Competitiveness index: A brief overview of the World Competitiveness Yearbook's competitiveness index
A competitiveness index is a strategic tool designed to assess and benchmark the competitiveness of countries. As such it contemplates multiple structural dimensions of a countries economy that affect their economic performance. The World Competitiveness Yearbook's competitiveness index or ranking assesses and ranks how countries and enterprises manage the totality of their competencies to achieve increased prosperity. The Yearbook's competitiveness index contemplates the elements that shape a country's ability to create and maintain an environment that sustains more value creation for its enterprises and more prosperity for its people.
The Yearbook's competitiveness index is composed by quantitative and qualitative data. Hard statistics represent 2/3 of the overall weight in the final rankings, and are gathered from several international, national and regional organizations; for example, the OECD, World Bank, the UN, WTO, UNESCO and Partner Institutes worldwide. Soft data, compiled through an annual Executive Opinion Survey represents 1/3 of the overall weight. The Survey complements the hard data in order to help quantify competitiveness issues that are not easily capture and measured, for example, management practices, labor relations, corruption, environmental concerns or quality of life. In addition, survey data remain more recent and closer to current events since there is no time lag, which is often a problem with hard statistics that offer a "picture of the past." To put it shortly, the hard statistic component of the competitiveness index analyze competitiveness as it can be measured (e.g. GDP) whereas its survey data analyze competitiveness as it is perceived by the actors involved in the process.
The competitiveness index shows competitiveness trends underlining the evolution of the overall performance of a country which can be compared to its peers. In doing so, the competitiveness index highlights a country's competitive strengths and weaknesses, and simultaneously, the challenges it faces. In addition, the competitiveness index facilitates tracing the evolution of an economy's performance based on the improvements and declines in the values of the indicators covered by the ranking which can be compared to the previous year's values. The competitiveness index also shows what makes an economy attractive.
It is important to point out that the competitiveness index does not offer a single "recipe" for the achievement of competitiveness. Instead, it offers the opportunity to observe the specificities of a country's competitiveness landscape (e.g., its value system, practices and policies that impact competitiveness) and the path that has undertaken thereby highlighting areas in need of improvement.
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