The Global Competitiveness Index 2014-2015

COMMITTED TO
IMPROVING THE STATE
OF THE WORLD
Ministry of Economy and Sustainable Development of Georgia
2014
GCI - Ranking
In 2014-2015, Georgia takes 69th position, its ranking score amounts to 4,22 (middle indicator)
Georgia improved position by 3 steps
Georgia’s Rating by Years
Comparison of Georgia’s Rating with other Countries
140
6
120
5
100
80
3,73
3,14
3,83
3,89
3,81
3,86
3,95
4,07
4,15
4,22
Azerbaijan [4,53]
3,25
60
94
86
85
Estonia [4,71]
1
29
38
4
3
40
Switzerland [5,70]
90
90
90
93
88
2
77
72
69
20
Lithuania [4,51]
41
Latvia [4,50]
42
Turkey [4,46]
Russia [4,37]
45
53
1
Georgia [4,22]
0
0
2004/ 2005/ 2006/ 2007/ 2008/ 2009/ 2010/ 2011/ 2012/ 2013/ 2014/
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Ranking
Score
Ukraine [4,14]
Armenia [4,01]
Georgia [3,14] 2004/05
69
76
85
94
GCI – Stages of Development
GCI factor group contains 3 stages of country development. Three main stages of country development contain 3 sub-indexes, that are
grouped into 12 pillars of competitiveness
Stages of Development
GDP per capita (US$)
Number of Countries
I. Stage-Factor-driven
Less than 2000
37 economies
Transition from Stage 1 to Stage 2
2,000-2,999
16 economies
II. Stage-Efficiency-driven
3,000-8,999
30 economies (Georgia)
Transition from Stage 2 to Stage 3
9,000-17,000
24 economies
III. Stage-Innovation-driven
More than 17,000
37 economies
II Stage
Efficiency enhancers
I Stage
Basic requirements
1.
2.
3.
4.
Institutions
Infrastructure
Macroeconomic environment
Health and primary education
1.
2.
3.
4.
5.
6.
Higher education and training
Goods market efficiency
Labor market efficiency
Financial market development
Technological readiness
Market size
III Stage - Innovation and
sophistication factors
1. Business sophistication
2. R&D Innovation
In 2014-2015 Georgia’s position compared to 2013-14
 Basic requirements – 48th position with the score of 4.88 (improved by 9 steps)
 Efficiency enhancers – 79th position with the score of 3.92 (improved by 7 step)
 Innovation and sophistication factors – 118th position with the score of 3.49 (improved by 7 step)
GCI – Indicators and Scores
Three main stages of country development contain 3 sub-indexes, that are grouped into 12 pillars of competitiveness,
which encompass 114 components. Pillars are measured by the scores from 0 to 7
Institutions (4.21)
Innovation (2.71)
Infrastructure (4.31)
121
•
•
•
•
•
from 5.45 to 7 score - very high indicator
from 4.51 to 5.44 score - high indicator
from 3.51 to 4.50 score - middle indicator
from3.01 to 3.50 score - law indicator
from 0 to 3 score - very law indicator
48
59
Business
sophistication (3.49) 113
Macroeconomic
environment (5.14)
48
market
size (2.98)
63
103
67
Technological
readiness (3.85)
92
76
41
60
Financial market
development (3.90)
competitive advantage
In 33 components
competitive disadvantage
In 81 components
Note:
Competitive advantage
Competitive disadvantage
Higher education
and training (3.89)
Goods market
efficiency (4.40)
Labor market
efficiency (4.49)
These components are divided into 2 directions:
In 2014/2015 out of 114 components, Georgia has …
Health and
primary
education (5.84)
Factor Driven – Basic Requirements
Pillar I. Institutions – 48th position (overall score - 4.21)
Competitive advantage - in 10 components
Diversion of public funds
(4.5)
Strength of investor
protec. (7.0)
Reliability of police
services (5.4)
23
48 Favori. in decisions of
govern. Offic. (3.4)
28
8
27
Burden of govern regul
(4.5)
Business costs of crime
and viol. (5.3)
Transparency of govern.
Policym. (4.7)
35
Business costs of
terrorism (5.9)
Competitive disadvantage - in 11 components
Property rights (3.9)
Protec. of minority
shareholders’ inter
110
(3.5)
Intellectual prop.
106 protection (3.0)
85
Efficacy of corporate
boards (4.2)
101
79
65
85
54
Ethical behavior of
83
firms (4.2)
Efficiency of legal
framework in
challenging reg. (3.2)
Quality of overall
infrastructure (4.6)
Fixed telephone
lines/100 pop.
(27.7)
Quality of roads
(4.0)
54
24
29
Strength of auditing
and repor. stand (4.4)
Competitive advantage - in 2 components
disadvantage - in 7 components
Irregular payments and
bribes (5.6)
32
16
Organized
crime (5.8)
Pillar II. Infrastructure – 59th position (overall score - 4.31)
Public trust in
politicians (2.9)
Judicial
independence (3.8)
67
71
Wastefulness of
government spending
Effic. of legal (3.2)
framework in settling
disp. (3.7)
Mobile telephone
subscr/100 pop.
(115.0)
Quality of electricity
supply (5.2)
65
40
65
Quality of railroad
infrastructure (3.9)
33
57
67
105
Available airline
seat km/week, mil.
(40.7)
84
Quality of port
infrastructure (4.2)
Quality of air
transport
infrastructure (4.1)
Factor Driven – Basic Requirements
Pillar III. Macroeconomic Environment – 48st position
(overall score - 5.14)
Pillar IV. Health and Primary Education – 63rd position
(overall score - 5.84)
Competitive advantage - in 2 components
disadvantage - in 3 components
Competitive advantage - in 4 components
disadvantage - in 6 components
Govern.
budget balance,
% of GDP(-1.3)
40
Country
84
credit
rating (38.3)
Malaria
cases (0.0)
Primary
education
enrollment (98.3)
Gross national
savings,
72
% of GDP (19.4)
Quality of
92
primary
education (3.5)
Business impact
of malaria (6,3)
98 Tuberculosis
27
cases (116)
1 6
Life
72
expectancy (73.9)
41
Government debt ,
% of GDP (31.8)
78 Inflation,
annual %
change (-0.5)
Infant 84
mortality (17.8)
67 Business impact of
tuberculosis (5.7)
44
59
HIV prevalence,%
adult pop.(0.3)
Business impact of
HIV/AIDS (6.0)
Efficiency Driven - Efficiency Enhancers
ndndposition
Pillar
andTraining
Training– –9292
position
PillarV.V.Higher
Higher Education
Education and
(overall score - 3.89)
Competitivedisadvantage
disadvantage- -inin8 8components
components
Competitive
114
Competitive advantage - in 9 components
Effect of taxation on
incentives to invest
(4.4)
Secondary
education
enrollment (86.8)
Extent of staff
training (3.5)
Pillar
Efficiency––60
60ththposition
position
PillarVI.
VI. Goods
Goods Market Efficiency
(overall score - 4.40)
Imports as a
percentage of GDP
(57.8)
Tertiary education
enrollment (27.9)
80
84
Availability of 116
research &
training services
(3.4)
98
Quality of the
education system
(3.2)
98
105
Quality of math and
science education
(3.4)
22
No procedures
to start
a business (2)
10
Burden of customs
procedures (5.6)
7
Business impact
of rules on FDI (4.9)
6
28
3
2
No days to start
a business (2.0)
32
Trade tariffs,
% duty (1.1)
59
Internet access
in schools (4.6)
Total tax rate,
% profit (16.54)
45
Prevalence of trade
barriers(5.3)
Competitive disadvantage - in 7 components
Intensity of local
competition (4.6)
Quality of
management
schools (3.8)
105
Buyer
sophistication (3.1)
Degree of customer
orientation (3.8)
Extent of market
dominance (3.3)
96
103
121
127 Effectiveness of
anti-monopoly policy
(3.3)
100
Prevalence of
foreign ownership (4.2)
99
Agricultural
policy costs (3.5)
Efficiency Driven - Efficiency Enhancers
Pillar VII. Labor Market Efficiency – 41st position
(overall score - 4.49)
Pillar VIII. Financial Market Development – 76th position
(overall score - 3.90)
Competitive advantage - in 4 components
disadvantage - in 6 components
Competitive advantage - in 1 components
disadvantage - in 7 components
Cooperation in laboremployer relations
(4.2)
Women in labor
force, ratio to men
(0.77)
82
Country capacity to
attract talent (2.6)
116
Availability of
financial services (4.1)
Flexibility of wage
determination (5.6)
80
26
14
20
101
57
78
Reliance on
professional
management (4.1)
Pay and productivity
(4.1)
Affordability of
financial services (4.1)
75
Hiring and firing
practices (4.7)
11
Regulation of 121
securities
exchanges (3.1)
13
Country capacity to
retain talent (3.0)
89
Legal rights
index (9)
Redundancy costs,
weeks of salary (4.3)
Effect of taxation on
incentives to work
(4.4)
126 Financing through
local equity
market (2.2)
67
Soundness of banks
(4.9)
110
118
Venture capital
availability (2.1)
Ease of access to
loans (2.4)
Efficiency Driven - Efficiency Enhancers
Pillar IX. Technological Readiness – 67th position
(overall score – 3.85)
Competitive advantage - in 1 components
disadvantage - in 6 components
Pillar X. Market Size – 103rd position
(overall score - 2.98)
Competitive disadvantage - in 4 components
Domestic market s
size index (2.8)
Availability of latest
technologies (4.5)
Mobile broadband
subscriptions
/100 pop (16.4)
Int’l internet
bandwidth,
kb/s per user (82.1)
89
103
83
113
33
62
Fixed broadband
internet subscriptions
/100 pop (10.2)
Firm-level technology
absorption (4.2)
FDI and technology
transfer (3.9)
101
Exports as a
percentage of GDP
(36.3)
108
76
106
80
Individuals using
internet,% (43.1)
GDP (PPP$billions)
(27.6)
Foreign market size
index (3.6)
Innovation Driven - Innovation & Sophistication Factors
Pillar XI. Business Sophistication – 113rd position
(overall score - 3.49)
Competitive disadvantage - in 9 components
Pillar XII. R&D Innovation – 121st position
(overall score - 2.71)
Competitive disadvantage - in 7 components
Capacity for
innovation (3.3)
Local supplier
quality (3.6)
Willingness to
delegate authority 118
(3.1)
110
138
Local supplier
quantity (3.7)
120
Extent of marketing
104
(3.6)
112
114
Production process
sophistication (3.2)
Control of 99
international
distribution (3.7)
80
106
State of cluster
development (3.2)
PCT patents,
applications/mln.
pop (1.3)
Availability of
scientists and
engineers (3.2)
Quality of scientific
119 research institutions
126
122
Nature of competitive
advantage (3.3)
Value chain
breadth (3.4)
(2.8)
65
Company spending
on R&D (2.4)
69
Gov't procurement
of advanced tech
products (3.5)
University-industry
128 collaboration in
R&D (2.6)
GCI – Problematic Factors for Doing Business
The Most Problematic Factors for Doing Business
Inadequately educated workforce
20,2
Access to financing
18,8
Inadequate supply of infrastructure
10,4
Poor work ethic in national labor force
9,0
Insufficient capacity to innovate
8,3
Policy insability
6,5
Inefficient government bureaucracy
4,9
Tax regulations
4,2
Tax rates
4,0
Government instability/coups
3,7
Restrictive labor regulations
3,1
Poor public health
2,7
Inflation
2,3
Foreign currency regulations
1,8
Corruption
0,1
Crime and theft
0,0
0,0
5,0
10,0
Percent of responses
15,0
20,0
25,0
The Global Competitiveness Index – What is Measured
What is Global Competitiveness Index (GCI)
 GCI is defined by the World Economic Forum. It is a set of institutions, policies, and factors that
determine the level of productivity of a country, conditions of public institutions and technical
conditions
Data used in GCI
 Rating uses public accessible (statistic) datas (WB, IMF, etc.) and results of findings made by
World Economic Forum. These findings are made annually with the support of partner
institutions (research institutions and business centers)
What GCI Report contains
 GCI analysis the factors that play significant role in creating favorable business-climate
environment in the country and are important for competitiveness and manufacture point of
view
 It considers strength and weaknesses of a country, identifies priorities for the facilitation of
political reforms implementation
How many countries GCI Report encompass
 The report 2014-2015 encompasses 144 countries.

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