The scope to increase global productivity is immense

Outlook

The World Economic Forum (WEF) defines competitiveness as the set of institutions, policies and factors that determine an economy’s productivity. The 2017/18 report shows that one-third of countries have lower scores than in 2007, despite easy monetary policy and robust global growth.

North Africa and Venezuela stand out, but the declines in Argentina and Brazil and in Nigeria and South Africa are behind the deterioration in their regions’ growth prospects.

The report recommends improving financial stability as countries have less scope to cope with another crisis. Innovation is happening, helping emerging economies catch up with advanced nations, but more needs to be done to improve workforce rights and flexibility.

Impacts

• China has leaped 70 places for financial development in ten years to 48th, but this is still well below its overall ranking of 27th.
• China’s tech readiness ranking is unchanged at 73rd from 2007, but Russia and other Eastern and Central Europeans have made solid progress.
• Brazil has fallen more than 40 places for innovation in ten years but Argentina has gained 19, Mexico is up 15 and China and Indonesia 20.
• Italy, South Korea, Mexico, Thailand, Hungary, South Africa and Tunisia’s ranking for institutions is 24 or more places lower than 2007.