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.
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.