The World Economic Forum (WEF) had unveiled the 2019 version of the Global Competitiveness Report, introducing the Global Competitiveness Index 4.0 (GCI 4.0). This index offers a comprehensive display of factors and attributes that stimulate productivity, growth, and human development in the period of the Fourth Industrial Revolution.
Understanding the Global Competitiveness Index 4.0
The GCI 4.0 was first introduced in 2018 and encapsulates 141 economies that account for 99% of the world’s GDP. An average inspection of the 2019 GCI 4.0 reveals that the majority of economies are still far off the competitiveness ‘frontier’—the aggregate ideal across all facets of competitiveness. Each country’s performance on the overall GCI is expressed as a ‘progress score’ on a scale from 0 to 100, where 100 represents the ‘frontier’, an ideal state where issues no longer hinder productivity growth.
The Focus of the 2019 Global Competitiveness Report
The current edition of the report emphasises on building shared prosperity (tackling inequality) and managing the transition to a sustainable economy (addressing environmental challenges) along with competitiveness and growth. The report is built on 12 sets of factors, or pillars, that determine productivity. These include: Institutions; Infrastructure; ICT adoption; Macroeconomic stability; Health; Skills; Product market; Labour market; Financial system; Market size; Business dynamism; and Innovation capability. The index has been regularly updated annually since 1979.
| Factor | Description |
|---|---|
| Institutions | Elements affecting business decisions and productivity |
| Infrastructure | Quality and development level of basic facilities |
| ICT Adoption | Rate at which information and communication technology is adopted |
| Macroeconomic stability | Stability of the country’s economic situation |
| Health | General health of the population |
Key Findings of the Report
India, in the report, slipped down 10 positions to the rank of 68th, primarily due to faster improvements of several nations previously ranked lower. Among the positives for India were high ranks on macroeconomic stability (90, 43rd) and market size (93.7, 3rd). Moreover, India showed good performance in terms of innovation (50.9, 35th), staying on par with several advanced economies. A relatively deep and stable financial sector (69.5, 40th) was also among its strengths.
Challenges Faced by India
While India fared well in some areas, it ranked beyond 100th on five pillars, scoring in the top 50 of only four pillars. The nation struggled with some of the essential enablers of competitiveness, such as limited ICT adoption (31.1, 120th)—though this had witnessed a significant improvement since the 2017 edition. Health conditions remained a concern, with low healthy life expectancy (59.4 years, 109th), one of the lowest outside Africa and below the South Asian average. Other challenges included a weak banking system (60.4, 89th), necessity to enhance skills base (50.5, 107th), and low product market efficiency (50.4, 101st) which was undermined by a lack of trade openness (43.9, 131st). The labour market showed lack of worker rights protection, insufficient active labour market policies and critically low participation of women (ratio of female workers to male workers of 0.26, 128th). Among the BRICS nations, China (28th) was the most successful, followed by Russia (43rd), South Africa (60th), India (68th), and Brazil (71st). Singapore emerged as the world’s most competitive economy in 2019, pushing the US to second place. Hong Kong SAR ranked third, followed by the Netherlands (4th) and Switzerland (5th). Vietnam (67th) registered the highest improvement worldwide.
