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BW Businessworld

Countries In Competition

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Competition is not just about corporations trying to get higher market shares at the cost of others. Competition between countries is a measure of how efficient they are in converting investment into development.

In an era of economic slowdown and general pessimism, many countries continue to improve their systems and institutions to improve the state of their people.

These countries prove that a committed leadership can overcome global and domestic hurdles to ensure growth, howsoever slight it may be.

This is among the most heartening insight offered by the latest Global Competitiveness Report of the World Economic Forum (WEF).

The report has ranked 148 countries, the highest ever, on their competitiveness based on 12 parameters.  These parameters include quality of institutions, infrastructure, education, health and efficiency of labour and goods markets.

European countries led by Switzerland remain in the top ten despite the euro crisis. Even the US has improved its ranking after 4 years of decline. Flexible labour markets and innovation has allowed it stem its decline and bounce back. Even the UK remains in the top ten. While it has slipped in its ranking because of the decline of its financial markets, its flexible labour markets maintain its efficiency.

In Asia, the small smart countries are on top with Singapore and Hong Kong leading the way. China remains stable at rank 29 while South Korea has slipped surprisingly.

India is among those with the most disappointing performance. It slipped one rank to 60th, but marks a constant decline from 2009. India has been overtaken by several countries including Brazil and South Africa. China is 31 positions ahead while Russia has crept up to 64th rank.

The worrying part is not the ranking itself but the lack of movement and even the decline. The effort to improve its competitiveness is missing. “Notwithstanding improvements across the board over the past few years, very poor public health and education levels remain a prime cause of India’s low productivity. The quality of higher education is better, but enrollment rates at that level remain very low, even by developing country standards,” says the report.

India has been indicted on two critical counts. It has the lowest percentage of working women outside the Arab world and its technological readiness remains poor. Without addressing these fundamentals, India will find it tough to improve its competitiveness and development.

The WEF report comes just ahead of the Annual Meeting of New Champions in Dalian, China where communities of innovators, young scientists, technology pioneers will interact with global business leaders and plan the way ahead for innovation.

Leaders from across the world should take inspiration from the countries and leaders who have improved despite adversity. Countries that grew focused on three priorities:  Protecting institutions, creating flexible labour markets and investing in innovation.  It can’t be too difficult to follow these examples.

(Pranjal Sharma is a senior business writer. He can be contacted at [email protected])