



15th Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

76 73

88

65

100 97

78

67 67 73

64 70

74

Austria 22nd / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 21st / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Inclusive Development Index 1-7 (best)

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -100 (perfect inequality)

8.8

47,290.0

0.9

0.35

5.5

0.6

5.9

5.4

0.7

30.5

Economy Profiles

The Global Competitiveness Report 2018 | 79

Austria 22nd/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 72.7 18 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 5.7 77.7 23 Finland

1.02 Homicide rate /100,000 pop. 0.7 99.5 18 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 99.9 99.9 66 Multiple (24)

1.04 Reliability of police services 1-7 (best) 6.1 84.2 14 Finland

1.05 Social capital 0-100 (high) 61.3 61.3 15 Australia

1.06 Budget transparency 0-100 (best) 57.7 57.7 = 61 Multiple (2)

1.07 Judicial independence 1-7 (best) 5.6 77.1 20 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 3.9 48.8 41 Finland

1.09 Freedom of the press 0-100 (worst) 14.0 86.0 11 Norway

1.10 Burden of government regulation 1-7 (best) 3.5 42.0 63 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 4.8 64.1 22 Singapore

1.12 E-Participation Index 0-1 (best) 0.83 82.6 44 Multiple (3)

1.13 Future orientation of government 1-7 (best) 4.2 54.0 34 Singapore

1.14 Incidence of corruption 0-100 (best) 75.0 75.0 = 16 New Zealand

1.15 Property rights 1-7 (best) 6.0 82.7 12 Finland

1.16 Intellectual property protection 1-7 (best) 5.9 81.2 12 Finland

1.17 Quality of land administration 0-30 (best) 23.0 76.7 = 29 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 6.1 85.2 8 Finland

1.19 Conflict of interest regulation 0-10 (best) 5.7 57.0 = 65 Multiple (2)

1.20 Shareholder governance 0-10 (best) 8.0 80.0 = 5 Kazakhstan

0-100 (best) - 88.3 12 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 81.0 81.0 = 26 United States

2.02 Quality of roads 1-7 (best) 5.9 81.4 10 Singapore

2.03 Railroad density km of roads/square km 58.6 100.0 = 13 Multiple (20)

2.04 Efficiency of train services 1-7 (best) 5.3 71.3 12 Switzerland

2.05 Airport connectivity score 118,724.5 65.3 37 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 5.1 67.7 45 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) n/a n/a n/a Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 3.6 42.9 87 Singapore

2.09 Electrification rate % pop. 100.0 100.0 = 1 Multiple (66)

2.10 Electric power transmission and distribution losses % output 4.4 99.6 14 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 0.8 100.0 = 19 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 6.8 95.9 10 Switzerland

0-100 (best) - 64.7 46 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 170.8 100.0 = 7 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 86.2 n/a 43 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 28.7 57.5 30 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 0.5 n/a 70 Korea, Rep.

3.05 Internet users % pop. 84.3 84.3 25 Iceland

0-100 (best) - 100.0 = 1 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change 1.6 100.0 = 1 Multiple (74)

4.02 Debt dynamics 0-100 (best) 100.0 100.0 = 1 Multiple (36)

0-100 (best) - 96.7 15 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 70.9 96.7 14 Multiple (4)

0-100 (best) - 78.4 17 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 12.3 82.0 = 23 Finland

6.02 Extent of staff training 1-7 (best) 5.0 67.0 17 Switzerland

6.03 Quality of vocational training 1-7 (best) 5.5 75.6 4 Switzerland

6.04 Skillset of graduates 1-7 (best) 5.1 68.4 13 Switzerland

6.05 Digital skills among population 1-7 (best) 4.8 63.8 36 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 4.7 60.9 36 United States

6.07 School life expectancy Years 16.1 89.3 34 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 4.1 50.9 35 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 10.3 99.2 10 Multiple (6)

Economy Profiles

81 | The Global Competitiveness Report 2018

Austria 22nd/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 66.5 17 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 4.2 53.7 38 Singapore

7.02 Extent of market dominance 1-7 (best) 4.9 64.9 11 Switzerland

7.03 Competition in services 1-7 (best) 5.6 76.0 11 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 4.9 64.9 26 Singapore

7.05 Trade tariffs % duty 1.13 92.4 30 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 3.0 33.7 112 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 3.7 67.9 12 Germany

7.08 Services trade openness 0-100 (worst) 17.8 82.2 = 30 Ecuador

0-100 (best) - 67.3 26 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 2.0 100.0 = 4 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 3.3 37.6 112 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 5.5 74.8 11 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 2.4 23.3 139 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 5.7 77.5 3 Switzerland

8.06 Workers' rights 0-100 (best) 100.0 100.0 = 1 Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 3.8 47.0 96 Albania

8.08 Internal Labour mobility 1-7 (best) 3.7 44.8 126 Guinea

8.09 Reliance on professional management 1-7 (best) 5.5 74.7 21 Finland

8.10 Pay and productivity 1-7 (best) 4.6 59.9 29 United States

8.11 Female participation in Labour force ratio 0.90 87.9 26 Multiple (4)

8.12 Labour tax rate % 34.2 63.6 = 127 Multiple (26)

0-100 (best) - 72.9 28 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 85.9 90.4 36 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 4.5 57.9 30 United States

9.03 Venture capital availability 1-7 (best) 3.3 38.7 44 United States

9.04 Market capitalization % GDP 26.0 26.0 64 Multiple (12)

9.05 Insurance premium % GDP 4.3 72.3 = 28 Multiple (16)

9.06 Soundness of banks 1-7 (best) 5.6 75.9 37 Finland

9.07 Non-performing loans % loan portfolio value 2.7 95.6 44 Multiple (2)

9.08 Credit gap percentage points -5.9 100.0 = 31 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio 16.9 99.8 = 56 Multiple (72)

0-100 (best) - 64.3 43 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 400 n/a 44 China

10.02 Imports % GDP 55.3 n/a 44 Hong Kong SAR

0-100 (best) - 69.9 26 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 5.1 97.5 59 Multiple (2)

11.02 Time to start a business days 21.0 79.4 = 103 New Zealand

11.03 Insolvency recovery rate cents/$ 80.0 86.1 21 Norway

11.04 Insolvency regulatory framework 0-16 (best) 11.0 68.8 = 46 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 3.7 45.5 91 Israel

11.06 Willingness to delegate authority 1-7 (best) 5.3 71.9 19 Denmark

11.07 Growth of innovative companies 1-7 (best) 4.7 62.2 22 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 3.9 47.5 41 United States

0-100 (best) - 74.3 15 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 4.5 59.0 57 Canada

12.02 State of cluster development 1-7 (best) 5.0 66.7 15 United States

12.03 International co-inventions applications/million pop. 34.66 100.0 = 3 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 4.8 63.4 16 United States

12.05 Scientific publications H Index 552.3 93.5 17 Multiple (7)

12.06 Patent applications applications/million pop. 231.45 100.0 8 Multiple (8)

12.07 R&D expenditures % GDP 3.1 100.0 = 6 Multiple (7)

12.08 Quality of research institutions index 0.05 14.9 33 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 3.7 45.2 48 United States

12.10 Trademark applications applications/million pop. 11,366.91 100.0 = 7 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 81

Economy Profiles

83 | The Global Competitiveness Report 2018

Key Previous edition Upper middle income group average Eurasia averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



69th



58th



46th



69th



126th



91st



54th



37th



40th



96th



65th



31st



71st Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

60 56

74

54 60

73 68

61 64

53 54

69

36

Azerbaijan 69th / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 65th / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Inclusive Development Index 1-7 (best)

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -100 (perfect inequality)

9.8

4,140.7

3.0

0.14

5.0

6.5

2.2

4.7

0.7

16.6

Economy Profiles

The Global Competitiveness Report 2018 | 83

Azerbaijan 69th/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 55.8 58 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 5.3 71.7 = 39 Finland

1.02 Homicide rate /100,000 pop. 2.1 94.4 63 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 99.7 99.7 78 Multiple (24)

1.04 Reliability of police services 1-7 (best) 4.7 61.7 = 53 Finland

1.05 Social capital 0-100 (high) 41.1 41.1 123 Australia

1.06 Budget transparency 0-100 (best) 34.6 34.6 = 116 Multiple (2)

1.07 Judicial independence 1-7 (best) 4.4 56.8 = 49 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 4.4 56.7 = 22 Finland

1.09 Freedom of the press 0-100 (worst) 59.7 40.3 133 Norway

1.10 Burden of government regulation 1-7 (best) 4.6 60.7 = 12 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 4.6 60.5 = 28 Singapore

1.12 E-Participation Index 0-1 (best) 0.68 68.0 76 Multiple (3)

1.13 Future orientation of government 1-7 (best) 4.7 62.1 = 20 Singapore

1.14 Incidence of corruption 0-100 (best) 31.0 31.0 102 New Zealand

1.15 Property rights 1-7 (best) 4.8 63.2 = 46 Finland

1.16 Intellectual property protection 1-7 (best) 4.8 63.0 = 36 Finland

1.17 Quality of land administration 0-30 (best) 14.5 48.3 74 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 4.3 55.0 = 88 Finland

1.19 Conflict of interest regulation 0-10 (best) 7.7 77.0 = 16 Multiple (2)

1.20 Shareholder governance 0-10 (best) 7.3 73.0 15 Kazakhstan

0-100 (best) - 73.6 46 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 50.8 50.8 = 89 United States

2.02 Quality of roads 1-7 (best) 4.8 63.0 = 34 Singapore

2.03 Railroad density km of roads/square km 23.9 59.9 = 32 Multiple (20)

2.04 Efficiency of train services 1-7 (best) 4.8 63.2 = 17 Switzerland

2.05 Airport connectivity score 23,795.6 41.9 79 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 5.8 80.0 = 12 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) n/a n/a n/a Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 4.9 64.4 = 29 Singapore

2.09 Electrification rate % pop. 100.0 100.0 = 1 Multiple (66)

2.10 Electric power transmission and distribution losses % output 11.7 92.0 77 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 9.6 92.3 63 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 4.9 65.7 = 65 Switzerland

0-100 (best) - 54.0 69 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 103.0 85.9 97 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 56.8 n/a 88 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 18.4 36.7 53 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 1.3 n/a 55 Korea, Rep.

3.05 Internet users % pop. 78.2 78.2 36 Iceland

0-100 (best) - 59.8 126 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change 12.8 75.6 128 Multiple (74)

4.02 Debt dynamics 0-100 (best) 44.0 44.0 111 Multiple (36)

0-100 (best) - 73.1 91 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 63.4 73.1 90 Multiple (4)

0-100 (best) - 67.8 54 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 10.5 69.8 = 50 Finland

6.02 Extent of staff training 1-7 (best) 4.2 52.5 = 56 Switzerland

6.03 Quality of vocational training 1-7 (best) 4.4 56.6 = 49 Switzerland

6.04 Skillset of graduates 1-7 (best) 4.7 61.8 = 32 Switzerland

6.05 Digital skills among population 1-7 (best) 5.2 70.7 = 15 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 4.7 62.0 = 31 United States

6.07 School life expectancy Years 12.7 70.6 = 88 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 4.2 54.2 = 27 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 15.5 86.3 48 Multiple (6)

Economy Profiles

85 | The Global Competitiveness Report 2018

Azerbaijan 69th/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 61.4 37 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 4.6 60.4 = 20 Singapore

7.02 Extent of market dominance 1-7 (best) 4.2 53.2 = 37 Switzerland

7.03 Competition in services 1-7 (best) 5.0 66.7 = 63 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 4.6 59.6 = 46 Singapore

7.05 Trade tariffs % duty 7.91 47.3 90 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 6.1 85.1 62 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 2.6 39.3 82 Germany

7.08 Services trade openness 0-100 (worst) n/a 82.2 n/a Ecuador

0-100 (best) - 63.6 40 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 21.7 63.2 = 96 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 4.7 61.4 = 12 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 4.9 65.1 = 32 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 5.3 72.4 = 36 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 4.2 53.2 = 37 Switzerland

8.06 Workers' rights 0-100 (best) n/a 55.3 n/a Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 4.7 62.0 = 21 Albania

8.08 Internal Labour mobility 1-7 (best) 4.6 60.5 = 56 Guinea

8.09 Reliance on professional management 1-7 (best) 4.6 59.7 = 45 Finland

8.10 Pay and productivity 1-7 (best) 4.8 63.4 = 15 United States

8.11 Female participation in Labour force ratio 0.70 62.3 74 Multiple (4)

8.12 Labour tax rate % 24.8 76.7 = 106 Multiple (26)

0-100 (best) - 52.6 96 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 31.9 33.6 99 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 4.1 52.1 = 40 United States

9.03 Venture capital availability 1-7 (best) 3.9 47.8 = 23 United States

9.04 Market capitalization % GDP 0.0 0.0 119 Multiple (12)

9.05 Insurance premium % GDP 0.6 9.3 = 119 Multiple (16)

9.06 Soundness of banks 1-7 (best) 4.5 57.8 = 92 Finland

9.07 Non-performing loans % loan portfolio value 13.8 73.1 118 Multiple (2)

9.08 Credit gap percentage points -4.2 100.0 41 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio 18.5 100.0 = 37 Multiple (72)

0-100 (best) - 54.0 65 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 156 n/a 68 China

10.02 Imports % GDP 40.8 n/a 76 Hong Kong SAR

0-100 (best) - 68.8 31 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 1.8 99.1 38 Multiple (2)

11.02 Time to start a business days 4.5 96.0 = 17 New Zealand

11.03 Insolvency recovery rate cents/$ 40.2 43.3 59 Norway

11.04 Insolvency regulatory framework 0-16 (best) 13.0 81.3 17 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 4.7 61.4 = 21 Israel

11.06 Willingness to delegate authority 1-7 (best) 4.5 57.7 = 56 Denmark

11.07 Growth of innovative companies 1-7 (best) 4.5 58.2 = 35 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 4.2 53.5 = 25 United States

0-100 (best) - 36.0 71 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 4.9 64.3 = 36 Canada

12.02 State of cluster development 1-7 (best) 4.3 55.7 = 34 United States

12.03 International co-inventions applications/million pop. 0.03 1.0 99 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 4.4 56.8 = 30 United States

12.05 Scientific publications H Index 79.7 65.0 108 Multiple (7)

12.06 Patent applications applications/million pop. 0.21 3.5 87 Multiple (8)

12.07 R&D expenditures % GDP 0.2 7.4 90 Multiple (7)

12.08 Quality of research institutions index 0.00 0.8 86 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 4.2 52.7 = 27 United States

12.10 Trademark applications applications/million pop. 128.58 52.3 101 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 85

Economy Profiles

87 | The Global Competitiveness Report 2018

Key Previous edition High income group average Middle East and North Africa averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



50th



42nd



30th



38th



119th



74th



28th



28th



46th



33rd



90th



54th



72nd Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

64 61

78

67 65

79 74

63 63 70

46

62

36

Bahrain 50th / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 46th / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita Global Gender Gap Index 0-1 (gender parity)

1.5

24,028.7

3.7

0.06

1.2

3.9

8.7 0.6

Economy Profiles

The Global Competitiveness Report 2018 | 87

Bahrain 50th/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 60.9 42 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 5.8 80.3 = 15 Finland

1.02 Homicide rate /100,000 pop. 0.5 99.9 = 11 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 98.1 98.1 103 Multiple (24)

1.04 Reliability of police services 1-7 (best) 5.7 77.6 = 26 Finland

1.05 Social capital 0-100 (high) 52.0 52.0 57 Australia

1.06 Budget transparency 0-100 (best) 53.8 53.8 = 67 Multiple (2)

1.07 Judicial independence 1-7 (best) 5.1 68.2 = 31 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 4.7 61.7 = 14 Finland

1.09 Freedom of the press 0-100 (worst) 60.9 39.2 135 Norway

1.10 Burden of government regulation 1-7 (best) 4.7 60.8 = 9 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 4.8 63.0 = 23 Singapore

1.12 E-Participation Index 0-1 (best) 0.80 79.8 52 Multiple (3)

1.13 Future orientation of government 1-7 (best) 5.3 72.0 = 6 Singapore

1.14 Incidence of corruption 0-100 (best) 36.0 36.0 87 New Zealand

1.15 Property rights 1-7 (best) 5.5 74.4 = 27 Finland

1.16 Intellectual property protection 1-7 (best) 5.0 67.3 = 30 Finland

1.17 Quality of land administration 0-30 (best) 17.5 58.3 = 56 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 5.4 73.9 = 29 Finland

1.19 Conflict of interest regulation 0-10 (best) 5.3 53.0 = 84 Multiple (2)

1.20 Shareholder governance 0-10 (best) 4.7 47.0 = 90 Kazakhstan

0-100 (best) - 78.0 30 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) n/a n/a n/a United States

2.02 Quality of roads 1-7 (best) 5.1 69.1 = 27 Singapore

2.03 Railroad density km of roads/square km n/a n/a n/a Multiple (20)

2.04 Efficiency of train services 1-7 (best) 2.7 28.8 = 88 Switzerland

2.05 Airport connectivity score 54,997.0 53.3 60 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 5.3 70.9 = 36 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) 41.0 41.0 40 Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 4.8 64.0 = 30 Singapore

2.09 Electrification rate % pop. 99.9 99.9 69 Multiple (66)

2.10 Electric power transmission and distribution losses % output 2.4 100.0 = 4 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 10.9 90.9 70 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 6.3 87.9 = 24 Switzerland

0-100 (best) - 66.7 38 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 158.4 100.0 = 10 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 147.3 n/a 5 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 14.3 28.6 60 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 0.9 n/a 62 Korea, Rep.

3.05 Internet users % pop. 98.0 98.0 3 Iceland

0-100 (best) - 65.3 119 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change 2.1 100.0 = 1 Multiple (74)

4.02 Debt dynamics 0-100 (best) 30.6 30.6 136 Multiple (36)

0-100 (best) - 79.2 74 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 65.4 79.2 73 Multiple (4)

0-100 (best) - 73.6 28 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 10.0 66.7 = 59 Finland

6.02 Extent of staff training 1-7 (best) 4.7 61.9 = 28 Switzerland

6.03 Quality of vocational training 1-7 (best) 4.7 61.3 = 30 Switzerland

6.04 Skillset of graduates 1-7 (best) 4.7 61.9 = 31 Switzerland

6.05 Digital skills among population 1-7 (best) n/a n/a n/a Sweden

6.06 Ease of finding skilled employees 1-7 (best) 4.7 61.6 = 33 United States

6.07 School life expectancy Years 16.3 90.8 26 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 4.3 55.4 = 26 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 12.1 94.9 26 Multiple (6)

Economy Profiles

89 | The Global Competitiveness Report 2018

Bahrain 50th/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 63.0 28 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 4.8 63.1 = 13 Singapore

7.02 Extent of market dominance 1-7 (best) 4.2 53.3 = 36 Switzerland

7.03 Competition in services 1-7 (best) 5.4 73.0 = 24 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 5.0 67.1 = 22 Singapore

7.05 Trade tariffs % duty 5.06 66.3 66 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 6.4 89.8 42 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 2.7 41.7 62 Germany

7.08 Services trade openness 0-100 (worst) 50.8 49.2 = 91 Ecuador

0-100 (best) - 63.0 46 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 13.6 80.1 = 55 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 4.4 56.9 = 28 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 5.2 70.0 = 18 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 5.6 77.0 = 15 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 4.4 56.3 = 34 Switzerland

8.06 Workers' rights 0-100 (best) 60.8 60.8 101 Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 4.9 65.8 = 12 Albania

8.08 Internal Labour mobility 1-7 (best) 3.8 47.1 = 119 Guinea

8.09 Reliance on professional management 1-7 (best) 4.8 63.2 = 38 Finland

8.10 Pay and productivity 1-7 (best) 4.7 61.9 = 19 United States

8.11 Female participation in Labour force ratio 0.44 30.0 109 Multiple (4)

8.12 Labour tax rate % 13.5 92.4 = 56 Multiple (26)

0-100 (best) - 70.3 33 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 69.1 72.7 = 43 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 4.5 58.1 = 28 United States

9.03 Venture capital availability 1-7 (best) 3.8 47.2 = 24 United States

9.04 Market capitalization % GDP 62.7 62.7 33 Multiple (12)

9.05 Insurance premium % GDP 1.8 29.3 = 69 Multiple (16)

9.06 Soundness of banks 1-7 (best) 5.4 73.2 = 46 Finland

9.07 Non-performing loans % loan portfolio value 5.9 89.1 77 Multiple (2)

9.08 Credit gap percentage points -1.1 100.0 = 58 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio 18.5 100.0 = 35 Multiple (72)

0-100 (best) - 45.8 90 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 64 n/a 89 China

10.02 Imports % GDP 51.7 n/a 54 Hong Kong SAR

0-100 (best) - 61.9 54 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 1.0 99.5 22 Multiple (2)

11.02 Time to start a business days 9.3 91.2 = 59 New Zealand

11.03 Insolvency recovery rate cents/$ 41.9 45.1 52 Norway

11.04 Insolvency regulatory framework 0-16 (best) 7.0 43.8 = 96 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 4.5 58.4 = 27 Israel

11.06 Willingness to delegate authority 1-7 (best) 4.7 61.2 = 41 Denmark

11.07 Growth of innovative companies 1-7 (best) 4.2 52.7 = 54 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 3.6 43.2 = 60 United States

0-100 (best) - 35.9 72 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) n/a n/a n/a Canada

12.02 State of cluster development 1-7 (best) 4.6 60.3 = 27 United States

12.03 International co-inventions applications/million pop. 0.54 13.3 55 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 4.0 50.1 = 42 United States

12.05 Scientific publications H Index 63.3 61.7 117 Multiple (7)

12.06 Patent applications applications/million pop. 1.81 19.0 56 Multiple (8)

12.07 R&D expenditures % GDP 0.1 3.4 = 109 Multiple (7)

12.08 Quality of research institutions index 0.00 0.4 107 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 3.8 46.9 = 42 United States

12.10 Trademark applications applications/million pop. 577.27 68.4 66 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 89

Economy Profiles

91 | The Global Competitiveness Report 2018

Key Previous edition Lower middle income group average South Asia averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



103rd



108th



109th



102nd



88th



96th



116th



123rd



115th



103rd



36th



120th



102nd Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

52 46

53

40

73 71

44 48 51

52

67

50

31

Bangladesh 103rd / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 102nd / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Inclusive Development Index 1-7 (best)

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -100 (perfect inequality)

163.2

1,601.7

6.1

0.54

4.4

0.9

0.8

4.0

0.7

32.4

Economy Profiles

The Global Competitiveness Report 2018 | 91

Bangladesh 103rd/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 46.5 108 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 4.3 55.5 97 Finland

1.02 Homicide rate /100,000 pop. 2.5 93.2 = 66 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 85.9 85.9 126 Multiple (24)

1.04 Reliability of police services 1-7 (best) 3.4 40.5 113 Finland

1.05 Social capital 0-100 (high) 43.4 43.4 119 Australia

1.06 Budget transparency 0-100 (best) 65.4 65.4 = 42 Multiple (2)

1.07 Judicial independence 1-7 (best) 3.3 38.0 93 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 3.0 33.4 84 Finland

1.09 Freedom of the press 0-100 (worst) 48.6 51.4 119 Norway

1.10 Burden of government regulation 1-7 (best) 3.4 40.6 69 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 3.2 36.4 93 Singapore

1.12 E-Participation Index 0-1 (best) 0.80 80.3 50 Multiple (3)

1.13 Future orientation of government 1-7 (best) 3.7 44.8 71 Singapore

1.14 Incidence of corruption 0-100 (best) 28.0 28.0 120 New Zealand

1.15 Property rights 1-7 (best) 4.1 51.0 89 Finland

1.16 Intellectual property protection 1-7 (best) 3.4 39.2 119 Finland

1.17 Quality of land administration 0-30 (best) 4.5 15.0 = 135 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 3.6 44.0 124 Finland

1.19 Conflict of interest regulation 0-10 (best) 6.3 63.0 = 45 Multiple (2)

1.20 Shareholder governance 0-10 (best) 5.0 50.0 = 81 Kazakhstan

0-100 (best) - 53.4 109 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 34.3 34.3 = 121 United States

2.02 Quality of roads 1-7 (best) 3.1 35.2 111 Singapore

2.03 Railroad density km of roads/square km 19.2 48.0 = 40 Multiple (20)

2.04 Efficiency of train services 1-7 (best) 3.2 36.3 68 Switzerland

2.05 Airport connectivity score 48,504.1 51.4 63 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 3.7 45.5 109 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) 10.8 10.8 81 Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 3.5 40.9 93 Singapore

2.09 Electrification rate % pop. 75.0 75.0 108 Multiple (66)

2.10 Electric power transmission and distribution losses % output 11.0 92.7 71 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 41.0 60.2 126 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 3.9 48.0 106 Switzerland

0-100 (best) - 39.8 102 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 88.1 73.4 110 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 30.0 n/a 112 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 4.4 8.9 90 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 2.4 n/a 44 Korea, Rep.

3.05 Internet users % pop. 18.2 18.2 122 Iceland

0-100 (best) - 72.6 88 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change 5.7 95.3 105 Multiple (74)

4.02 Debt dynamics 0-100 (best) 49.9 49.9 80 Multiple (36)

0-100 (best) - 71.2 96 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 62.8 71.2 95 Multiple (4)

0-100 (best) - 44.0 116 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 5.2 34.7 = 119 Finland

6.02 Extent of staff training 1-7 (best) 3.3 38.2 126 Switzerland

6.03 Quality of vocational training 1-7 (best) 3.4 39.5 122 Switzerland

6.04 Skillset of graduates 1-7 (best) 3.4 40.1 121 Switzerland

6.05 Digital skills among population 1-7 (best) 3.3 38.9 120 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 3.7 44.4 105 United States

6.07 School life expectancy Years 11.7 65.0 = 105 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 2.9 31.9 107 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 33.9 40.2 114 Multiple (6)

Economy Profiles

93 | The Global Competitiveness Report 2018

Bangladesh 103rd/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 47.8 123 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 3.5 41.3 86 Singapore

7.02 Extent of market dominance 1-7 (best) 3.1 35.2 115 Switzerland

7.03 Competition in services 1-7 (best) 4.5 57.9 110 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 4.7 62.1 36 Singapore

7.05 Trade tariffs % duty 13.21 11.9 128 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 6.5 92.0 33 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 2.3 32.5 115 Germany

7.08 Services trade openness 0-100 (worst) 44.2 55.8 = 85 Ecuador

0-100 (best) - 50.9 115 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 31.0 43.8 = 125 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 4.0 50.6 50 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 4.2 53.7 87 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 4.8 63.2 81 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 2.6 26.8 107 Switzerland

8.06 Workers' rights 0-100 (best) 62.9 62.9 92 Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 4.1 51.8 67 Albania

8.08 Internal Labour mobility 1-7 (best) 4.3 54.9 87 Guinea

8.09 Reliance on professional management 1-7 (best) 3.9 48.5 90 Finland

8.10 Pay and productivity 1-7 (best) 3.8 46.8 78 United States

8.11 Female participation in Labour force ratio 0.26 7.9 128 Multiple (4)

8.12 Labour tax rate % 0.0 100.0 = 1 Multiple (26)

0-100 (best) - 51.8 103 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 44.5 46.8 79 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 3.7 44.7 82 United States

9.03 Venture capital availability 1-7 (best) 2.6 26.3 98 United States

9.04 Market capitalization % GDP 25.0 25.0 = 69 Multiple (12)

9.05 Insurance premium % GDP 0.7 12.3 = 104 Multiple (16)

9.06 Soundness of banks 1-7 (best) 3.5 41.6 124 Finland

9.07 Non-performing loans % loan portfolio value 8.4 84.0 = 92 Multiple (2)

9.08 Credit gap percentage points -1.7 100.0 = 53 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio 10.8 85.3 = 116 Multiple (72)

0-100 (best) - 66.5 36 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 626 n/a 32 China

10.02 Imports % GDP 23.7 n/a 120 Hong Kong SAR

0-100 (best) - 50.0 120 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 22.3 88.9 107 Multiple (2)

11.02 Time to start a business days 19.5 80.9 = 101 New Zealand

11.03 Insolvency recovery rate cents/$ 28.3 30.5 93 Norway

11.04 Insolvency regulatory framework 0-16 (best) 4.0 25.0 = 128 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 3.8 46.7 82 Israel

11.06 Willingness to delegate authority 1-7 (best) 3.8 46.8 113 Denmark

11.07 Growth of innovative companies 1-7 (best) 3.7 45.3 97 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 3.1 35.8 108 United States

0-100 (best) - 30.6 102 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 4.1 50.9 99 Canada

12.02 State of cluster development 1-7 (best) 3.8 46.8 63 United States

12.03 International co-inventions applications/million pop. 0.03 0.8 105 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 3.0 32.7 125 United States

12.05 Scientific publications H Index 158.3 75.1 63 Multiple (7)

12.06 Patent applications applications/million pop. 0.04 0.7 106 Multiple (8)

12.07 R&D expenditures % GDP 0.4 13.3 = 72 Multiple (7)

12.08 Quality of research institutions index 0.01 3.5 58 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 3.3 39.1 77 United States

12.10 Trademark applications applications/million pop. 55.15 43.3 111 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 93

Economy Profiles

95 | The Global Competitiveness Report 2018

Key Previous edition High income group average Europe and North America averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



21st



21st



13th



40th



1st



28th



16th



22nd



37th



24th



33rd



18th



17th Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

77 70

86

66

100 94

80

64 64

78 69

74 73

Belgium 21st / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 19th / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Inclusive Development Index 1-7 (best)

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -100 (perfect inequality)

11.4

43,582.2

0.9

0.42

7.1

2.6

6.7

5.1

0.7

27.7

Economy Profiles

The Global Competitiveness Report 2018 | 95

Belgium 21st/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 69.8 21 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 5.7 78.4 19 Finland

1.02 Homicide rate /100,000 pop. 1.9 95.1 = 60 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 98.0 98.0 104 Multiple (24)

1.04 Reliability of police services 1-7 (best) 5.6 76.0 30 Finland

1.05 Social capital 0-100 (high) 57.7 57.7 25 Australia

1.06 Budget transparency 0-100 (best) 61.5 61.5 = 49 Multiple (2)

1.07 Judicial independence 1-7 (best) 5.7 79.0 16 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 4.2 53.2 27 Finland

1.09 Freedom of the press 0-100 (worst) 13.2 86.8 7 Norway

1.10 Burden of government regulation 1-7 (best) 3.1 35.0 92 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 4.2 53.2 41 Singapore

1.12 E-Participation Index 0-1 (best) 0.76 75.8 58 Multiple (3)

1.13 Future orientation of government 1-7 (best) 3.8 47.2 62 Singapore

1.14 Incidence of corruption 0-100 (best) 75.0 75.0 16 New Zealand

1.15 Property rights 1-7 (best) 5.7 78.6 19 Finland

1.16 Intellectual property protection 1-7 (best) 6.0 83.5 7 Finland

1.17 Quality of land administration 0-30 (best) 22.5 75.0 = 31 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 5.8 80.6 15 Finland

1.19 Conflict of interest regulation 0-10 (best) 7.0 70.0 = 23 Multiple (2)

1.20 Shareholder governance 0-10 (best) 5.0 50.0 = 81 Kazakhstan

0-100 (best) - 86.5 13 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 86.6 86.6 = 19 United States

2.02 Quality of roads 1-7 (best) 4.4 56.4 52 Singapore

2.03 Railroad density km of roads/square km 118.0 100.0 = 2 Multiple (20)

2.04 Efficiency of train services 1-7 (best) 4.1 51.5 41 Switzerland

2.05 Airport connectivity score 97,023.4 62.0 42 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 5.6 76.7 17 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) 83.1 83.1 9 Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 5.6 76.0 10 Singapore

2.09 Electrification rate % pop. 100.0 100.0 = 1 Multiple (66)

2.10 Electric power transmission and distribution losses % output 4.2 99.8 11 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 0.6 100.0 = 12 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 6.8 95.9 9 Switzerland

0-100 (best) - 66.1 40 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 104.7 87.2 93 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 75.1 n/a 59 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 38.3 76.6 11 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 0.1 n/a 87 Korea, Rep.

3.05 Internet users % pop. 86.5 86.5 22 Iceland

0-100 (best) - 100.0 = 1 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change 2.0 100.0 = 1 Multiple (74)

4.02 Debt dynamics 0-100 (best) 100.0 100.0 = 1 Multiple (36)

0-100 (best) - 94.1 28 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 70.1 94.1 27 Multiple (4)

0-100 (best) - 79.5 16 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 11.9 79.5 = 30 Finland

6.02 Extent of staff training 1-7 (best) 5.0 66.6 18 Switzerland

6.03 Quality of vocational training 1-7 (best) 5.1 67.8 15 Switzerland

6.04 Skillset of graduates 1-7 (best) 5.0 67.5 15 Switzerland

6.05 Digital skills among population 1-7 (best) 4.8 63.8 35 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 4.7 62.1 30 United States

6.07 School life expectancy Years 19.8 100.0 = 2 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 4.0 49.3 39 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 11.2 96.9 = 16 Multiple (6)

Economy Profiles

97 | The Global Competitiveness Report 2018

Belgium 21st/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 64.3 22 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 4.1 51.4 46 Singapore

7.02 Extent of market dominance 1-7 (best) 4.9 65.7 10 Switzerland

7.03 Competition in services 1-7 (best) 5.4 72.9 26 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 4.4 56.4 69 Singapore

7.05 Trade tariffs % duty 1.13 92.4 12 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 3.0 33.7 112 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 3.7 66.6 14 Germany

7.08 Services trade openness 0-100 (worst) 22.5 77.5 = 45 Ecuador

0-100 (best) - 64.4 37 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 19.7 67.4 = 86 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 3.2 37.5 115 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 4.6 60.5 47 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 4.5 58.5 106 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 4.6 59.2 25 Switzerland

8.06 Workers' rights 0-100 (best) 94.8 94.8 9 Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 4.7 61.1 23 Albania

8.08 Internal Labour mobility 1-7 (best) 4.0 50.0 107 Guinea

8.09 Reliance on professional management 1-7 (best) 5.7 78.4 14 Finland

8.10 Pay and productivity 1-7 (best) 4.4 56.8 45 United States

8.11 Female participation in Labour force ratio 0.91 88.9 24 Multiple (4)

8.12 Labour tax rate % 46.2 46.9 138 Multiple (26)

0-100 (best) - 78.4 24 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 61.4 64.7 53 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 4.5 58.4 27 United States

9.03 Venture capital availability 1-7 (best) 3.8 46.8 27 United States

9.04 Market capitalization % GDP 81.1 81.1 25 Multiple (12)

9.05 Insurance premium % GDP 6.2 100.0 = 16 Multiple (16)

9.06 Soundness of banks 1-7 (best) 5.3 71.3 52 Finland

9.07 Non-performing loans % loan portfolio value 3.4 94.1 55 Multiple (2)

9.08 Credit gap percentage points 6.1 89.2 120 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio 18.3 100.0 = 38 Multiple (72)

0-100 (best) - 68.9 33 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 481 n/a 36 China

10.02 Imports % GDP 105.0 n/a 6 Hong Kong SAR

0-100 (best) - 73.8 18 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 5.6 97.2 62 Multiple (2)

11.02 Time to start a business days 4.0 96.5 = 12 New Zealand

11.03 Insolvency recovery rate cents/$ 84.6 91.1 13 Norway

11.04 Insolvency regulatory framework 0-16 (best) 11.5 71.9 = 38 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 3.8 46.1 85 Israel

11.06 Willingness to delegate authority 1-7 (best) 5.5 75.7 13 Denmark

11.07 Growth of innovative companies 1-7 (best) 4.5 59.2 32 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 4.2 53.0 26 United States

0-100 (best) - 73.4 17 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 4.8 62.7 43 Canada

12.02 State of cluster development 1-7 (best) 4.9 64.9 17 United States

12.03 International co-inventions applications/million pop. 24.76 99.7 8 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 4.8 63.3 17 United States

12.05 Scientific publications H Index 674.7 96.5 13 Multiple (7)

12.06 Patent applications applications/million pop. 113.10 87.0 17 Multiple (8)

12.07 R&D expenditures % GDP 2.5 81.9 12 Multiple (7)

12.08 Quality of research institutions index 0.09 24.5 24 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 4.4 57.0 20 United States

12.10 Trademark applications applications/million pop. 7,687.03 96.3 15 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 97

Economy Profiles

99 | The Global Competitiveness Report 2018

Key Previous edition Low income group average Sub-Saharan Africa averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



123rd



114th



126th



133rd



94th



121st



119th



86th



118th



132nd



125th



105th



126th Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

44 45 41

20

72

50 42

54 51 44

35

53

27

Benin 123rd / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 122nd / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -100 (perfect inequality)

11.1

830.4

4.1

0.02

2.5

2.8

1.4

0.7

47.8

Economy Profiles

The Global Competitiveness Report 2018 | 99

Benin 123rd/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 45.1 114 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 4.4 57.0 93 Finland

1.02 Homicide rate /100,000 pop. 6.2 80.7 = 97 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 100.0 100.0 = 1 Multiple (24)

1.04 Reliability of police services 1-7 (best) 4.7 61.1 54 Finland

1.05 Social capital 0-100 (high) 39.1 39.1 130 Australia

1.06 Budget transparency 0-100 (best) 19.2 19.2 = 132 Multiple (2)

1.07 Judicial independence 1-7 (best) 3.1 34.9 98 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 3.3 38.4 68 Finland

1.09 Freedom of the press 0-100 (worst) 30.2 69.8 68 Norway

1.10 Burden of government regulation 1-7 (best) 3.3 38.5 75 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 3.9 47.8 57 Singapore

1.12 E-Participation Index 0-1 (best) 0.37 37.1 119 Multiple (3)

1.13 Future orientation of government 1-7 (best) 3.6 42.7 79 Singapore

1.14 Incidence of corruption 0-100 (best) 39.0 39.0 73 New Zealand

1.15 Property rights 1-7 (best) 3.9 48.9 100 Finland

1.16 Intellectual property protection 1-7 (best) 3.7 44.6 98 Finland

1.17 Quality of land administration 0-30 (best) 6.5 21.7 128 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 3.8 47.2 116 Finland

1.19 Conflict of interest regulation 0-10 (best) 4.3 43.0 = 112 Multiple (2)

1.20 Shareholder governance 0-10 (best) 3.7 37.0 = 112 Kazakhstan

0-100 (best) - 41.0 126 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 74.3 74.3 = 48 United States

2.02 Quality of roads 1-7 (best) 2.9 31.0 116 Singapore

2.03 Railroad density km of roads/square km 6.6 16.5 = 62 Multiple (20)

2.04 Efficiency of train services 1-7 (best) 1.5 8.8 131 Switzerland

2.05 Airport connectivity score 864.6 12.7 132 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 3.5 41.4 116 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) 18.4 18.4 65 Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 3.0 34.0 107 Singapore

2.09 Electrification rate % pop. 31.9 31.9 128 Multiple (66)

2.10 Electric power transmission and distribution losses % output 18.9 84.4 112 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 41.7 59.5 128 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 3.0 33.8 120 Switzerland

0-100 (best) - 20.0 133 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 78.5 65.4 122 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 12.0 n/a 134 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 0.3 0.5 122 Switzerland

3.04 Fibre Internet subscriptions /100 pop. n/a n/a n/a Korea, Rep.

3.05 Internet users % pop. 12.0 12.0 132 Iceland

0-100 (best) - 71.6 94 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change -0.3 97.7 97 Multiple (74)

4.02 Debt dynamics 0-100 (best) 45.6 45.6 107 Multiple (36)

0-100 (best) - 49.8 121 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 55.9 49.8 120 Multiple (4)

0-100 (best) - 42.5 119 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 3.4 22.7 = 130 Finland

6.02 Extent of staff training 1-7 (best) 3.2 37.3 128 Switzerland

6.03 Quality of vocational training 1-7 (best) 4.3 55.4 52 Switzerland

6.04 Skillset of graduates 1-7 (best) 3.9 48.6 78 Switzerland

6.05 Digital skills among population 1-7 (best) 3.4 39.8 117 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 4.8 63.7 25 United States

6.07 School life expectancy Years 12.8 71.1 = 86 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 3.5 41.9 63 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 45.0 12.4 = 129 Multiple (6)

Economy Profiles

101 | The Global Competitiveness Report 2018

Benin 123rd/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 54.0 86 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 3.8 46.2 64 Singapore

7.02 Extent of market dominance 1-7 (best) 3.8 46.3 57 Switzerland

7.03 Competition in services 1-7 (best) 4.5 59.0 109 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 4.1 51.9 100 Singapore

7.05 Trade tariffs % duty 10.14 32.4 104 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 6.7 94.7 10 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 2.6 39.1 83 Germany

7.08 Services trade openness 0-100 (worst) n/a 69.8 n/a Ecuador

0-100 (best) - 50.6 118 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 11.6 84.1 = 41 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 4.3 54.6 35 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 4.6 59.3 53 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 5.5 75.0 23 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 1.9 15.8 130 Switzerland

8.06 Workers' rights 0-100 (best) 62.9 62.9 92 Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 4.7 62.0 20 Albania

8.08 Internal Labour mobility 1-7 (best) 5.5 74.9 3 Guinea

8.09 Reliance on professional management 1-7 (best) 3.5 42.2 111 Finland

8.10 Pay and productivity 1-7 (best) 2.9 32.2 130 United States

8.11 Female participation in Labour force ratio 0.29 11.6 122 Multiple (4)

8.12 Labour tax rate % 26.4 74.4 = 115 Multiple (26)

0-100 (best) - 43.8 132 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 21.4 22.6 114 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 3.0 33.6 124 United States

9.03 Venture capital availability 1-7 (best) 1.8 13.4 136 United States

9.04 Market capitalization % GDP 4.3 4.3 = 105 Multiple (12)

9.05 Insurance premium % GDP 0.7 12.3 = 105 Multiple (16)

9.06 Soundness of banks 1-7 (best) 3.9 48.0 111 Finland

9.07 Non-performing loans % loan portfolio value 20.3 60.0 = 129 Multiple (2)

9.08 Credit gap percentage points -2.1 100.0 = 52 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio n/a 100.0 = n/a Multiple (72)

0-100 (best) - 34.9 125 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 23 n/a 123 China

10.02 Imports % GDP 42.0 n/a 73 Hong Kong SAR

0-100 (best) - 52.7 105 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 3.6 98.2 52 Multiple (2)

11.02 Time to start a business days 8.5 92.0 = 51 New Zealand

11.03 Insolvency recovery rate cents/$ 22.9 24.7 107 Norway

11.04 Insolvency regulatory framework 0-16 (best) 9.0 56.3 = 71 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 3.2 36.5 129 Israel

11.06 Willingness to delegate authority 1-7 (best) 3.5 42.5 124 Denmark

11.07 Growth of innovative companies 1-7 (best) 3.3 38.3 121 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 3.0 33.4 125 United States

0-100 (best) - 26.7 126 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 4.3 54.4 83 Canada

12.02 State of cluster development 1-7 (best) 3.0 33.4 124 United States

12.03 International co-inventions applications/million pop. 0.00 0.0 125 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 3.3 37.8 100 United States

12.05 Scientific publications H Index 76.0 64.3 111 Multiple (7)

12.06 Patent applications applications/million pop. 0.03 0.6 109 Multiple (8)

12.07 R&D expenditures % GDP n/a 4.2 n/a Multiple (7)

12.08 Quality of research institutions index 0.00 0.4 103 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 2.0 16.3 139 United States

12.10 Trademark applications applications/million pop. 173.75 55.5 96 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 101

Economy Profiles

103 | The Global Competitiveness Report 2018

Key Previous edition Lower middle income group average Latin America and the Caribbean averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



105th



129th



102nd



87th



84th



87th



93rd



119th



126th



85th



87th



130th



122nd Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

51

41

56

46

73 75

57 48 48

55 46 45

27

Bolivia 105th / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: n/a

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Inclusive Development Index 1-7 (best)

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -100 (perfect inequality)

11.1

3,353.2

4.8

0.07

3.2

2.7

3.1

3.8

0.8

44.6

Economy Profiles

The Global Competitiveness Report 2018 | 103

Bolivia 105th/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 41.2 129 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 5.0 66.3 62 Finland

1.02 Homicide rate /100,000 pop. 6.3 80.3 98 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 100.0 100.0 1 Multiple (24)

1.04 Reliability of police services 1-7 (best) 2.7 28.1 134 Finland

1.05 Social capital 0-100 (high) 50.0 50.0 72 Australia

1.06 Budget transparency 0-100 (best) 73.1 73.1 = 27 Multiple (2)

1.07 Judicial independence 1-7 (best) 1.1 2.4 140 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 1.5 8.7 139 Finland

1.09 Freedom of the press 0-100 (worst) 32.5 67.6 90 Norway

1.10 Burden of government regulation 1-7 (best) 2.1 18.3 137 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 2.1 17.7 138 Singapore

1.12 E-Participation Index 0-1 (best) 0.58 57.9 93 Multiple (3)

1.13 Future orientation of government 1-7 (best) 2.3 20.9 134 Singapore

1.14 Incidence of corruption 0-100 (best) 33.0 33.0 = 96 New Zealand

1.15 Property rights 1-7 (best) 2.5 25.8 138 Finland

1.16 Intellectual property protection 1-7 (best) 2.3 22.3 138 Finland

1.17 Quality of land administration 0-30 (best) 7.0 23.3 = 122 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 4.5 59.1 76 Finland

1.19 Conflict of interest regulation 0-10 (best) 4.0 40.0 = 121 Multiple (2)

1.20 Shareholder governance 0-10 (best) 4.0 40.0 = 106 Kazakhstan

0-100 (best) - 56.2 102 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 39.8 39.8 = 114 United States

2.02 Quality of roads 1-7 (best) 3.4 39.2 98 Singapore

2.03 Railroad density km of roads/square km 2.6 6.5 = 81 Multiple (20)

2.04 Efficiency of train services 1-7 (best) 2.3 21.9 103 Switzerland

2.05 Airport connectivity score 8,226.7 30.0 105 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 3.3 38.6 118 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) n/a n/a n/a Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 1.9 15.6 135 Singapore

2.09 Electrification rate % pop. 91.5 91.5 96 Multiple (66)

2.10 Electric power transmission and distribution losses % output 9.6 94.2 58 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 8.6 93.3 55 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 4.2 53.4 98 Switzerland

0-100 (best) - 45.7 87 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 99.2 82.7 102 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 76.5 n/a 57 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 3.2 6.5 95 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 0.4 n/a 71 Korea, Rep.

3.05 Internet users % pop. 39.7 39.7 94 Iceland

0-100 (best) - 73.1 84 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change 3.2 100.0 = 1 Multiple (74)

4.02 Debt dynamics 0-100 (best) 46.1 46.1 104 Multiple (36)

0-100 (best) - 75.0 87 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 64.0 75.0 86 Multiple (4)

0-100 (best) - 56.6 93 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 8.6 57.3 = 84 Finland

6.02 Extent of staff training 1-7 (best) 3.1 35.2 130 Switzerland

6.03 Quality of vocational training 1-7 (best) 3.6 43.3 103 Switzerland

6.04 Skillset of graduates 1-7 (best) 3.6 43.3 105 Switzerland

6.05 Digital skills among population 1-7 (best) 3.3 37.9 122 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 3.5 41.8 115 United States

6.07 School life expectancy Years 13.8 76.7 = 72 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 2.5 25.5 126 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 18.4 79.1 68 Multiple (6)

Economy Profiles

105 | The Global Competitiveness Report 2018

Bolivia 105th/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 48.5 119 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 2.0 17.3 139 Singapore

7.02 Extent of market dominance 1-7 (best) 3.5 41.3 92 Switzerland

7.03 Competition in services 1-7 (best) 4.6 60.1 98 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 3.9 47.8 122 Singapore

7.05 Trade tariffs % duty 9.66 35.6 97 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 6.0 84.1 64 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 2.3 33.0 113 Germany

7.08 Services trade openness 0-100 (worst) 13.8 86.2 = 13 Ecuador

0-100 (best) - 47.5 126 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary N/Appl. 0.0 138 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 2.2 20.2 139 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 3.5 42.3 130 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 4.0 50.6 125 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 1.8 13.8 134 Switzerland

8.06 Workers' rights 0-100 (best) 71.1 71.1 60 Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 3.7 44.8 105 Albania

8.08 Internal Labour mobility 1-7 (best) 5.4 73.4 7 Guinea

8.09 Reliance on professional management 1-7 (best) 3.3 37.7 127 Finland

8.10 Pay and productivity 1-7 (best) 2.8 29.7 132 United States

8.11 Female participation in Labour force ratio 0.76 69.7 62 Multiple (4)

8.12 Labour tax rate % 18.8 85.0 = 86 Multiple (26)

0-100 (best) - 54.8 85 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 57.5 60.6 58 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 3.9 47.8 57 United States

9.03 Venture capital availability 1-7 (best) 2.2 19.2 123 United States

9.04 Market capitalization % GDP 20.6 20.6 76 Multiple (12)

9.05 Insurance premium % GDP 1.1 18.6 = 94 Multiple (16)

9.06 Soundness of banks 1-7 (best) 5.2 69.5 60 Finland

9.07 Non-performing loans % loan portfolio value 1.6 97.8 21 Multiple (2)

9.08 Credit gap percentage points 13.7 69.2 136 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio 12.6 90.2 = 114 Multiple (72)

0-100 (best) - 46.2 87 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 76 n/a 85 China

10.02 Imports % GDP 33.0 n/a 95 Hong Kong SAR

0-100 (best) - 45.0 130 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 54.0 73.0 130 Multiple (2)

11.02 Time to start a business days 45.0 55.3 = 128 New Zealand

11.03 Insolvency recovery rate cents/$ 40.9 44.0 55 Norway

11.04 Insolvency regulatory framework 0-16 (best) 6.5 40.6 = 108 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 3.6 43.7 99 Israel

11.06 Willingness to delegate authority 1-7 (best) 3.6 42.6 123 Denmark

11.07 Growth of innovative companies 1-7 (best) 3.0 33.3 133 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 2.6 27.1 139 United States

0-100 (best) - 26.9 122 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 3.9 48.4 114 Canada

12.02 State of cluster development 1-7 (best) 2.9 31.1 128 United States

12.03 International co-inventions applications/million pop. 0.00 0.0 125 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 2.8 30.2 136 United States

12.05 Scientific publications H Index 105.3 69.1 93 Multiple (7)

12.06 Patent applications applications/million pop. 0.06 1.1 102 Multiple (8)

12.07 R&D expenditures % GDP 0.2 5.2 = 95 Multiple (7)

12.08 Quality of research institutions index 0.00 0.0 112 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 2.5 24.2 131 United States

12.10 Trademark applications applications/million pop. 265.62 60.1 87 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 105

Economy Profiles

107 | The Global Competitiveness Report 2018

Key Previous edition Upper middle income group average Europe and North America averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



91st



111th



89th



86th



73rd



52nd



87th



106th



112nd



83rd



99th



106th



114th Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

54 46

61

46

74

85

58 52 51

55

42

53

28

Bosnia and Herzegovina 91st / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 90th / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -100 (perfect inequality)

3.5

5,149.0

1.8

0.04

25.6

2.2

3.3

0.7

32.7

Economy Profiles

The Global Competitiveness Report 2018 | 107

Bosnia and Herzegovina 91st/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 45.6 111 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 4.2 53.1 103 Finland

1.02 Homicide rate /100,000 pop. 1.3 97.4 42 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 99.9 99.9 64 Multiple (24)

1.04 Reliability of police services 1-7 (best) 3.5 41.3 109 Finland

1.05 Social capital 0-100 (high) n/a 53.0 n/a Australia

1.06 Budget transparency 0-100 (best) 50.0 50.0 = 77 Multiple (2)

1.07 Judicial independence 1-7 (best) 2.4 23.5 124 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 1.8 13.8 137 Finland

1.09 Freedom of the press 0-100 (worst) 27.4 72.6 50 Norway

1.10 Burden of government regulation 1-7 (best) 2.2 19.8 135 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 2.2 19.6 134 Singapore

1.12 E-Participation Index 0-1 (best) 0.43 43.3 109 Multiple (3)

1.13 Future orientation of government 1-7 (best) 2.1 18.7 137 Singapore

1.14 Incidence of corruption 0-100 (best) 38.0 38.0 77 New Zealand

1.15 Property rights 1-7 (best) 3.3 37.9 130 Finland

1.16 Intellectual property protection 1-7 (best) 2.9 32.3 135 Finland

1.17 Quality of land administration 0-30 (best) 12.5 41.7 = 89 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 3.4 40.4 129 Finland

1.19 Conflict of interest regulation 0-10 (best) 4.7 47.0 = 106 Multiple (2)

1.20 Shareholder governance 0-10 (best) 7.0 70.0 = 24 Kazakhstan

0-100 (best) - 60.7 89 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 49.2 49.2 = 93 United States

2.02 Quality of roads 1-7 (best) 2.8 30.2 117 Singapore

2.03 Railroad density km of roads/square km 19.9 49.7 = 39 Multiple (20)

2.04 Efficiency of train services 1-7 (best) 2.1 18.6 113 Switzerland

2.05 Airport connectivity score 8,944.1 30.9 98 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 3.3 37.7 122 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) n/a n/a n/a Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 2.0 16.2 134 Singapore

2.09 Electrification rate % pop. 100.0 100.0 = 1 Multiple (66)

2.10 Electric power transmission and distribution losses % output 10.3 93.4 66 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 7.8 94.1 49 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 4.2 54.1 96 Switzerland

0-100 (best) - 45.8 86 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 98.1 81.7 103 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 43.4 n/a 104 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 18.9 37.8 50 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 0.0 n/a 96 Korea, Rep.

3.05 Internet users % pop. 60.3 60.3 66 Iceland

0-100 (best) - 74.4 73 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change 0.1 98.8 80 Multiple (74)

4.02 Debt dynamics 0-100 (best) 50.0 50.0 = 64 Multiple (36)

0-100 (best) - 85.3 52 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 67.3 85.3 51 Multiple (4)

0-100 (best) - 57.5 87 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 9.0 60.0 = 74 Finland

6.02 Extent of staff training 1-7 (best) 3.0 33.8 133 Switzerland

6.03 Quality of vocational training 1-7 (best) 3.1 35.7 129 Switzerland

6.04 Skillset of graduates 1-7 (best) 3.2 36.0 133 Switzerland

6.05 Digital skills among population 1-7 (best) 3.8 47.1 88 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 3.3 38.1 130 United States

6.07 School life expectancy Years 14.2 78.9 = 68 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 2.5 24.5 130 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 17.3 81.8 58 Multiple (6)

Economy Profiles

109 | The Global Competitiveness Report 2018

Bosnia and Herzegovina 91st/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 51.6 106 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 3.0 33.7 122 Singapore

7.02 Extent of market dominance 1-7 (best) 3.2 36.2 113 Switzerland

7.03 Competition in services 1-7 (best) 4.4 56.5 117 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 4.4 56.9 64 Singapore

7.05 Trade tariffs % duty 5.18 65.4 70 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 4.6 60.0 97 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 2.6 40.8 69 Germany

7.08 Services trade openness 0-100 (worst) n/a 81.8 n/a Ecuador

0-100 (best) - 51.2 112 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 9.2 89.1 = 25 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 3.0 34.2 123 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 3.5 42.5 127 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 5.4 72.7 34 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 2.7 28.0 102 Switzerland

8.06 Workers' rights 0-100 (best) 72.2 72.2 58 Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 3.1 35.3 132 Albania

8.08 Internal Labour mobility 1-7 (best) 4.3 55.8 82 Guinea

8.09 Reliance on professional management 1-7 (best) 3.1 35.4 131 Finland

8.10 Pay and productivity 1-7 (best) 3.0 33.7 129 United States

8.11 Female participation in Labour force ratio 0.47 33.1 104 Multiple (4)

8.12 Labour tax rate % 13.5 92.4 = 56 Multiple (26)

0-100 (best) - 55.1 83 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 53.8 56.7 67 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 2.9 32.3 126 United States

9.03 Venture capital availability 1-7 (best) 2.3 21.1 117 United States

9.04 Market capitalization % GDP 23.8 23.8 70 Multiple (12)

9.05 Insurance premium % GDP 1.8 30.8 = 66 Multiple (16)

9.06 Soundness of banks 1-7 (best) 4.3 55.2 97 Finland

9.07 Non-performing loans % loan portfolio value 11.8 77.2 111 Multiple (2)

9.08 Credit gap percentage points -5.4 100.0 = 36 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio 16.3 98.7 = 67 Multiple (72)

0-100 (best) - 41.8 99 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 41 n/a 99 China

10.02 Imports % GDP 60.1 n/a 35 Hong Kong SAR

0-100 (best) - 52.7 106 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 7.7 96.2 74 Multiple (2)

11.02 Time to start a business days 65.0 35.2 = 134 New Zealand

11.03 Insolvency recovery rate cents/$ 37.9 40.8 66 Norway

11.04 Insolvency regulatory framework 0-16 (best) 15.0 93.8 = 1 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 3.6 43.2 103 Israel

11.06 Willingness to delegate authority 1-7 (best) 3.4 39.9 128 Denmark

11.07 Growth of innovative companies 1-7 (best) 3.2 37.1 128 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 3.1 35.6 112 United States

0-100 (best) - 28.2 114 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 3.9 48.0 115 Canada

12.02 State of cluster development 1-7 (best) 3.2 37.4 105 United States

12.03 International co-inventions applications/million pop. 0.22 6.2 71 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 2.9 31.5 131 United States

12.05 Scientific publications H Index 73.7 63.9 112 Multiple (7)

12.06 Patent applications applications/million pop. 0.50 7.5 73 Multiple (8)

12.07 R&D expenditures % GDP 0.2 7.3 91 Multiple (7)

12.08 Quality of research institutions index 0.00 0.8 85 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 2.3 21.7 132 United States

12.10 Trademark applications applications/million pop. 208.12 57.5 91 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 109

Economy Profiles

111 | The Global Competitiveness Report 2018

Key Previous edition Upper middle income group average Sub-Saharan Africa averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



90th



62nd



108th



98th



1st



115th



92nd



95th



57th



69th



111th



103rd



101st Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

55 55 54

42

100

52 57

53 60 59

39

53

31

Botswana 90th / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 85th / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -100 (perfect inequality)

2.2

7,877.0

3.6

0.03

17.4

2.8

2.5

0.7

60.5

Economy Profiles

The Global Competitiveness Report 2018 | 111

Botswana 90th/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 54.7 62 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 5.0 67.3 61 Finland

1.02 Homicide rate /100,000 pop. 15.0 50.7 = 126 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 100.0 100.0 = 1 Multiple (24)

1.04 Reliability of police services 1-7 (best) 4.6 60.7 57 Finland

1.05 Social capital 0-100 (high) 47.8 47.8 94 Australia

1.06 Budget transparency 0-100 (best) 34.6 34.6 = 116 Multiple (2)

1.07 Judicial independence 1-7 (best) 4.3 55.5 52 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 3.8 47.3 43 Finland

1.09 Freedom of the press 0-100 (worst) 25.3 74.7 42 Norway

1.10 Burden of government regulation 1-7 (best) 3.5 41.4 66 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 4.4 56.8 34 Singapore

1.12 E-Participation Index 0-1 (best) 0.20 19.7 130 Multiple (3)

1.13 Future orientation of government 1-7 (best) 4.1 52.2 38 Singapore

1.14 Incidence of corruption 0-100 (best) 61.0 61.0 31 New Zealand

1.15 Property rights 1-7 (best) 5.1 68.0 36 Finland

1.16 Intellectual property protection 1-7 (best) 4.1 52.1 67 Finland

1.17 Quality of land administration 0-30 (best) 10.0 33.3 = 102 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 4.6 60.3 72 Finland

1.19 Conflict of interest regulation 0-10 (best) 6.0 60.0 = 54 Multiple (2)

1.20 Shareholder governance 0-10 (best) 5.3 53.0 = 76 Kazakhstan

0-100 (best) - 53.9 108 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 91.0 91.0 = 13 United States

2.02 Quality of roads 1-7 (best) 3.6 44.0 84 Singapore

2.03 Railroad density km of roads/square km 1.5 3.8 = 91 Multiple (20)

2.04 Efficiency of train services 1-7 (best) 3.5 41.7 59 Switzerland

2.05 Airport connectivity score 1,455.5 15.8 127 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 3.8 46.1 106 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) n/a n/a n/a Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 3.0 34.0 106 Singapore

2.09 Electrification rate % pop. 54.8 54.8 117 Multiple (66)

2.10 Electric power transmission and distribution losses % output 12.1 91.6 80 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 27.3 74.2 102 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 3.9 49.1 104 Switzerland

0-100 (best) - 42.0 98 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 141.4 100.0 = 24 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 66.9 n/a 72 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 2.1 4.3 105 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 0.1 n/a 90 Korea, Rep.

3.05 Internet users % pop. 39.4 39.4 95 Iceland

0-100 (best) - 100.0 = 1 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change 3.1 100.0 = 1 Multiple (74)

4.02 Debt dynamics 0-100 (best) 100.0 100.0 = 1 Multiple (36)

0-100 (best) - 51.9 115 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 56.6 51.9 114 Multiple (4)

0-100 (best) - 56.7 92 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 8.9 59.1 = 76 Finland

6.02 Extent of staff training 1-7 (best) 3.9 48.5 67 Switzerland

6.03 Quality of vocational training 1-7 (best) 3.8 47.2 84 Switzerland

6.04 Skillset of graduates 1-7 (best) 3.4 40.4 119 Switzerland

6.05 Digital skills among population 1-7 (best) 3.7 44.5 100 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 3.9 47.5 92 United States

6.07 School life expectancy Years 12.6 70.0 = 91 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 3.2 35.9 88 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 22.6 68.5 = 84 Multiple (6)

Economy Profiles

113 | The Global Competitiveness Report 2018

Botswana 90th/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 53.1 95 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 4.2 52.9 40 Singapore

7.02 Extent of market dominance 1-7 (best) 3.0 33.2 122 Switzerland

7.03 Competition in services 1-7 (best) 4.6 59.4 105 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 4.3 54.4 79 Singapore

7.05 Trade tariffs % duty 6.44 57.1 80 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 4.9 64.3 90 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 3.0 51.2 = 38 Germany

7.08 Services trade openness 0-100 (worst) 38.3 61.7 = 77 Ecuador

0-100 (best) - 60.5 57 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 20.6 65.5 = 90 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 3.9 47.9 67 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 4.3 54.4 80 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 4.7 62.1 86 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 2.9 31.3 89 Switzerland

8.06 Workers' rights 0-100 (best) 70.1 70.1 71 Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 3.0 33.6 134 Albania

8.08 Internal Labour mobility 1-7 (best) 4.2 52.9 97 Guinea

8.09 Reliance on professional management 1-7 (best) 4.5 59.0 47 Finland

8.10 Pay and productivity 1-7 (best) 3.5 41.8 100 United States

8.11 Female participation in Labour force ratio 0.79 73.8 55 Multiple (4)

8.12 Labour tax rate % 0.0 100.0 = 1 Multiple (26)

0-100 (best) - 59.5 69 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 32.2 33.9 98 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 3.7 44.2 88 United States

9.03 Venture capital availability 1-7 (best) 2.5 25.5 101 United States

9.04 Market capitalization % GDP 25.0 25.0 68 Multiple (12)

9.05 Insurance premium % GDP 3.0 50.1 = 40 Multiple (16)

9.06 Soundness of banks 1-7 (best) 4.9 65.3 70 Finland

9.07 Non-performing loans % loan portfolio value 4.9 91.2 70 Multiple (2)

9.08 Credit gap percentage points -2.2 100.0 = 51 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio 19.4 100.0 = 26 Multiple (72)

0-100 (best) - 38.6 111 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 35 n/a 106 China

10.02 Imports % GDP 33.8 n/a 90 Hong Kong SAR

0-100 (best) - 53.0 103 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 0.7 99.7 15 Multiple (2)

11.02 Time to start a business days 48.0 52.3 = 130 New Zealand

11.03 Insolvency recovery rate cents/$ 65.5 70.5 31 Norway

11.04 Insolvency regulatory framework 0-16 (best) 4.0 25.0 = 128 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 3.6 43.3 102 Israel

11.06 Willingness to delegate authority 1-7 (best) 4.4 56.5 62 Denmark

11.07 Growth of innovative companies 1-7 (best) 3.4 40.8 115 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 3.1 35.8 109 United States

0-100 (best) - 30.6 101 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 4.5 58.4 63 Canada

12.02 State of cluster development 1-7 (best) 3.1 34.5 118 United States

12.03 International co-inventions applications/million pop. 0.02 0.6 109 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 3.2 36.4 107 United States

12.05 Scientific publications H Index 90.7 66.9 100 Multiple (7)

12.06 Patent applications applications/million pop. 0.02 0.4 115 Multiple (8)

12.07 R&D expenditures % GDP 0.5 18.1 = 62 Multiple (7)

12.08 Quality of research institutions index 0.00 0.4 107 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 2.9 32.4 104 United States

12.10 Trademark applications applications/million pop. 224.99 58.3 88 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 113

Economy Profiles

115 | The Global Competitiveness Report 2018

Key Previous edition Upper middle income group average Latin America and the Caribbean averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



72nd



93rd



81st



66th



122nd



73rd



94th



117th



114th



57th



10th



108th



40th Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

60

50

64 56

65

80

56 49 51

63

81

52 48

Brazil 72nd / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 69th / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Inclusive Development Index 1-7 (best)

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -100 (perfect inequality)

207.7

9,894.9

1.5

2.55

13.3

3.0

3.1

3.9

0.7

51.3

Economy Profiles

The Global Competitiveness Report 2018 | 115

Brazil 72nd/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 49.7 93 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 3.5 41.0 124 Finland

1.02 Homicide rate /100,000 pop. 29.5 1.6 133 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 99.8 99.8 74 Multiple (24)

1.04 Reliability of police services 1-7 (best) 3.4 40.8 111 Finland

1.05 Social capital 0-100 (high) 53.6 53.6 51 Australia

1.06 Budget transparency 0-100 (best) 100.0 100.0 = 1 Multiple (2)

1.07 Judicial independence 1-7 (best) 3.6 43.6 79 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 2.6 27.5 113 Finland

1.09 Freedom of the press 0-100 (worst) 31.2 68.8 83 Norway

1.10 Burden of government regulation 1-7 (best) 1.6 9.9 140 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 2.7 27.5 124 Singapore

1.12 E-Participation Index 0-1 (best) 0.97 97.2 12 Multiple (3)

1.13 Future orientation of government 1-7 (best) 2.5 24.9 129 Singapore

1.14 Incidence of corruption 0-100 (best) 37.0 37.0 80 New Zealand

1.15 Property rights 1-7 (best) 4.0 50.7 92 Finland

1.16 Intellectual property protection 1-7 (best) 4.0 49.4 77 Finland

1.17 Quality of land administration 0-30 (best) 13.8 46.0 = 82 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 4.7 61.5 65 Finland

1.19 Conflict of interest regulation 0-10 (best) 5.7 57.0 = 65 Multiple (2)

1.20 Shareholder governance 0-10 (best) 7.0 70.0 = 24 Kazakhstan

0-100 (best) - 64.3 81 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 63.7 63.7 = 74 United States

2.02 Quality of roads 1-7 (best) 3.0 33.8 112 Singapore

2.03 Railroad density km of roads/square km 3.5 8.8 = 79 Multiple (20)

2.04 Efficiency of train services 1-7 (best) 2.5 24.7 97 Switzerland

2.05 Airport connectivity score 437,475.0 89.7 17 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 4.4 57.3 73 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) 35.6 35.6 47 Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 3.1 34.3 105 Singapore

2.09 Electrification rate % pop. 99.6 99.6 73 Multiple (66)

2.10 Electric power transmission and distribution losses % output 15.1 88.4 96 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 9.0 92.9 57 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 4.6 59.8 78 Switzerland

0-100 (best) - 55.6 66 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 113.0 94.2 80 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 90.2 n/a 36 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 13.7 27.4 63 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 0.8 n/a 63 Korea, Rep.

3.05 Internet users % pop. 60.9 60.9 65 Iceland

0-100 (best) - 64.6 122 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change 6.1 94.2 110 Multiple (74)

4.02 Debt dynamics 0-100 (best) 34.9 34.9 131 Multiple (36)

0-100 (best) - 79.6 73 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 65.5 79.6 72 Multiple (4)

0-100 (best) - 56.0 94 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 7.4 49.6 = 100 Finland

6.02 Extent of staff training 1-7 (best) 3.8 46.5 75 Switzerland

6.03 Quality of vocational training 1-7 (best) 3.4 39.7 121 Switzerland

6.04 Skillset of graduates 1-7 (best) 3.4 39.7 124 Switzerland

6.05 Digital skills among population 1-7 (best) 3.2 37.1 125 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 3.3 38.6 127 United States

6.07 School life expectancy Years 15.4 85.5 = 45 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 2.5 25.7 125 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 21.5 71.2 = 79 Multiple (6)

Economy Profiles

117 | The Global Competitiveness Report 2018

Brazil 72nd/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 48.9 117 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 2.7 27.9 132 Singapore

7.02 Extent of market dominance 1-7 (best) 3.8 46.4 56 Switzerland

7.03 Competition in services 1-7 (best) 4.7 61.1 95 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 3.4 40.5 136 Singapore

7.05 Trade tariffs % duty 12.45 17.0 125 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 6.6 93.7 21 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 2.4 35.2 103 Germany

7.08 Services trade openness 0-100 (worst) 22.5 77.5 = 45 Ecuador

0-100 (best) - 51.0 114 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 15.4 76.2 = 66 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 2.2 20.8 138 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 3.8 46.6 117 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 4.1 51.9 124 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 2.7 27.6 105 Switzerland

8.06 Workers' rights 0-100 (best) 66.0 66.0 88 Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 3.4 40.6 122 Albania

8.08 Internal Labour mobility 1-7 (best) 2.8 29.2 138 Guinea

8.09 Reliance on professional management 1-7 (best) 4.4 56.7 58 Finland

8.10 Pay and productivity 1-7 (best) 3.4 39.5 113 United States

8.11 Female participation in Labour force ratio 0.82 77.3 49 Multiple (4)

8.12 Labour tax rate % 40.2 55.3 = 137 Multiple (26)

0-100 (best) - 63.2 57 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 65.0 68.4 49 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 3.3 38.4 110 United States

9.03 Venture capital availability 1-7 (best) 2.5 24.3 103 United States

9.04 Market capitalization % GDP 34.6 34.6 54 Multiple (12)

9.05 Insurance premium % GDP 1.9 31.9 = 60 Multiple (16)

9.06 Soundness of banks 1-7 (best) 5.7 78.8 22 Finland

9.07 Non-performing loans % loan portfolio value 3.9 93.1 61 Multiple (2)

9.08 Credit gap percentage points -6.8 100.0 = 28 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio 16.4 98.8 = 64 Multiple (72)

0-100 (best) - 80.9 10 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 2,951 n/a 8 China

10.02 Imports % GDP 10.9 n/a 139 Hong Kong SAR

0-100 (best) - 52.4 108 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 5.0 97.5 58 Multiple (2)

11.02 Time to start a business days 79.5 20.6 = 137 New Zealand

11.03 Insolvency recovery rate cents/$ 12.7 13.7 126 Norway

11.04 Insolvency regulatory framework 0-16 (best) 13.0 81.3 = 17 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 4.1 51.6 56 Israel

11.06 Willingness to delegate authority 1-7 (best) 4.4 56.6 61 Denmark

11.07 Growth of innovative companies 1-7 (best) 4.1 51.5 60 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 3.8 46.8 44 United States

0-100 (best) - 47.8 40 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 4.5 58.7 60 Canada

12.02 State of cluster development 1-7 (best) 4.0 49.7 52 United States

12.03 International co-inventions applications/million pop. 0.30 8.2 61 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 3.7 44.2 62 United States

12.05 Scientific publications H Index 470.3 91.2 23 Multiple (7)

12.06 Patent applications applications/million pop. 1.94 19.8 54 Multiple (8)

12.07 R&D expenditures % GDP 1.2 38.9 = 33 Multiple (7)

12.08 Quality of research institutions index 0.23 57.3 14 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 3.4 39.9 68 United States

12.10 Trademark applications applications/million pop. 699.00 70.5 56 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 117

Economy Profiles

119 | The Global Competitiveness Report 2018

Key Previous edition High income group average East Asia and Pacific averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



62nd



45th



54th



17th



81st



50th



58th



44th



38th



107th



115th



68th



79th Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

61 58

71 76 74

86

66 61 64

51

37

59

34

Brunei Darussalam 62nd / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 64th / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita Global Gender Gap Index 0-1 (gender parity)

0.4

29,711.9

-0.4

0.03

7.1

2.0

5.6 0.7

Economy Profiles

The Global Competitiveness Report 2018 | 119

Brunei Darussalam 62nd/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 58.3 45 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 6.1 84.4 6 Finland

1.02 Homicide rate /100,000 pop. 0.5 100.0 = 8 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 100.0 100.0 = 1 Multiple (24)

1.04 Reliability of police services 1-7 (best) 5.1 68.5 43 Finland

1.05 Social capital 0-100 (high) n/a n/a n/a Australia

1.06 Budget transparency 0-100 (best) 7.7 7.7 = 135 Multiple (2)

1.07 Judicial independence 1-7 (best) 3.9 48.7 64 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 2.2 19.4 131 Finland

1.09 Freedom of the press 0-100 (worst) 51.5 48.5 126 Norway

1.10 Burden of government regulation 1-7 (best) 3.2 37.1 85 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 3.9 47.8 58 Singapore

1.12 E-Participation Index 0-1 (best) 0.61 60.7 92 Multiple (3)

1.13 Future orientation of government 1-7 (best) 4.1 51.6 42 Singapore

1.14 Incidence of corruption 0-100 (best) 62.0 62.0 29 New Zealand

1.15 Property rights 1-7 (best) 4.3 54.3 73 Finland

1.16 Intellectual property protection 1-7 (best) 4.4 56.4 57 Finland

1.17 Quality of land administration 0-30 (best) 18.0 60.0 52 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 4.4 56.7 82 Finland

1.19 Conflict of interest regulation 0-10 (best) 6.7 67.0 = 32 Multiple (2)

1.20 Shareholder governance 0-10 (best) 6.3 63.0 45 Kazakhstan

0-100 (best) - 71.3 54 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 78.1 78.1 = 36 United States

2.02 Quality of roads 1-7 (best) 4.9 65.5 32 Singapore

2.03 Railroad density km of roads/square km n/a n/a n/a Multiple (20)

2.04 Efficiency of train services 1-7 (best) 3.6 43.0 56 Switzerland

2.05 Airport connectivity score 11,871.6 33.8 91 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 4.6 60.0 66 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) 6.6 6.6 102 Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 4.1 51.7 67 Singapore

2.09 Electrification rate % pop. 100.0 100.0 1 Multiple (66)

2.10 Electric power transmission and distribution losses % output 6.4 97.5 34 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 2.4 99.6 28 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 5.6 76.2 48 Switzerland

0-100 (best) - 76.2 17 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 127.1 100.0 = 45 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 126.6 n/a 11 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 9.6 19.2 75 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 6.2 n/a 30 Korea, Rep.

3.05 Internet users % pop. 90.0 90.0 13 Iceland

0-100 (best) - 73.7 81 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change -0.4 97.4 98 Multiple (74)

4.02 Debt dynamics 0-100 (best) 50.0 50.0 = 64 Multiple (36)

0-100 (best) - 85.9 50 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 67.5 85.9 49 Multiple (4)

0-100 (best) - 66.0 58 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 8.8 58.5 = 78 Finland

6.02 Extent of staff training 1-7 (best) 4.0 50.0 61 Switzerland

6.03 Quality of vocational training 1-7 (best) 4.3 55.0 54 Switzerland

6.04 Skillset of graduates 1-7 (best) 4.3 55.6 49 Switzerland

6.05 Digital skills among population 1-7 (best) 4.7 61.0 46 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 3.6 43.7 108 United States

6.07 School life expectancy Years 14.5 80.4 64 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 3.7 44.4 52 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 10.2 99.5 9 Multiple (6)

Economy Profiles

121 | The Global Competitiveness Report 2018

Brunei Darussalam 62nd/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 60.9 44 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 4.4 56.5 28 Singapore

7.02 Extent of market dominance 1-7 (best) 3.3 38.3 107 Switzerland

7.03 Competition in services 1-7 (best) 4.4 56.7 115 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 4.3 54.2 82 Singapore

7.05 Trade tariffs % duty 0.37 97.6 3 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 6.4 90.0 40 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 2.6 40.6 72 Germany

7.08 Services trade openness 0-100 (worst) n/a 74.5 n/a Ecuador

0-100 (best) - 64.2 38 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 3.0 100.0 = 5 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 3.8 46.8 71 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 4.9 64.8 33 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 5.5 75.3 20 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 3.8 47.2 50 Switzerland

8.06 Workers' rights 0-100 (best) n/a 62.0 n/a Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 3.0 33.4 135 Albania

8.08 Internal Labour mobility 1-7 (best) 4.3 54.3 90 Guinea

8.09 Reliance on professional management 1-7 (best) 4.1 51.4 79 Finland

8.10 Pay and productivity 1-7 (best) 3.8 46.8 77 United States

8.11 Female participation in Labour force ratio 0.79 73.4 56 Multiple (4)

8.12 Labour tax rate % 7.9 100.0 = 25 Multiple (26)

0-100 (best) - 51.2 107 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 39.6 41.7 85 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 3.7 45.8 71 United States

9.03 Venture capital availability 1-7 (best) 2.7 29.1 82 United States

9.04 Market capitalization % GDP 0.0 0.0 121 Multiple (12)

9.05 Insurance premium % GDP 0.7 10.9 = 112 Multiple (16)

9.06 Soundness of banks 1-7 (best) 5.0 65.9 69 Finland

9.07 Non-performing loans % loan portfolio value 4.6 91.7 69 Multiple (2)

9.08 Credit gap percentage points 11.1 76.1 134 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio 21.2 100.0 = 18 Multiple (72)

0-100 (best) - 37.0 115 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 31 n/a 113 China

10.02 Imports % GDP 32.1 n/a 101 Hong Kong SAR

0-100 (best) - 58.5 68 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 1.1 99.5 26 Multiple (2)

11.02 Time to start a business days 12.5 87.9 77 New Zealand

11.03 Insolvency recovery rate cents/$ 47.2 50.8 44 Norway

11.04 Insolvency regulatory framework 0-16 (best) 9.5 59.4 = 66 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 3.6 42.9 105 Israel

11.06 Willingness to delegate authority 1-7 (best) 4.5 58.1 54 Denmark

11.07 Growth of innovative companies 1-7 (best) 3.1 34.9 132 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 3.1 34.8 115 United States

0-100 (best) - 33.9 79 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 4.7 60.9 51 Canada

12.02 State of cluster development 1-7 (best) 3.5 41.5 93 United States

12.03 International co-inventions applications/million pop. 0.70 16.3 52 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 3.3 37.9 98 United States

12.05 Scientific publications H Index 58.7 60.6 121 Multiple (7)

12.06 Patent applications applications/million pop. 0.70 9.8 71 Multiple (8)

12.07 R&D expenditures % GDP n/a 13.5 n/a Multiple (7)

12.08 Quality of research institutions index 0.00 0.4 99 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 2.9 31.9 108 United States

12.10 Trademark applications applications/million pop. 482.01 66.5 70 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 121

Economy Profiles

123 | The Global Competitiveness Report 2018

Key Previous edition Upper middle income group average Europe and North America averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



51st



70th



58th



30th



52nd



70th



60th



62nd



50th



71st



64th



61st



48th Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

64

54

70 70

89 80

65 57

62 58 55

60

44

Bulgaria 51st / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 51st / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Inclusive Development Index 1-7 (best)

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -100 (perfect inequality)

7.1

8,064.0

1.9

0.12

6.2

3.1

3.2

4.4

0.8

37.4

Economy Profiles

The Global Competitiveness Report 2018 | 123

Bulgaria 51st/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 53.6 70 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 3.8 47.1 116 Finland

1.02 Homicide rate /100,000 pop. 1.1 97.8 37 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 99.9 99.9 50 Multiple (24)

1.04 Reliability of police services 1-7 (best) 3.7 45.2 99 Finland

1.05 Social capital 0-100 (high) 46.1 46.1 102 Australia

1.06 Budget transparency 0-100 (best) 53.8 53.8 = 67 Multiple (2)

1.07 Judicial independence 1-7 (best) 3.2 36.5 95 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 3.0 33.9 83 Finland

1.09 Freedom of the press 0-100 (worst) 35.2 64.8 91 Norway

1.10 Burden of government regulation 1-7 (best) 3.4 40.1 72 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 3.0 34.1 99 Singapore

1.12 E-Participation Index 0-1 (best) 0.87 87.1 34 Multiple (3)

1.13 Future orientation of government 1-7 (best) 3.4 40.3 88 Singapore

1.14 Incidence of corruption 0-100 (best) 43.0 43.0 61 New Zealand

1.15 Property rights 1-7 (best) 3.6 43.2 118 Finland

1.16 Intellectual property protection 1-7 (best) 3.4 39.3 118 Finland

1.17 Quality of land administration 0-30 (best) 19.0 63.3 = 50 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 4.7 61.2 66 Finland

1.19 Conflict of interest regulation 0-10 (best) 6.7 67.0 = 32 Multiple (2)

1.20 Shareholder governance 0-10 (best) 7.3 73.0 = 15 Kazakhstan

0-100 (best) - 69.9 58 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 65.5 65.5 = 69 United States

2.02 Quality of roads 1-7 (best) 3.5 42.0 90 Singapore

2.03 Railroad density km of roads/square km 36.3 90.7 = 22 Multiple (20)

2.04 Efficiency of train services 1-7 (best) 3.3 38.6 64 Switzerland

2.05 Airport connectivity score 40,732.7 49.0 70 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 4.4 57.1 75 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) 9.1 9.1 88 Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 4.2 53.9 63 Singapore

2.09 Electrification rate % pop. 100.0 100.0 = 1 Multiple (66)

2.10 Electric power transmission and distribution losses % output 9.8 94.0 61 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 7.0 94.9 46 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 5.1 67.7 58 Switzerland

0-100 (best) - 69.6 30 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 120.4 100.0 = 68 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 91.6 n/a 34 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 24.9 49.8 40 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 12.0 n/a 15 Korea, Rep.

3.05 Internet users % pop. 59.8 59.8 68 Iceland

0-100 (best) - 89.2 52 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change -0.1 98.4 90 Multiple (74)

4.02 Debt dynamics 0-100 (best) 80.0 80.0 = 43 Multiple (36)

0-100 (best) - 80.0 70 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 65.6 80.0 69 Multiple (4)

0-100 (best) - 64.7 60 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 11.0 73.3 = 40 Finland

6.02 Extent of staff training 1-7 (best) 3.4 40.1 118 Switzerland

6.03 Quality of vocational training 1-7 (best) 3.6 44.1 99 Switzerland

6.04 Skillset of graduates 1-7 (best) 3.6 43.8 101 Switzerland

6.05 Digital skills among population 1-7 (best) 4.2 54.0 66 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 3.3 39.1 122 United States

6.07 School life expectancy Years 14.8 82.3 58 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 3.2 37.0 80 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 17.6 81.0 63 Multiple (6)

Economy Profiles

125 | The Global Competitiveness Report 2018

Bulgaria 51st/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 56.7 62 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 3.3 38.1 107 Singapore

7.02 Extent of market dominance 1-7 (best) 3.7 45.0 71 Switzerland

7.03 Competition in services 1-7 (best) 5.2 69.5 50 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 4.2 53.6 89 Singapore

7.05 Trade tariffs % duty 1.13 92.4 24 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 3.0 33.7 112 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 2.9 48.4 43 Germany

7.08 Services trade openness 0-100 (worst) 15.5 84.5 = 17 Ecuador

0-100 (best) - 62.0 50 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 8.6 90.4 = 18 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 3.8 46.9 69 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 3.8 46.3 118 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 5.2 70.2 44 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 3.4 40.6 65 Switzerland

8.06 Workers' rights 0-100 (best) 79.4 79.4 39 Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 3.8 46.4 100 Albania

8.08 Internal Labour mobility 1-7 (best) 4.7 61.3 50 Guinea

8.09 Reliance on professional management 1-7 (best) 3.5 42.1 112 Finland

8.10 Pay and productivity 1-7 (best) 3.7 45.6 81 United States

8.11 Female participation in Labour force ratio 0.88 84.5 36 Multiple (4)

8.12 Labour tax rate % 20.2 83.1 = 93 Multiple (26)

0-100 (best) - 58.2 71 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 55.9 58.9 62 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 3.7 45.3 77 United States

9.03 Venture capital availability 1-7 (best) 3.2 37.1 50 United States

9.04 Market capitalization % GDP 14.4 14.4 = 86 Multiple (12)

9.05 Insurance premium % GDP 2.1 34.4 = 57 Multiple (16)

9.06 Soundness of banks 1-7 (best) 4.5 59.1 88 Finland

9.07 Non-performing loans % loan portfolio value 13.2 74.4 114 Multiple (2)

9.08 Credit gap percentage points -17.0 100.0 = 9 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio 20.4 100.0 = 22 Multiple (72)

0-100 (best) - 54.6 64 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 139 n/a 71 China

10.02 Imports % GDP 69.0 n/a 24 Hong Kong SAR

0-100 (best) - 60.3 61 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 1.2 99.4 31 Multiple (2)

11.02 Time to start a business days 23.0 77.4 = 107 New Zealand

11.03 Insolvency recovery rate cents/$ 36.0 38.8 72 Norway

11.04 Insolvency regulatory framework 0-16 (best) 13.0 81.3 = 17 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 3.7 45.4 92 Israel

11.06 Willingness to delegate authority 1-7 (best) 3.9 48.8 99 Denmark

11.07 Growth of innovative companies 1-7 (best) 3.9 48.5 71 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 3.6 43.2 61 United States

0-100 (best) - 43.9 48 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 4.2 53.4 87 Canada

12.02 State of cluster development 1-7 (best) 3.8 46.8 64 United States

12.03 International co-inventions applications/million pop. 1.11 22.9 43 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 3.6 43.3 68 United States

12.05 Scientific publications H Index 209.0 79.2 51 Multiple (7)

12.06 Patent applications applications/million pop. 4.54 31.4 45 Multiple (8)

12.07 R&D expenditures % GDP 1.0 31.9 41 Multiple (7)

12.08 Quality of research institutions index 0.01 2.6 62 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 3.3 39.1 76 United States

12.10 Trademark applications applications/million pop. 3,786.14 88.6 26 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 125

Economy Profiles

127 | The Global Competitiveness Report 2018

Key Previous edition Low income group average Sub-Saharan Africa averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



124th



86th



128th



124th



80th



129th



137th



101st



109th



124th



112nd



112nd



130th Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

44 51

38

26

74

40 32

52 52 48

38

52

25

Burkina Faso 124th / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: n/a

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -100 (perfect inequality)

18.9

663.8

5.5

0.03

6.3

3.2

1.3

0.7

35.3

Economy Profiles

The Global Competitiveness Report 2018 | 127

Burkina Faso 124th/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 50.6 86 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 3.5 41.3 123 Finland

1.02 Homicide rate /100,000 pop. 0.4 100.0 = 4 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 96.2 96.2 113 Multiple (24)

1.04 Reliability of police services 1-7 (best) 4.6 59.8 62 Finland

1.05 Social capital 0-100 (high) 48.8 48.8 83 Australia

1.06 Budget transparency 0-100 (best) 42.3 42.3 = 103 Multiple (2)

1.07 Judicial independence 1-7 (best) 3.6 43.3 81 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 3.2 37.1 73 Finland

1.09 Freedom of the press 0-100 (worst) 23.3 76.7 36 Norway

1.10 Burden of government regulation 1-7 (best) 3.2 36.8 88 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 4.3 55.2 38 Singapore

1.12 E-Participation Index 0-1 (best) 0.62 62.4 84 Multiple (3)

1.13 Future orientation of government 1-7 (best) 3.7 45.4 69 Singapore

1.14 Incidence of corruption 0-100 (best) 42.0 42.0 = 63 New Zealand

1.15 Property rights 1-7 (best) 4.0 50.8 90 Finland

1.16 Intellectual property protection 1-7 (best) 4.1 51.6 70 Finland

1.17 Quality of land administration 0-30 (best) 11.5 38.3 = 93 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 3.8 47.2 115 Finland

1.19 Conflict of interest regulation 0-10 (best) 4.3 43.0 = 112 Multiple (2)

1.20 Shareholder governance 0-10 (best) 3.7 37.0 = 112 Kazakhstan

0-100 (best) - 37.9 128 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 65.8 65.8 = 67 United States

2.02 Quality of roads 1-7 (best) 2.7 27.8 125 Singapore

2.03 Railroad density km of roads/square km 2.3 5.7 = 83 Multiple (20)

2.04 Efficiency of train services 1-7 (best) 2.7 29.1 86 Switzerland

2.05 Airport connectivity score 1,251.7 14.9 128 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 3.2 37.0 126 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) n/a n/a n/a Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 2.8 29.6 113 Singapore

2.09 Electrification rate % pop. 20.3 20.3 132 Multiple (66)

2.10 Electric power transmission and distribution losses % output n/a 80.2 n/a Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 43.5 57.7 132 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 2.5 24.8 131 Switzerland

0-100 (best) - 26.2 124 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 93.5 77.9 105 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 28.8 n/a 113 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 0.1 0.1 132 Switzerland

3.04 Fibre Internet subscriptions /100 pop. n/a n/a n/a Korea, Rep.

3.05 Internet users % pop. 14.0 14.0 128 Iceland

0-100 (best) - 73.8 80 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change 0.1 98.8 81 Multiple (74)

4.02 Debt dynamics 0-100 (best) 48.7 48.7 91 Multiple (36)

0-100 (best) - 40.4 129 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 52.9 40.4 128 Multiple (4)

0-100 (best) - 31.7 137 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 1.4 9.2 = 140 Finland

6.02 Extent of staff training 1-7 (best) 3.1 35.7 129 Switzerland

6.03 Quality of vocational training 1-7 (best) 4.0 50.5 71 Switzerland

6.04 Skillset of graduates 1-7 (best) 3.8 47.1 87 Switzerland

6.05 Digital skills among population 1-7 (best) 3.2 36.8 126 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 4.1 52.3 68 United States

6.07 School life expectancy Years 8.5 47.4 135 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 2.8 30.3 115 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 41.5 21.1 122 Multiple (6)

Economy Profiles

129 | The Global Competitiveness Report 2018

Burkina Faso 124th/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 52.3 101 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 3.4 40.7 90 Singapore

7.02 Extent of market dominance 1-7 (best) 3.7 44.6 74 Switzerland

7.03 Competition in services 1-7 (best) 4.5 57.6 111 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 4.2 52.7 97 Singapore

7.05 Trade tariffs % duty 10.14 32.4 107 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 6.7 94.7 10 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 2.4 35.3 102 Germany

7.08 Services trade openness 0-100 (worst) n/a 69.4 n/a Ecuador

0-100 (best) - 51.6 109 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 10.5 86.5 = 36 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 3.7 44.6 84 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 4.0 50.2 103 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 4.8 64.1 75 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 1.9 14.7 131 Switzerland

8.06 Workers' rights 0-100 (best) 76.3 76.3 47 Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 4.6 60.2 27 Albania

8.08 Internal Labour mobility 1-7 (best) 5.2 69.4 14 Guinea

8.09 Reliance on professional management 1-7 (best) 3.0 32.6 133 Finland

8.10 Pay and productivity 1-7 (best) 2.8 29.6 133 United States

8.11 Female participation in Labour force ratio 0.49 36.6 98 Multiple (4)

8.12 Labour tax rate % 21.4 81.4 = 97 Multiple (26)

0-100 (best) - 47.6 124 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 27.0 28.4 107 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 3.2 36.5 117 United States

9.03 Venture capital availability 1-7 (best) 1.7 11.5 137 United States

9.04 Market capitalization % GDP 3.0 3.0 = 109 Multiple (12)

9.05 Insurance premium % GDP 0.6 10.8 = 113 Multiple (16)

9.06 Soundness of banks 1-7 (best) 4.2 54.0 101 Finland

9.07 Non-performing loans % loan portfolio value 8.4 84.0 = 93 Multiple (2)

9.08 Credit gap percentage points 1.8 100.0 96 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio n/a 100.0 = n/a Multiple (72)

0-100 (best) - 38.3 112 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 33 n/a 111 China

10.02 Imports % GDP 41.1 n/a 75 Hong Kong SAR

0-100 (best) - 51.6 112 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 42.6 78.7 125 Multiple (2)

11.02 Time to start a business days 13.0 87.4 = 81 New Zealand

11.03 Insolvency recovery rate cents/$ 23.3 25.1 106 Norway

11.04 Insolvency regulatory framework 0-16 (best) 9.0 56.3 = 71 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 3.6 42.6 106 Israel

11.06 Willingness to delegate authority 1-7 (best) 3.3 38.0 133 Denmark

11.07 Growth of innovative companies 1-7 (best) 3.9 47.5 86 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 3.2 37.0 99 United States

0-100 (best) - 24.9 130 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 3.7 44.6 124 Canada

12.02 State of cluster development 1-7 (best) 3.0 33.3 125 United States

12.03 International co-inventions applications/million pop. 0.00 0.0 125 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 3.2 36.9 103 United States

12.05 Scientific publications H Index 93.3 67.3 97 Multiple (7)

12.06 Patent applications applications/million pop. 0.00 0.0 129 Multiple (8)

12.07 R&D expenditures % GDP 0.2 6.7 = 92 Multiple (7)

12.08 Quality of research institutions index 0.00 0.4 107 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 2.0 15.9 140 United States

12.10 Trademark applications applications/million pop. 58.78 44.0 110 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 129

Economy Profiles

131 | The Global Competitiveness Report 2018

Key Previous edition Low income group average Sub-Saharan Africa averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



136th



135th



132nd



134th



129th



127th



134th



127th



133rd



135th



136th



123rd



131st Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

38 36 37

18

56

42 33

46 44 42

23

49

24

Burundi 136th / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 132nd / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Inclusive Development Index 1-7 (best)

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -100 (perfect inequality)

10.9

312.5

2.7

0.01

1.6

0.4

0.6

3.3

0.8

38.6

Economy Profiles

The Global Competitiveness Report 2018 | 131

Burundi 136th/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 36.3 135 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 3.8 46.3 = 119 Finland

1.02 Homicide rate /100,000 pop. 6.0 81.3 96 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 91.3 91.3 121 Multiple (24)

1.04 Reliability of police services 1-7 (best) 3.0 33.6 = 125 Finland

1.05 Social capital 0-100 (high) 35.2 35.2 132 Australia

1.06 Budget transparency 0-100 (best) 19.2 19.2 = 132 Multiple (2)

1.07 Judicial independence 1-7 (best) 2.3 20.9 = 131 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 2.6 27.0 = 116 Finland

1.09 Freedom of the press 0-100 (worst) 55.3 44.7 131 Norway

1.10 Burden of government regulation 1-7 (best) 3.1 34.3 = 98 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 3.0 32.8 = 107 Singapore

1.12 E-Participation Index 0-1 (best) 0.31 30.9 124 Multiple (3)

1.13 Future orientation of government 1-7 (best) 3.2 36.1 = 104 Singapore

1.14 Incidence of corruption 0-100 (best) 22.0 22.0 131 New Zealand

1.15 Property rights 1-7 (best) 3.0 33.8 = 133 Finland

1.16 Intellectual property protection 1-7 (best) 3.2 36.0 = 128 Finland

1.17 Quality of land administration 0-30 (best) 4.5 15.0 = 135 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 3.7 45.4 = 121 Finland

1.19 Conflict of interest regulation 0-10 (best) 5.7 57.0 = 65 Multiple (2)

1.20 Shareholder governance 0-10 (best) 3.0 30.0 = 131 Kazakhstan

0-100 (best) - 36.6 132 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 40.2 40.2 = 113 United States

2.02 Quality of roads 1-7 (best) 3.0 32.7 = 114 Singapore

2.03 Railroad density km of roads/square km n/a n/a n/a Multiple (20)

2.04 Efficiency of train services 1-7 (best) 2.1 18.6 = 114 Switzerland

2.05 Airport connectivity score 205.6 6.2 136 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 2.9 31.3 = 132 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) n/a n/a n/a Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 2.6 27.2 = 118 Singapore

2.09 Electrification rate % pop. 10.0 10.0 138 Multiple (66)

2.10 Electric power transmission and distribution losses % output n/a 77.0 n/a Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 45.1 56.1 136 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 3.3 38.9 = 118 Switzerland

0-100 (best) - 18.4 134 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 54.5 45.4 134 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 17.2 n/a 128 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 0.0 0.1 137 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 0.0 n/a 109 Korea, Rep.

3.05 Internet users % pop. 5.2 5.2 139 Iceland

0-100 (best) - 56.5 129 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change 11.1 80.3 125 Multiple (74)

4.02 Debt dynamics 0-100 (best) 32.7 32.7 134 Multiple (36)

0-100 (best) - 42.2 127 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 53.5 42.2 126 Multiple (4)

0-100 (best) - 32.9 134 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 1.9 12.9 = 137 Finland

6.02 Extent of staff training 1-7 (best) 3.3 38.2 = 125 Switzerland

6.03 Quality of vocational training 1-7 (best) 2.9 31.7 = 138 Switzerland

6.04 Skillset of graduates 1-7 (best) 3.9 47.7 = 82 Switzerland

6.05 Digital skills among population 1-7 (best) 2.8 30.7 = 135 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 3.6 43.8 = 107 United States

6.07 School life expectancy Years 11.7 64.9 = 106 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 2.8 29.6 = 117 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 49.7 0.8 133 Multiple (6)

Economy Profiles

133 | The Global Competitiveness Report 2018

Burundi 136th/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 45.6 127 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 3.4 39.4 = 99 Singapore

7.02 Extent of market dominance 1-7 (best) 3.4 40.4 = 103 Switzerland

7.03 Competition in services 1-7 (best) 3.9 47.6 = 134 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 3.2 36.7 = 137 Singapore

7.05 Trade tariffs % duty 11.68 22.1 120 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 6.3 87.6 55 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 1.7 17.2 136 Germany

7.08 Services trade openness 0-100 (worst) 20.2 79.8 = 37 Ecuador

0-100 (best) - 44.5 133 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 15.9 75.2 = 69 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 3.2 36.6 = 117 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 4.1 51.0 = 98 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 5.4 74.1 = 30 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 2.4 23.1 = 113 Switzerland

8.06 Workers' rights 0-100 (best) 0.0 0.0 116 Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 3.5 42.2 = 111 Albania

8.08 Internal Labour mobility 1-7 (best) 3.8 46.3 = 122 Guinea

8.09 Reliance on professional management 1-7 (best) 3.5 41.0 = 116 Finland

8.10 Pay and productivity 1-7 (best) 3.0 34.0 = 128 United States

8.11 Female participation in Labour force ratio 0.28 9.7 127 Multiple (4)

8.12 Labour tax rate % 10.2 96.9 = 31 Multiple (26)

0-100 (best) - 42.2 135 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 16.6 17.5 128 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 3.0 33.5 = 125 United States

9.03 Venture capital availability 1-7 (best) 2.6 26.2 = 100 United States

9.04 Market capitalization % GDP 0.0 0.0 121 Multiple (12)

9.05 Insurance premium % GDP 0.5 7.9 = 125 Multiple (16)

9.06 Soundness of banks 1-7 (best) 3.2 36.1 = 130 Finland

9.07 Non-performing loans % loan portfolio value 21.1 58.5 131 Multiple (2)

9.08 Credit gap percentage points -0.3 100.0 = 71 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio 19.2 100.0 = 27 Multiple (72)

0-100 (best) - 22.6 136 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 7 n/a 135 China

10.02 Imports % GDP 31.4 n/a 103 Hong Kong SAR

0-100 (best) - 48.8 123 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 33.9 83.1 117 Multiple (2)

11.02 Time to start a business days 4.0 96.5 = 12 New Zealand

11.03 Insolvency recovery rate cents/$ 7.7 8.3 131 Norway

11.04 Insolvency regulatory framework 0-16 (best) 8.5 53.1 = 82 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 3.2 36.4 = 132 Israel

11.06 Willingness to delegate authority 1-7 (best) 3.9 47.9 = 106 Denmark

11.07 Growth of innovative companies 1-7 (best) 2.8 30.4 = 138 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 3.1 34.8 = 117 United States

0-100 (best) - 23.8 131 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 3.6 44.0 = 126 Canada

12.02 State of cluster development 1-7 (best) 3.1 35.1 = 116 United States

12.03 International co-inventions applications/million pop. 0.00 0.0 125 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 3.3 38.4 = 95 United States

12.05 Scientific publications H Index 36.0 53.5 136 Multiple (7)

12.06 Patent applications applications/million pop. 0.00 0.0 129 Multiple (8)

12.07 R&D expenditures % GDP 0.1 4.0 = 103 Multiple (7)

12.08 Quality of research institutions index 0.00 0.0 112 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 2.1 18.3 = 137 United States

12.10 Trademark applications applications/million pop. n/a 45.0 n/a Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 133

Economy Profiles

135 | The Global Competitiveness Report 2018

Key Previous edition Lower middle income group average East Asia and Pacific averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



110th



126th



112nd



92nd



74th



104th



121st



114th



65th



92nd



88th



128th



96th Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

50 42

52 44

74

63

41 50

60 54

46 45

31

Cambodia 110th / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 109th / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita Global Gender Gap Index 0-1 (gender parity)

16.0

1,389.6

6.1

0.05

0.2

12.3

1.3 0.7

Economy Profiles

The Global Competitiveness Report 2018 | 135

Cambodia 110th/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 41.9 126 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 4.2 53.8 101 Finland

1.02 Homicide rate /100,000 pop. 1.8 95.4 = 59 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 100.0 100.0 25 Multiple (24)

1.04 Reliability of police services 1-7 (best) 3.2 37.1 118 Finland

1.05 Social capital 0-100 (high) 44.9 44.9 111 Australia

1.06 Budget transparency 0-100 (best) 34.6 34.6 = 116 Multiple (2)

1.07 Judicial independence 1-7 (best) 2.5 25.1 121 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 2.8 30.7 100 Finland

1.09 Freedom of the press 0-100 (worst) 45.9 54.1 116 Norway

1.10 Burden of government regulation 1-7 (best) 3.6 42.5 61 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 3.0 33.9 101 Singapore

1.12 E-Participation Index 0-1 (best) 0.17 17.4 132 Multiple (3)

1.13 Future orientation of government 1-7 (best) 3.4 40.7 87 Singapore

1.14 Incidence of corruption 0-100 (best) 21.0 21.0 = 134 New Zealand

1.15 Property rights 1-7 (best) 4.0 50.6 93 Finland

1.16 Intellectual property protection 1-7 (best) 3.3 38.5 123 Finland

1.17 Quality of land administration 0-30 (best) 7.5 25.0 = 118 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 3.7 44.4 123 Finland

1.19 Conflict of interest regulation 0-10 (best) 6.7 67.0 = 32 Multiple (2)

1.20 Shareholder governance 0-10 (best) 3.3 33.0 = 124 Kazakhstan

0-100 (best) - 51.7 112 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 47.2 47.2 = 100 United States

2.02 Quality of roads 1-7 (best) 3.3 38.8 100 Singapore

2.03 Railroad density km of roads/square km 3.5 8.9 = 78 Multiple (20)

2.04 Efficiency of train services 1-7 (best) 2.2 19.2 109 Switzerland

2.05 Airport connectivity score 57,534.6 53.9 58 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 3.6 42.7 114 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) 8.0 8.0 93 Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 3.6 43.3 86 Singapore

2.09 Electrification rate % pop. 59.7 59.7 115 Multiple (66)

2.10 Electric power transmission and distribution losses % output 13.7 89.9 88 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 24.1 77.5 = 99 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 4.3 55.2 92 Switzerland

0-100 (best) - 44.4 92 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 116.0 96.7 75 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 66.9 n/a 73 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 0.8 1.6 110 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 0.2 n/a 80 Korea, Rep.

3.05 Internet users % pop. 32.4 32.4 99 Iceland

0-100 (best) - 74.4 74 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change 3.0 100.0 = 1 Multiple (74)

4.02 Debt dynamics 0-100 (best) 48.8 48.8 89 Multiple (36)

0-100 (best) - 62.9 104 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 60.1 62.9 103 Multiple (4)

0-100 (best) - 41.0 121 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 4.6 30.7 = 125 Finland

6.02 Extent of staff training 1-7 (best) 3.8 46.8 72 Switzerland

6.03 Quality of vocational training 1-7 (best) 3.4 40.1 118 Switzerland

6.04 Skillset of graduates 1-7 (best) 3.5 41.8 111 Switzerland

6.05 Digital skills among population 1-7 (best) 3.6 43.5 107 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 3.4 39.5 121 United States

6.07 School life expectancy Years 10.9 60.6 = 114 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 3.5 42.1 62 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 42.5 18.7 124 Multiple (6)

Economy Profiles

137 | The Global Competitiveness Report 2018

Cambodia 110th/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 50.0 114 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 3.2 36.8 111 Singapore

7.02 Extent of market dominance 1-7 (best) 3.4 40.8 100 Switzerland

7.03 Competition in services 1-7 (best) 4.4 57.4 113 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 4.2 54.1 84 Singapore

7.05 Trade tariffs % duty 9.72 35.2 98 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 5.5 75.6 = 74 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 2.4 34.2 109 Germany

7.08 Services trade openness 0-100 (worst) 23.7 76.3 = 50 Ecuador

0-100 (best) - 59.7 65 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 19.4 68.0 = 85 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 4.1 51.9 45 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 4.4 57.0 60 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 4.4 57.1 109 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 2.9 31.2 90 Switzerland

8.06 Workers' rights 0-100 (best) 56.7 56.7 = 112 Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 4.1 52.1 66 Albania

8.08 Internal Labour mobility 1-7 (best) 4.0 50.0 108 Guinea

8.09 Reliance on professional management 1-7 (best) 3.8 46.5 97 Finland

8.10 Pay and productivity 1-7 (best) 4.1 52.1 55 United States

8.11 Female participation in Labour force ratio 0.74 66.9 66 Multiple (4)

8.12 Labour tax rate % 0.5 100.0 = 7 Multiple (26)

0-100 (best) - 53.6 92 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 62.3 65.6 52 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 3.8 45.9 70 United States

9.03 Venture capital availability 1-7 (best) 2.9 31.2 73 United States

9.04 Market capitalization % GDP 0.4 0.4 = 115 Multiple (12)

9.05 Insurance premium % GDP 0.3 5.6 = 129 Multiple (16)

9.06 Soundness of banks 1-7 (best) 4.5 57.9 91 Finland

9.07 Non-performing loans % loan portfolio value 2.1 96.7 35 Multiple (2)

9.08 Credit gap percentage points 9.9 79.3 133 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio 21.7 100.0 = 14 Multiple (72)

0-100 (best) - 46.2 88 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 59 n/a 93 China

10.02 Imports % GDP 72.9 n/a 21 Hong Kong SAR

0-100 (best) - 45.3 128 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 51.3 74.4 129 Multiple (2)

11.02 Time to start a business days 99.0 1.0 = 139 New Zealand

11.03 Insolvency recovery rate cents/$ 14.2 15.3 125 Norway

11.04 Insolvency regulatory framework 0-16 (best) 13.0 81.3 = 17 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 3.7 44.2 96 Israel

11.06 Willingness to delegate authority 1-7 (best) 3.9 48.5 101 Denmark

11.07 Growth of innovative companies 1-7 (best) 4.2 53.5 51 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 3.7 44.3 54 United States

0-100 (best) - 31.2 96 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 4.1 52.2 93 Canada

12.02 State of cluster development 1-7 (best) 4.1 52.2 45 United States

12.03 International co-inventions applications/million pop. 0.02 0.7 107 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 3.6 43.1 69 United States

12.05 Scientific publications H Index 87.7 66.4 101 Multiple (7)

12.06 Patent applications applications/million pop. 0.02 0.4 113 Multiple (8)

12.07 R&D expenditures % GDP 0.1 3.9 105 Multiple (7)

12.08 Quality of research institutions index 0.00 0.0 112 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 3.7 45.3 47 United States

12.10 Trademark applications applications/million pop. 83.05 47.7 107 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 137

Economy Profiles

139 | The Global Competitiveness Report 2018

Key Previous edition Lower middle income group average Sub-Saharan Africa averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



121st



125th



125th



131st



76th



132nd



111th



109th



106th



130th



89th



117th



109th Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

45 43 42

22

74

39 47

51 52 45 46

50

29

Cameroon 121st / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 118th / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Inclusive Development Index 1-7 (best)

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -100 (perfect inequality)

24.3

1,400.7

4.1

0.07

4.2

2.1

1.3

3.3

0.7

46.6

Economy Profiles

The Global Competitiveness Report 2018 | 139

Cameroon 121st/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 43.0 125 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 4.1 51.2 110 Finland

1.02 Homicide rate /100,000 pop. 4.2 87.5 = 82 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 79.9 79.9 129 Multiple (24)

1.04 Reliability of police services 1-7 (best) 4.1 52.3 86 Finland

1.05 Social capital 0-100 (high) 46.0 46.0 103 Australia

1.06 Budget transparency 0-100 (best) 7.7 7.7 = 135 Multiple (2)

1.07 Judicial independence 1-7 (best) 3.0 33.0 106 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 3.1 34.9 81 Finland

1.09 Freedom of the press 0-100 (worst) 40.9 59.1 105 Norway

1.10 Burden of government regulation 1-7 (best) 3.5 41.4 65 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 3.6 43.3 74 Singapore

1.12 E-Participation Index 0-1 (best) 0.33 32.6 122 Multiple (3)

1.13 Future orientation of government 1-7 (best) 3.6 43.9 74 Singapore

1.14 Incidence of corruption 0-100 (best) 25.0 25.0 129 New Zealand

1.15 Property rights 1-7 (best) 4.1 52.1 82 Finland

1.16 Intellectual property protection 1-7 (best) 4.3 54.6 62 Finland

1.17 Quality of land administration 0-30 (best) 8.0 26.7 = 113 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 3.8 47.0 117 Finland

1.19 Conflict of interest regulation 0-10 (best) 4.7 47.0 = 106 Multiple (2)

1.20 Shareholder governance 0-10 (best) 3.7 37.0 = 112 Kazakhstan

0-100 (best) - 42.1 125 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 43.3 43.3 = 109 United States

2.02 Quality of roads 1-7 (best) 2.8 30.1 120 Singapore

2.03 Railroad density km of roads/square km 2.1 5.1 = 85 Multiple (20)

2.04 Efficiency of train services 1-7 (best) 2.8 30.8 84 Switzerland

2.05 Airport connectivity score 3,643.4 22.6 121 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 3.2 37.1 125 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) 14.2 14.2 73 Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 3.1 35.6 102 Singapore

2.09 Electrification rate % pop. 63.3 63.3 112 Multiple (66)

2.10 Electric power transmission and distribution losses % output 28.4 74.6 122 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 40.8 60.4 125 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 2.7 28.8 123 Switzerland

0-100 (best) - 22.0 131 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 81.9 68.3 118 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 10.5 n/a 135 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 0.2 0.4 128 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 0.0 n/a 107 Korea, Rep.

3.05 Internet users % pop. 25.0 25.0 111 Iceland

0-100 (best) - 74.3 76 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change 0.8 100.0 = 1 Multiple (74)

4.02 Debt dynamics 0-100 (best) 48.6 48.6 93 Multiple (36)

0-100 (best) - 39.0 132 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 52.5 39.0 131 Multiple (4)

0-100 (best) - 47.4 111 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 6.4 42.7 = 110 Finland

6.02 Extent of staff training 1-7 (best) 3.6 42.7 102 Switzerland

6.03 Quality of vocational training 1-7 (best) 4.0 50.5 72 Switzerland

6.04 Skillset of graduates 1-7 (best) 3.9 48.7 77 Switzerland

6.05 Digital skills among population 1-7 (best) 3.8 46.5 92 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 4.4 56.1 55 United States

6.07 School life expectancy Years 12.5 69.5 = 94 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 3.3 38.8 71 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 42.7 18.2 127 Multiple (6)

Economy Profiles

141 | The Global Competitiveness Report 2018

Cameroon 121st/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 51.1 109 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 3.8 46.8 60 Singapore

7.02 Extent of market dominance 1-7 (best) 3.7 44.9 73 Switzerland

7.03 Competition in services 1-7 (best) 4.6 60.8 96 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 4.2 53.8 88 Singapore

7.05 Trade tariffs % duty 15.76 0.0 136 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 6.6 93.2 = 25 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 2.5 36.5 92 Germany

7.08 Services trade openness 0-100 (worst) 26.4 73.6 = 55 Ecuador

0-100 (best) - 51.9 106 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 19.9 67.0 = 87 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 4.0 49.8 53 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 3.9 49.1 107 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 5.0 67.3 59 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 2.6 25.8 108 Switzerland

8.06 Workers' rights 0-100 (best) 67.0 67.0 84 Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 4.3 55.6 46 Albania

8.08 Internal Labour mobility 1-7 (best) 4.9 65.5 26 Guinea

8.09 Reliance on professional management 1-7 (best) 3.5 41.5 114 Finland

8.10 Pay and productivity 1-7 (best) 3.3 37.7 122 United States

8.11 Female participation in Labour force ratio 0.41 26.7 110 Multiple (4)

8.12 Labour tax rate % 18.3 85.7 = 80 Multiple (26)

0-100 (best) - 45.0 130 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 15.0 15.8 131 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 3.2 36.7 116 United States

9.03 Venture capital availability 1-7 (best) 2.4 24.0 105 United States

9.04 Market capitalization % GDP 1.1 1.1 = 113 Multiple (12)

9.05 Insurance premium % GDP 0.8 14.2 = 102 Multiple (16)

9.06 Soundness of banks 1-7 (best) 4.1 51.9 105 Finland

9.07 Non-performing loans % loan portfolio value 10.7 79.5 108 Multiple (2)

9.08 Credit gap percentage points 0.6 100.0 = 83 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio 9.5 81.5 = 118 Multiple (72)

0-100 (best) - 46.0 89 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 81 n/a 81 China

10.02 Imports % GDP 23.2 n/a 121 Hong Kong SAR

0-100 (best) - 50.3 117 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 35.8 82.1 119 Multiple (2)

11.02 Time to start a business days 16.5 83.9 = 91 New Zealand

11.03 Insolvency recovery rate cents/$ 16.0 17.2 122 Norway

11.04 Insolvency regulatory framework 0-16 (best) 9.0 56.3 = 71 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 3.7 44.7 94 Israel

11.06 Willingness to delegate authority 1-7 (best) 3.6 43.8 119 Denmark

11.07 Growth of innovative companies 1-7 (best) 3.3 38.3 122 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 3.2 36.4 105 United States

0-100 (best) - 29.1 109 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 3.8 46.1 122 Canada

12.02 State of cluster development 1-7 (best) 3.1 35.3 114 United States

12.03 International co-inventions applications/million pop. 0.02 0.5 113 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 3.4 40.2 87 United States

12.05 Scientific publications H Index 108.3 69.5 90 Multiple (7)

12.06 Patent applications applications/million pop. 0.02 0.3 118 Multiple (8)

12.07 R&D expenditures % GDP n/a 9.8 n/a Multiple (7)

12.08 Quality of research institutions index 0.01 1.7 73 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 2.8 30.0 110 United States

12.10 Trademark applications applications/million pop. 216.91 57.9 90 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 141

Economy Profiles

143 | The Global Competitiveness Report 2018

Key Previous edition High income group average Europe and North America averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



12th



11th



25th



34th



1st



12th



11th



20th



6th



11th



15th



13th



13th Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

80 75

81

69

100 97

81

65

77 86

77 76 75

Canada 12th / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 10th / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Inclusive Development Index 1-7 (best)

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -100 (perfect inequality)

36.7

45,077.4

1.6

1.39

6.3

2.7

8.1

5.1

0.8

34.0

Economy Profiles

The Global Competitiveness Report 2018 | 143

Canada 12th/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 75.5 11 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 5.4 72.9 36 Finland

1.02 Homicide rate /100,000 pop. 1.7 96.0 54 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 98.8 98.8 94 Multiple (24)

1.04 Reliability of police services 1-7 (best) 6.2 87.1 7 Finland

1.05 Social capital 0-100 (high) 64.0 64.0 6 Australia

1.06 Budget transparency 0-100 (best) 57.7 57.7 = 61 Multiple (2)

1.07 Judicial independence 1-7 (best) 6.2 87.0 6 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 4.3 54.7 25 Finland

1.09 Freedom of the press 0-100 (worst) 15.3 84.7 18 Norway

1.10 Burden of government regulation 1-7 (best) 3.7 44.3 53 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 4.7 62.4 24 Singapore

1.12 E-Participation Index 0-1 (best) 0.91 91.0 27 Multiple (3)

1.13 Future orientation of government 1-7 (best) 4.4 56.8 29 Singapore

1.14 Incidence of corruption 0-100 (best) 82.0 82.0 = 8 New Zealand

1.15 Property rights 1-7 (best) 6.1 84.2 8 Finland

1.16 Intellectual property protection 1-7 (best) 5.6 77.3 18 Finland

1.17 Quality of land administration 0-30 (best) 21.5 71.7 = 39 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 6.2 87.1 6 Finland

1.19 Conflict of interest regulation 0-10 (best) 8.7 87.0 = 4 Multiple (2)

1.20 Shareholder governance 0-10 (best) 7.0 70.0 = 24 Kazakhstan

0-100 (best) - 80.6 25 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 93.4 93.4 = 8 United States

2.02 Quality of roads 1-7 (best) 5.2 70.2 25 Singapore

2.03 Railroad density km of roads/square km 5.2 13.1 = 66 Multiple (20)

2.04 Efficiency of train services 1-7 (best) 4.3 54.2 38 Switzerland

2.05 Airport connectivity score 594,683.5 96.3 12 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 5.4 73.8 30 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) 45.4 45.4 33 Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 5.1 68.4 24 Singapore

2.09 Electrification rate % pop. 100.0 100.0 = 1 Multiple (66)

2.10 Electric power transmission and distribution losses % output 10.9 92.8 69 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 0.7 100.0 = 16 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 6.7 95.1 13 Switzerland

0-100 (best) - 68.6 34 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 85.9 71.6 114 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 72.5 n/a 63 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 38.0 76.0 12 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 3.7 n/a 41 Korea, Rep.

3.05 Internet users % pop. 91.2 91.2 10 Iceland

0-100 (best) - 100.0 = 1 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change 1.5 100.0 = 1 Multiple (74)

4.02 Debt dynamics 0-100 (best) 100.0 100.0 = 1 Multiple (36)

0-100 (best) - 97.5 12 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 71.2 97.5 11 Multiple (4)

0-100 (best) - 81.0 11 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 13.8 92.0 = 3 Finland

6.02 Extent of staff training 1-7 (best) 4.9 65.0 20 Switzerland

6.03 Quality of vocational training 1-7 (best) 5.2 69.7 11 Switzerland

6.04 Skillset of graduates 1-7 (best) 5.0 66.4 20 Switzerland

6.05 Digital skills among population 1-7 (best) 5.2 70.1 18 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 5.0 66.4 16 United States

6.07 School life expectancy Years 16.3 90.6 = 28 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 4.9 65.6 12 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 17.0 82.5 = 56 Multiple (6)

Economy Profiles

145 | The Global Competitiveness Report 2018

Canada 12th/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 64.9 20 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 4.1 52.4 44 Singapore

7.02 Extent of market dominance 1-7 (best) 4.5 58.2 25 Switzerland

7.03 Competition in services 1-7 (best) 5.2 70.3 44 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 4.5 58.7 55 Singapore

7.05 Trade tariffs % duty 2.65 82.3 43 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 4.8 62.6 96 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 3.6 65.1 18 Germany

7.08 Services trade openness 0-100 (worst) 21.6 78.4 = 43 Ecuador

0-100 (best) - 77.0 6 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 10.0 87.5 = 30 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 4.5 59.1 18 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 5.2 70.0 17 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 5.4 73.7 31 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 4.7 61.9 22 Switzerland

8.06 Workers' rights 0-100 (best) 90.7 90.7 14 Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 4.0 49.6 81 Albania

8.08 Internal Labour mobility 1-7 (best) 4.9 65.4 29 Guinea

8.09 Reliance on professional management 1-7 (best) 5.9 81.8 10 Finland

8.10 Pay and productivity 1-7 (best) 5.0 66.4 8 United States

8.11 Female participation in Labour force ratio 0.97 96.0 10 Multiple (4)

8.12 Labour tax rate % 12.9 93.2 50 Multiple (26)

0-100 (best) - 86.1 11 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 189.3 100.0 = 4 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 4.6 59.7 21 United States

9.03 Venture capital availability 1-7 (best) 3.7 44.8 31 United States

9.04 Market capitalization % GDP 116.1 100.0 = 11 Multiple (12)

9.05 Insurance premium % GDP 5.6 92.8 = 19 Multiple (16)

9.06 Soundness of banks 1-7 (best) 6.5 92.0 2 Finland

9.07 Non-performing loans % loan portfolio value 0.6 99.8 4 Multiple (2)

9.08 Credit gap percentage points 5.1 91.9 117 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio 14.3 94.3 = 99 Multiple (72)

0-100 (best) - 76.7 15 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 1,612 n/a 17 China

10.02 Imports % GDP 33.1 n/a 94 Hong Kong SAR

0-100 (best) - 76.0 13 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 0.4 99.8 = 9 Multiple (2)

11.02 Time to start a business days 1.5 99.0 = 2 New Zealand

11.03 Insolvency recovery rate cents/$ 87.5 94.2 8 Norway

11.04 Insolvency regulatory framework 0-16 (best) 11.0 68.8 = 46 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 4.4 56.7 31 Israel

11.06 Willingness to delegate authority 1-7 (best) 5.6 76.9 10 Denmark

11.07 Growth of innovative companies 1-7 (best) 4.7 60.9 25 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 4.1 51.7 28 United States

0-100 (best) - 75.0 13 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 5.9 81.7 1 Canada

12.02 State of cluster development 1-7 (best) 4.7 62.0 23 United States

12.03 International co-inventions applications/million pop. 15.93 86.8 14 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 4.6 60.5 24 United States

12.05 Scientific publications H Index 986.3 100.0 = 4 Multiple (7)

12.06 Patent applications applications/million pop. 108.45 86.3 18 Multiple (8)

12.07 R&D expenditures % GDP 1.6 53.8 = 23 Multiple (7)

12.08 Quality of research institutions index 0.34 81.1 10 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 4.4 56.7 21 United States

12.10 Trademark applications applications/million pop. 1,904.45 81.2 39 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 145

Economy Profiles

147 | The Global Competitiveness Report 2018

Key Previous edition Lower middle income group average Sub-Saharan Africa averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



111th



79th



106th



79th



107th



86th



98th



96th



84th



75th



138th



131st



137th Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

50 51 55

48

69 76

53 53 58 57

17

44

21

Cape Verde 111th / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 105th / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -100 (perfect inequality)

0.5

3,237.6

2.2

0.00

10.3

6.9

1.6

0.7

47.2

Economy Profiles

The Global Competitiveness Report 2018 | 147

Cape Verde 111th/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 51.5 79 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 4.8 62.7 75 Finland

1.02 Homicide rate /100,000 pop. 11.5 62.8 120 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 100.0 100.0 = 1 Multiple (24)

1.04 Reliability of police services 1-7 (best) 4.2 54.1 78 Finland

1.05 Social capital 0-100 (high) n/a n/a n/a Australia

1.06 Budget transparency 0-100 (best) 53.8 53.8 = 67 Multiple (2)

1.07 Judicial independence 1-7 (best) 4.1 52.2 58 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 3.1 35.3 80 Finland

1.09 Freedom of the press 0-100 (worst) 20.4 79.6 26 Norway

1.10 Burden of government regulation 1-7 (best) 3.8 46.5 43 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 3.5 41.0 82 Singapore

1.12 E-Participation Index 0-1 (best) 0.43 42.7 111 Multiple (3)

1.13 Future orientation of government 1-7 (best) 3.9 48.2 52 Singapore

1.14 Incidence of corruption 0-100 (best) 55.0 55.0 43 New Zealand

1.15 Property rights 1-7 (best) 4.1 51.3 86 Finland

1.16 Intellectual property protection 1-7 (best) 3.8 47.1 86 Finland

1.17 Quality of land administration 0-30 (best) 10.0 33.3 = 102 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 3.9 47.9 112 Finland

1.19 Conflict of interest regulation 0-10 (best) 4.0 40.0 = 121 Multiple (2)

1.20 Shareholder governance 0-10 (best) 3.3 33.0 = 124 Kazakhstan

0-100 (best) - 54.7 106 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 30.3 30.3 = 124 United States

2.02 Quality of roads 1-7 (best) 3.8 47.2 76 Singapore

2.03 Railroad density km of roads/square km n/a n/a n/a Multiple (20)

2.04 Efficiency of train services 1-7 (best) 2.4 23.3 101 Switzerland

2.05 Airport connectivity score 4,882.6 25.1 116 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 3.2 36.3 127 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) 16.4 16.4 68 Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 3.0 32.5 110 Singapore

2.09 Electrification rate % pop. 96.6 96.6 91 Multiple (66)

2.10 Electric power transmission and distribution losses % output n/a 96.6 n/a Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 22.2 79.4 98 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 3.4 39.5 117 Switzerland

0-100 (best) - 48.1 79 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 112.1 93.4 83 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 69.9 n/a 67 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 2.7 5.3 101 Switzerland

3.04 Fibre Internet subscriptions /100 pop. n/a n/a n/a Korea, Rep.

3.05 Internet users % pop. 50.3 50.3 85 Iceland

0-100 (best) - 68.9 107 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change -0.3 97.7 96 Multiple (74)

4.02 Debt dynamics 0-100 (best) 40.0 40.0 = 113 Multiple (36)

0-100 (best) - 75.6 86 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 64.2 75.6 85 Multiple (4)

0-100 (best) - 53.3 98 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 6.1 40.8 = 113 Finland

6.02 Extent of staff training 1-7 (best) 3.5 41.2 110 Switzerland

6.03 Quality of vocational training 1-7 (best) 4.0 50.1 73 Switzerland

6.04 Skillset of graduates 1-7 (best) 3.8 47.1 88 Switzerland

6.05 Digital skills among population 1-7 (best) 4.1 50.9 77 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 4.1 51.5 71 United States

6.07 School life expectancy Years 12.0 66.5 101 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 3.7 44.2 53 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 21.5 71.3 78 Multiple (6)

Economy Profiles

149 | The Global Competitiveness Report 2018

Cape Verde 111th/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 52.8 96 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 3.9 48.4 55 Singapore

7.02 Extent of market dominance 1-7 (best) 3.5 42.0 88 Switzerland

7.03 Competition in services 1-7 (best) 4.4 57.3 114 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 4.0 49.2 112 Singapore

7.05 Trade tariffs % duty 8.49 43.4 94 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 5.8 79.9 = 68 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) n/a 35.0 n/a Germany

7.08 Services trade openness 0-100 (worst) n/a 74.3 n/a Ecuador

0-100 (best) - 57.6 84 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 17.4 72.1 = 77 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 3.8 46.6 72 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 4.2 53.0 91 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 5.0 66.9 61 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 2.8 30.0 98 Switzerland

8.06 Workers' rights 0-100 (best) n/a 79.7 n/a Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 4.5 58.9 33 Albania

8.08 Internal Labour mobility 1-7 (best) 4.2 53.2 95 Guinea

8.09 Reliance on professional management 1-7 (best) 3.6 43.6 105 Finland

8.10 Pay and productivity 1-7 (best) 3.5 41.4 103 United States

8.11 Female participation in Labour force ratio 0.67 59.2 78 Multiple (4)

8.12 Labour tax rate % 17.6 86.7 = 73 Multiple (26)

0-100 (best) - 57.3 75 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 63.0 66.3 50 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 3.3 38.1 113 United States

9.03 Venture capital availability 1-7 (best) 2.6 27.4 95 United States

9.04 Market capitalization % GDP 41.6 41.6 = 45 Multiple (12)

9.05 Insurance premium % GDP 1.3 21.1 = 87 Multiple (16)

9.06 Soundness of banks 1-7 (best) 4.1 51.4 106 Finland

9.07 Non-performing loans % loan portfolio value 15.5 69.7 = 120 Multiple (2)

9.08 Credit gap percentage points -5.9 100.0 = 32 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio n/a 100.0 = n/a Multiple (72)

0-100 (best) - 17.1 138 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 3 n/a 138 China

10.02 Imports % GDP 63.3 n/a 32 Hong Kong SAR

0-100 (best) - 44.0 131 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 15.4 92.3 95 Multiple (2)

11.02 Time to start a business days 11.0 89.4 = 68 New Zealand

11.03 Insolvency recovery rate cents/$ 0.0 0.0 133 Norway

11.04 Insolvency regulatory framework 0-16 (best) 0.0 0.0 134 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 3.5 41.1 116 Israel

11.06 Willingness to delegate authority 1-7 (best) 3.8 47.5 108 Denmark

11.07 Growth of innovative companies 1-7 (best) 3.6 42.7 106 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 3.3 38.7 90 United States

0-100 (best) - 21.4 137 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 4.4 56.7 74 Canada

12.02 State of cluster development 1-7 (best) 3.3 38.2 103 United States

12.03 International co-inventions applications/million pop. 0.00 0.0 125 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 3.4 39.2 90 United States

12.05 Scientific publications H Index 21.0 45.8 140 Multiple (7)

12.06 Patent applications applications/million pop. 0.00 0.0 129 Multiple (8)

12.07 R&D expenditures % GDP 0.1 2.4 = 114 Multiple (7)

12.08 Quality of research institutions index 0.00 0.0 112 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 2.9 32.1 105 United States

12.10 Trademark applications applications/million pop. 0.00 0.0 124 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 149

Economy Profiles

151 | The Global Competitiveness Report 2018

Key Previous edition Low income group average Sub-Saharan Africa averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



140th



137th



137th



140th



91st



136th



139th



138th



139th



139th



120th



138th



136th Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

36 35 34

13

72

37 30

38 42 39 37

29 22

Chad 140th / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 134th / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Inclusive Development Index 1-7 (best)

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -100 (perfect inequality)

12.2

810.2

3.3

0.02

5.9

2.5

1.6

3.0

0.6

43.3

Economy Profiles

The Global Competitiveness Report 2018 | 151

Chad 140th/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 34.6 137 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 3.2 37.4 128 Finland

1.02 Homicide rate /100,000 pop. 9.0 71.0 = 110 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 96.2 96.2 112 Multiple (24)

1.04 Reliability of police services 1-7 (best) 2.7 29.1 132 Finland

1.05 Social capital 0-100 (high) 40.3 40.3 127 Australia

1.06 Budget transparency 0-100 (best) 3.8 3.8 = 138 Multiple (2)

1.07 Judicial independence 1-7 (best) 2.1 19.0 133 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 2.3 22.3 126 Finland

1.09 Freedom of the press 0-100 (worst) 38.5 61.6 99 Norway

1.10 Burden of government regulation 1-7 (best) 3.0 33.9 101 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 3.0 33.5 105 Singapore

1.12 E-Participation Index 0-1 (best) 0.15 14.6 135 Multiple (3)

1.13 Future orientation of government 1-7 (best) 2.7 28.2 124 Singapore

1.14 Incidence of corruption 0-100 (best) 20.0 20.0 = 137 New Zealand

1.15 Property rights 1-7 (best) 3.0 34.1 132 Finland

1.16 Intellectual property protection 1-7 (best) 3.1 34.8 130 Finland

1.17 Quality of land administration 0-30 (best) 9.0 30.0 = 109 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 2.9 30.9 135 Finland

1.19 Conflict of interest regulation 0-10 (best) 4.0 40.0 = 121 Multiple (2)

1.20 Shareholder governance 0-10 (best) 3.7 37.0 = 112 Kazakhstan

0-100 (best) - 34.1 137 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 47.1 47.1 = 101 United States

2.02 Quality of roads 1-7 (best) 2.2 20.6 135 Singapore

2.03 Railroad density km of roads/square km n/a n/a n/a Multiple (20)

2.04 Efficiency of train services 1-7 (best) 2.0 16.7 118 Switzerland

2.05 Airport connectivity score 942.8 13.2 130 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 2.8 30.2 135 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) n/a n/a n/a Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 2.3 21.7 129 Singapore

2.09 Electrification rate % pop. 8.8 8.8 140 Multiple (66)

2.10 Electric power transmission and distribution losses % output n/a 77.4 n/a Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 45.9 55.2 138 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 2.2 20.6 134 Switzerland

0-100 (best) - 12.8 140 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 38.6 32.2 = 140 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 9.2 n/a 136 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 0.1 0.1 133 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 0.0 n/a 114 Korea, Rep.

3.05 Internet users % pop. 5.0 5.0 140 Iceland

0-100 (best) - 72.3 91 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change -1.0 95.8 103 Multiple (74)

4.02 Debt dynamics 0-100 (best) 48.9 48.9 88 Multiple (36)

0-100 (best) - 36.6 136 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 51.7 36.6 135 Multiple (4)

0-100 (best) - 29.9 139 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 2.3 15.3 = 135 Finland

6.02 Extent of staff training 1-7 (best) 3.1 34.3 132 Switzerland

6.03 Quality of vocational training 1-7 (best) 3.5 41.5 112 Switzerland

6.04 Skillset of graduates 1-7 (best) 4.0 49.3 73 Switzerland

6.05 Digital skills among population 1-7 (best) 3.0 33.7 133 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 3.9 48.2 89 United States

6.07 School life expectancy Years 8.0 44.2 = 139 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 3.2 37.2 79 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 56.9 0.0 136 Multiple (6)

Economy Profiles

153 | The Global Competitiveness Report 2018

Chad 140th/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 38.4 138 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 2.7 28.3 131 Singapore

7.02 Extent of market dominance 1-7 (best) 2.4 22.8 136 Switzerland

7.03 Competition in services 1-7 (best) 3.3 39.0 138 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 3.4 40.6 135 Singapore

7.05 Trade tariffs % duty 15.31 0.0 135 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 6.6 93.2 = 26 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 2.2 28.8 124 Germany

7.08 Services trade openness 0-100 (worst) n/a 71.1 n/a Ecuador

0-100 (best) - 42.0 139 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 13.0 81.3 = 47 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 3.6 43.2 93 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 3.5 41.7 131 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 4.7 61.5 90 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 2.2 19.8 118 Switzerland

8.06 Workers' rights 0-100 (best) 71.1 71.1 = 60 Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 4.0 49.6 82 Albania

8.08 Internal Labour mobility 1-7 (best) 4.4 56.7 76 Guinea

8.09 Reliance on professional management 1-7 (best) 2.2 20.0 139 Finland

8.10 Pay and productivity 1-7 (best) 2.9 32.0 131 United States

8.11 Female participation in Labour force ratio 0.08 0.0 139 Multiple (4)

8.12 Labour tax rate % 28.4 71.7 = 120 Multiple (26)

0-100 (best) - 38.7 139 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 8.8 9.3 138 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 2.6 27.0 134 United States

9.03 Venture capital availability 1-7 (best) 2.1 18.8 125 United States

9.04 Market capitalization % GDP 0.0 0.0 121 Multiple (12)

9.05 Insurance premium % GDP 0.1 2.4 = 134 Multiple (16)

9.06 Soundness of banks 1-7 (best) 3.0 33.1 132 Finland

9.07 Non-performing loans % loan portfolio value 20.9 58.8 130 Multiple (2)

9.08 Credit gap percentage points 2.3 99.1 104 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio n/a 100.0 = n/a Multiple (72)

0-100 (best) - 36.7 120 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 26 n/a 116 China

10.02 Imports % GDP 50.4 n/a 58 Hong Kong SAR

0-100 (best) - 28.6 138 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 171.3 14.3 138 Multiple (2)

11.02 Time to start a business days 60.0 40.2 = 132 New Zealand

11.03 Insolvency recovery rate cents/$ 0.0 0.0 133 Norway

11.04 Insolvency regulatory framework 0-16 (best) 9.0 56.3 = 71 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 2.9 31.9 138 Israel

11.06 Willingness to delegate authority 1-7 (best) 2.8 29.5 137 Denmark

11.07 Growth of innovative companies 1-7 (best) 2.7 28.1 139 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 2.7 28.6 135 United States

0-100 (best) - 21.6 136 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 3.2 37.5 135 Canada

12.02 State of cluster development 1-7 (best) 2.8 30.7 129 United States

12.03 International co-inventions applications/million pop. 0.00 0.0 125 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 2.9 32.3 129 United States

12.05 Scientific publications H Index 37.0 53.9 135 Multiple (7)

12.06 Patent applications applications/million pop. 0.00 0.0 129 Multiple (8)

12.07 R&D expenditures % GDP n/a 1.5 n/a Multiple (7)

12.08 Quality of research institutions index 0.00 0.0 112 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 2.6 26.2 124 United States

12.10 Trademark applications applications/million pop. 21.44 33.5 120 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 153

Economy Profiles

155 | The Global Competitiveness Report 2018

Key Previous edition High income group average Latin America and the Caribbean averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



33rd



32nd



41st



49th



1st



30th



42nd



13th



45th



20th



46th



46th



53rd Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

70 64

75

61

100 93

70 68 63

80

63 64

41

Chile 33rd / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 34th / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Inclusive Development Index 1-7 (best)

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -100 (perfect inequality)

18.4

15,070.4

2.9

0.36

7.0

7.1

4.0

4.4

0.7

47.7

Economy Profiles

The Global Competitiveness Report 2018 | 155

Chile 33rd/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 63.6 32 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 5.2 70.7 45 Finland

1.02 Homicide rate /100,000 pop. 3.5 90.0 80 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 99.1 99.1 89 Multiple (24)

1.04 Reliability of police services 1-7 (best) 5.7 78.3 24 Finland

1.05 Social capital 0-100 (high) 51.2 51.2 64 Australia

1.06 Budget transparency 0-100 (best) 65.4 65.4 = 42 Multiple (2)

1.07 Judicial independence 1-7 (best) 4.9 64.8 36 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 3.6 43.6 54 Finland

1.09 Freedom of the press 0-100 (worst) 22.7 77.3 33 Norway

1.10 Burden of government regulation 1-7 (best) 3.3 38.3 78 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 4.0 50.3 52 Singapore

1.12 E-Participation Index 0-1 (best) 0.82 82.0 45 Multiple (3)

1.13 Future orientation of government 1-7 (best) 3.9 47.8 55 Singapore

1.14 Incidence of corruption 0-100 (best) 67.0 67.0 25 New Zealand

1.15 Property rights 1-7 (best) 5.2 69.5 32 Finland

1.16 Intellectual property protection 1-7 (best) 4.5 59.0 48 Finland

1.17 Quality of land administration 0-30 (best) 15.0 50.0 = 72 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 5.6 77.4 20 Finland

1.19 Conflict of interest regulation 0-10 (best) 7.0 70.0 = 23 Multiple (2)

1.20 Shareholder governance 0-10 (best) 5.0 50.0 = 81 Kazakhstan

0-100 (best) - 75.2 41 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 90.7 90.7 = 14 United States

2.02 Quality of roads 1-7 (best) 5.2 70.3 24 Singapore

2.03 Railroad density km of roads/square km 7.3 18.3 = 56 Multiple (20)

2.04 Efficiency of train services 1-7 (best) 3.0 33.4 79 Switzerland

2.05 Airport connectivity score 74,399.2 57.8 51 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 4.9 65.6 51 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) 41.4 41.4 38 Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 4.8 63.3 32 Singapore

2.09 Electrification rate % pop. 100.0 100.0 = 1 Multiple (66)

2.10 Electric power transmission and distribution losses % output 4.9 99.0 20 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 3.2 98.7 31 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 6.0 83.7 29 Switzerland

0-100 (best) - 61.3 49 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 127.5 100.0 = 43 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 88.2 n/a 38 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 16.9 33.9 55 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 1.1 n/a 57 Korea, Rep.

3.05 Internet users % pop. 83.6 83.6 26 Iceland

0-100 (best) - 100.0 1 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change 3.0 100.0 1 Multiple (74)

4.02 Debt dynamics 0-100 (best) 100.0 100.0 = 1 Multiple (36)

0-100 (best) - 93.4 30 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 69.9 93.4 29 Multiple (4)

0-100 (best) - 69.6 42 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 10.6 70.7 = 47 Finland

6.02 Extent of staff training 1-7 (best) 4.2 53.6 51 Switzerland

6.03 Quality of vocational training 1-7 (best) 4.8 63.2 24 Switzerland

6.04 Skillset of graduates 1-7 (best) 4.5 59.0 38 Switzerland

6.05 Digital skills among population 1-7 (best) 4.2 54.0 65 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 4.8 63.9 24 United States

6.07 School life expectancy Years 16.4 91.1 25 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 3.2 36.9 81 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 18.4 79.1 = 70 Multiple (6)

Economy Profiles

157 | The Global Competitiveness Report 2018

Chile 33rd/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 68.2 13 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 4.8 62.6 15 Singapore

7.02 Extent of market dominance 1-7 (best) 3.5 42.0 89 Switzerland

7.03 Competition in services 1-7 (best) 5.5 75.1 14 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 5.2 70.7 10 Singapore

7.05 Trade tariffs % duty 3.19 78.7 47 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 7.0 99.8 2 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 3.3 56.9 32 Germany

7.08 Services trade openness 0-100 (worst) 23.4 76.6 = 48 Ecuador

0-100 (best) - 63.2 45 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 27.4 51.3 = 114 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 3.0 33.7 124 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 4.4 56.3 65 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 5.9 82.3 7 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 3.0 32.7 82 Switzerland

8.06 Workers' rights 0-100 (best) 76.3 76.3 47 Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 4.7 62.4 18 Albania

8.08 Internal Labour mobility 1-7 (best) 3.9 48.6 111 Guinea

8.09 Reliance on professional management 1-7 (best) 5.0 66.3 30 Finland

8.10 Pay and productivity 1-7 (best) 4.4 56.8 43 United States

8.11 Female participation in Labour force ratio 0.69 61.1 76 Multiple (4)

8.12 Labour tax rate % 5.1 100.0 = 16 Multiple (26)

0-100 (best) - 80.3 20 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 110.1 100.0 = 25 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 4.1 51.7 41 United States

9.03 Venture capital availability 1-7 (best) 3.5 41.7 36 United States

9.04 Market capitalization % GDP 84.6 84.6 21 Multiple (12)

9.05 Insurance premium % GDP 4.0 66.8 = 33 Multiple (16)

9.06 Soundness of banks 1-7 (best) 6.3 88.9 5 Finland

9.07 Non-performing loans % loan portfolio value 1.8 97.3 31 Multiple (2)

9.08 Credit gap percentage points -2.6 100.0 = 49 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio 13.1 91.6 = 107 Multiple (72)

0-100 (best) - 62.7 46 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 411 n/a 43 China

10.02 Imports % GDP 28.2 n/a 113 Hong Kong SAR

0-100 (best) - 64.3 46 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 3.0 98.5 49 Multiple (2)

11.02 Time to start a business days 5.5 95.0 = 25 New Zealand

11.03 Insolvency recovery rate cents/$ 40.8 43.9 56 Norway

11.04 Insolvency regulatory framework 0-16 (best) 12.0 75.0 = 28 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 4.2 53.1 51 Israel

11.06 Willingness to delegate authority 1-7 (best) 4.6 59.7 43 Denmark

11.07 Growth of innovative companies 1-7 (best) 4.0 50.0 65 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 3.4 39.4 82 United States

0-100 (best) - 41.3 53 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 4.0 49.8 104 Canada

12.02 State of cluster development 1-7 (best) 3.6 44.1 81 United States

12.03 International co-inventions applications/million pop. 0.28 7.6 66 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 3.6 43.5 66 United States

12.05 Scientific publications H Index 300.0 84.5 38 Multiple (7)

12.06 Patent applications applications/million pop. 3.78 28.7 48 Multiple (8)

12.07 R&D expenditures % GDP 0.4 12.8 73 Multiple (7)

12.08 Quality of research institutions index 0.05 12.4 36 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 4.0 49.4 38 United States

12.10 Trademark applications applications/million pop. 1,631.21 79.6 42 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 157

Economy Profiles

159 | The Global Competitiveness Report 2018

Key Previous edition Upper middle income group average East Asia and Pacific averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



28th



65th



29th



26th



39th



44th



63rd



55th



69th



30th



1st



43rd



24th Overall Institutions Infrastructure ICT

adoption Macro-

economic stability

Health Skills Product market

Labour market

Financial system

Market size

Business dynamism

Innovation capability

73

55

78 71

98

87

64 57 59

72

100

65 64

China 28th / 140

Global Competitiveness Index 4.0 2018 edition Rank in 2017 edition: 28th / 135

Selected contextual indicators

Social and environmental performance

Population millions

GDP per capita US$

10-year average annual GDP growth %

GDP (PPP) % world GDP

Unemployment rate %

5-year average FDI inward flow % GDP

Environmental footprint gha/capita

Inclusive Development Index 1-7 (best)

Global Gender Gap Index 0-1 (gender parity)

Income Gini 0 (perfect equality) -100 (perfect inequality)

1,390.1

8,643.1

7.9

18.23

4.7

1.2

3.7

4.1

0.7

42.2

Economy Profiles

The Global Competitiveness Report 2018 | 159

China 28th/140

Index Component Value Score *     Rank/140 Best Performer

0-100 (best) - 54.6 65 New Zealand Pillar 1: Institutions

1.01 Organized crime 1-7 (best) 4.6 60.7 = 80 Finland

1.02 Homicide rate /100,000 pop. 0.6 99.6 15 Multiple (9)

1.03 Terrorism incidence 0 (very high) -100 (no incidence) 96.4 96.4 111 Multiple (24)

1.04 Reliability of police services 1-7 (best) 4.6 59.8 = 63 Finland

1.05 Social capital 0-100 (high) 41.0 41.0 125 Australia

1.06 Budget transparency 0-100 (best) 50.0 50.0 = 77 Multiple (2)

1.07 Judicial independence 1-7 (best) 4.5 58.2 = 45 Finland

1.08 Efficiency of legal framework in challenging regulations 1-7 (best) 4.1 51.5 = 34 Finland

1.09 Freedom of the press 0-100 (worst) 78.3 21.7 140 Norway

1.10 Burden of government regulation 1-7 (best) 4.4 56.3 = 18 Singapore

1.11 Efficiency of legal framework in settling disputes 1-7 (best) 4.1 51.9 = 47 Singapore

1.12 E-Participation Index 0-1 (best) 0.90 90.5 29 Multiple (3)

1.13 Future orientation of government 1-7 (best) 4.4 56.3 = 32 Singapore

1.14 Incidence of corruption 0-100 (best) 41.0 41.0 66 New Zealand

1.15 Property rights 1-7 (best) 4.6 59.6 = 53 Finland

1.16 Intellectual property protection 1-7 (best) 4.5 58.3 = 49 Finland

1.17 Quality of land administration 0-30 (best) 18.3 61.0 = 51 Singapore

1.18 Strength of auditing and reporting standards 1-7 (best) 4.5 59.1 = 75 Finland

1.19 Conflict of interest regulation 0-10 (best) 5.0 50.0 = 95 Multiple (2)

1.20 Shareholder governance 0-10 (best) 4.7 47.0 = 90 Kazakhstan

0-100 (best) - 78.1 29 Singapore Pillar 2: Infrastructure

2.01 Road connectivity index 0-100 (best) 88.4 88.4 = 17 United States

2.02 Quality of roads 1-7 (best) 4.6 59.7 = 42 Singapore

2.03 Railroad density km of roads/square km 7.0 17.5 = 58 Multiple (20)

2.04 Efficiency of train services 1-7 (best) 4.5 59.0 = 25 Switzerland

2.05 Airport connectivity score 4,925,930.8 100.0 = 2 Multiple (8)

2.06 Efficiency of air transport services 1-7 (best) 4.6 60.7 = 63 Singapore

2.07 Liner Shipping Connectivity Index 0–157.1 (best) 158.8 100.0 = 1 Multiple (4)

2.08 Efficiency of seaport services 1-7 (best) 4.5 58.6 = 48 Singapore

2.09 Electrification rate % pop. 100.0 100.0 = 1 Multiple (66)

2.10 Electric power transmission and distribution losses % output 5.1 98.8 21 Multiple (9)

2.11 Exposure to unsafe drinking water % pop. 12.4 89.4 75 Multiple (23)

2.12 Reliability of water supply 1-7 (best) 4.9 64.9 = 68 Switzerland

0-100 (best) - 71.5 26 Korea, Rep. Pillar 3: ICT adoption

3.01 Mobile-cellular telephone subscriptions /100 pop. 104.6 87.2 94 Multiple (68)

3.02 Mobile-broadband subscriptions /100 pop. 83.6 n/a 45 United Arab Emirates

3.03 Fixed-broadband Internet subscriptions /100 pop. 26.9 53.7 36 Switzerland

3.04 Fibre Internet subscriptions /100 pop. 18.0 n/a 7 Korea, Rep.

3.05 Internet users % pop. 53.2 53.2 82 Iceland

0-100 (best) - 98.3 39 Multiple (31) Pillar 4: Macroeconomic stability

4.01 Inflation annual % change 1.8 100.0 = 1 Multiple (74)

4.02 Debt dynamics 0-100 (best) 96.6 96.6 39 Multiple (36)

0-100 (best) - 87.0 44 Multiple (4) Pillar 5: Health

5.01 Healthy life expectancy years 67.9 87.0 43 Multiple (4)

0-100 (best) - 64.1 63 Finland Pillar 6: Skills

6.01 Mean years of schooling Years 7.8 52.0 = 97 Finland

6.02 Extent of staff training 1-7 (best) 4.5 58.3 = 35 Switzerland

6.03 Quality of vocational training 1-7 (best) 4.5 58.9 = 40 Switzerland

6.04 Skillset of graduates 1-7 (best) 4.5 59.1 = 37 Switzerland

6.05 Digital skills among population 1-7 (best) 4.7 61.0 = 45 Sweden

6.06 Ease of finding skilled employees 1-7 (best) 4.6 59.7 = 44 United States

6.07 School life expectancy Years 13.5 75.2 = 77 Multiple (9)

6.08 Critical thinking in teaching 1-7 (best) 4.4 56.1 = 24 United States

6.09 Pupil-to-teacher ratio in primary education Ratio 16.5 83.6 52 Multiple (6)

Economy Profiles

161 | The Global Competitiveness Report 2018

China 28th/140

Index Component Value Score *     Rank/140 Best Performer

* Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'. Arrows indicate the direction of the change in score from the previous edition, if available.

Note: For detailed methodology, definitions, sources, and periods, visit http://gcr.weforum.org/

0-100 (best) - 57.4 55 Singapore Pillar 7: Product market

7.01 Distortive effect of taxes and subsidies on competition 1-7 (best) 4.1 51.7 = 45 Singapore

7.02 Extent of market dominance 1-7 (best) 4.5 58.9 = 24 Switzerland

7.03 Competition in services 1-7 (best) 4.7 61.9 = 89 Hong Kong SAR

7.04 Prevalence of non-tariff barriers 1-7 (best) 4.5 58.1 = 57 Singapore

7.05 Trade tariffs % duty 12.19 18.7 124 Hong Kong SAR

7.06 Complexity of tariffs 1-7 (best) 6.4 89.2 44 Hong Kong SAR

7.07 Efficiency of the clearance process 1–5 (best) 3.3 57.1 31 Germany

7.08 Services trade openness 0-100 (worst) 36.6 63.4 = 74 Ecuador

0-100 (best) - 59.3 69 United States Pillar 8: Labour market

8.01 Redundancy costs weeks of salary 27.4 51.3 = 114 Multiple (8)

8.02 Hiring and firing practices 1-7 (best) 4.5 57.7 = 23 Hong Kong SAR

8.03 Cooperation in Labour-employer relations 1-7 (best) 4.6 59.6 = 52 Switzerland

8.04 Flexibility of wage determination 1-7 (best) 4.6 60.5 = 98 Hong Kong SAR

8.05 Active Labour policies 1-7 (best) 4.5 58.2 = 28 Switzerland

8.06 Workers' rights 0-100 (best) 59.8 59.8 105 Multiple (4)

8.07 Ease of hiring foreign labour 1-7 (best) 4.5 58.0 = 36 Albania

8.08 Internal Labour mobility 1-7 (best) 4.4 57.5 = 72 Guinea

8.09 Reliance on professional management 1-7 (best) 4.5 59.0 = 46 Finland

8.10 Pay and productivity 1-7 (best) 4.6 60.5 = 27 United States

8.11 Female participation in Labour force ratio 0.84 79.4 46 Multiple (4)

8.12 Labour tax rate % 48.1 44.3 139 Multiple (26)

0-100 (best) - 71.9 30 United States Pillar 9: Financial system

9.01 Domestic credit to private sector % GDP 149.8 100.0 = 9 Multiple (29)

9.02 Financing of SMEs 1-7 (best) 4.4 57.2 = 31 United States

9.03 Venture capital availability 1-7 (best) 4.4 57.0 = 10 United States

9.04 Market capitalization % GDP 65.6 65.6 30 Multiple (12)

9.05 Insurance premium % GDP 2.8 47.4 = 43 Multiple (16)

9.06 Soundness of banks 1-7 (best) 4.5 58.1 = 90 Finland

9.07 Non-performing loans % loan portfolio value 1.7 97.5 29 Multiple (2)

9.08 Credit gap percentage points 11.8 74.2 135 Multiple (97)

9.09 Banks’ regulatory capital ratio ratio 12.7 90.5 = 113 Multiple (72)

0-100 (best) - 100.0 = 1 China Pillar 10: Market size

10.01 Gross domestic product PPP $ billions 21,095 n/a 1 China

10.02 Imports % GDP 19.2 n/a 130 Hong Kong SAR

0-100 (best) - 64.6 43 United States Pillar 11: Business dynamism

11.01 Cost of starting a business % GNI per capita 0.6 99.7 13 Multiple (2)

11.02 Time to start a business days 22.9 77.5 106 New Zealand

11.03 Insolvency recovery rate cents/$ 36.9 39.7 69 Norway

11.04 Insolvency regulatory framework 0-16 (best) 11.5 71.9 = 38 Multiple (5)

11.05 Attitudes toward entrepreneurial risk 1-7 (best) 4.5 58.4 = 28 Israel

11.06 Willingness to delegate authority 1-7 (best) 4.5 58.5 = 50 Denmark

11.07 Growth of innovative companies 1-7 (best) 4.4 57.2 = 39 Israel

11.08 Companies embracing disruptive ideas 1-7 (best) 4.2 53.8 = 24 United States

0-100 (best) - 64.4 24 Germany Pillar 12: Innovation capability

12.01 Diversity of workforce 1-7 (best) 4.4 56.2 = 77 Canada

12.02 State of cluster development 1-7 (best) 4.6 59.6 = 29 United States

12.03 International co-inventions applications/million pop. 0.99 21.1 45 Multiple (7)

12.04 Multi-stakeholder collaboration 1-7 (best) 4.4 57.3 = 29 United States

12.05 Scientific publications H Index 674.0 96.5 14 Multiple (7)

12.06 Patent applications applications/million pop. 12.28 47.5 32 Multiple (8)

12.07 R&D expenditures % GDP 2.1 68.9 18 Multiple (7)

12.08 Quality of research institutions index 2.38 100.0 = 2 Multiple (7)

12.09 Buyer sophistication 1-7 (best) 4.5 58.2 = 19 United States

12.10 Trademark applications applications/million pop. 1,561.67 79.1 45 Multiple (7)

Economy Profiles

The Global Competitiveness Report 2018 | 161

Economy Profiles

163 | The Global Competitiveness Report 2018

Key Previous edition Upper middle income group average Latin America and the Caribbean averagePerformance Overview 2018

Best

Rank /140

Score 0

10

20

30

40

50

60

70

80

90

100

Overall Score

Enabling Environment

Human Capital Markets

Innovation Ecosystem

USA NZL SGP KOR (31) (4) FIN SGP USA USA CHN USA DEU



60th



89th



83rd



84th



56th

