Assessing Southeast Europe’s
Competitiveness in an
International Context
Based on the results of The Global Competitiveness
Report 2007-2008
Presented at the 3rd Regional Competitiveness
Conference in Southeast Europe
 Jennifer Blanke
Director, Senior Economist
World Economic Forum
 Montenegro | 20 May, 2008
Outline
 The Global Competitiveness Index (GCI)
 Southeast Europe’s comparative performance in the
GCI rankings
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Assessing Southeast Europe’s Competitiveness in an
International Context
 The Global Competitiveness Report.
2
 Flagship product: Global Competitiveness Report: launched
in 1979 covering 16 countries; The Report has since
expanded its coverage to 131 countries.
 Co-editors: Professors Michael Porter, Xavier Sala-i-Martin
and Klaus Schwab
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Assessing Southeast Europe’s Competitiveness in an
International Context
Global Competitiveness Report
 Our goal: to provide a benchmarking tool for policymakers
and business leaders
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The Global Competitiveness Network
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Assessing Southeast Europe’s Competitiveness in an
International Context
Regional and special topic reports recently released:

Gender Gap Study 2007

Arab World Competitiveness Report 2007

Africa Competitiveness Report 2007

Travel and Tourism Competitiveness Report 2008

Global Information Technology Report 2007-2008

The Mexico Competitiveness Report 2008
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The Global Competitiveness Report 2007-2008
What are we trying to measure?
GDP per capita 1980-2008 (PPP in international dollars)
40,000
30,000
25,000
20,000
15,000
10,000
5,000
20
08
20
06
20
04
20
02
20
00
19
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
82
19
80
0
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Assessing Southeast Europe’s Competitiveness in an
International Context
Bulgaria
Korea
Slovenia
Germany
Albania
35,000
Source: International Monetary Fund, World Economic Outlook, October 2007
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The Global Competitiveness Report 2007-2008
 Assesses the comparative strengths and weakness of a
large number of economies
 Produced in collaboration with leading academics
worldwide and a global network of partner (research)
institutes
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Assessing Southeast Europe’s Competitiveness in an
International Context
 The most comprehensive data set on competitiveness
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The Global Competitiveness Report 2007-2008
Data
 The Survey records the perspectives of business leaders
around the world; Survey data is indispensable, particularly
for variables where no reliable hard data sources exist
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Assessing Southeast Europe’s Competitiveness in an
International Context
 Use of “hard data” (publicly available information) and
survey data (from the Executive Opinion Survey)
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Assessing Southeast Europe’s Competitiveness in an
International Context
The Global Competitiveness Report 2007-2008
Country coverage
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 How we do not define competitiveness: “a country’s share of
the world market for its products”
 This view implies a zero-sum game - one country’s gain
comes at the expense of others
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Assessing Southeast Europe’s Competitiveness in an
International Context
The Global Competitiveness Index
Definition
 How we do define competitiveness: “the set of institutions,
policies, and factors that determine the level of productivity of
a country.”
 The level of productivity, in turn, sets the sustainable
level of prosperity that can be earned by an economy.
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The Global Competitiveness Index
Stages of Development
1. “Factor-driven stage”
Firms compete in prices, taking advantage of cheap
factors
2. “Efficiency-driven stage”
Efficient production practices to increase productivity
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Assessing Southeast Europe’s Competitiveness in an
International Context
The process of economic development evolves in stages as
captured by the model:
3. “Innovation-driven stage”
Economies need to produce innovative products using
sophisticated production methods
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Global Competitiveness Index 2007-2008
The Framework
BASIC REQUIREMENTS
Institutions
Infrastructure
Macroeconomic stability
Key for
factor-driven
economies
Health and primary education
EFFICIENCY ENHANCERS
5.
6.
7.
8.
9.
10.
Higher education and training
Goods market efficiency
Key for
Labor market efficiency
efficiency-driven
Financial market sophistication
11.
12.
economies
Technological Readiness
Market size
INNOVATION & SOPHISTICATIONS FACTORS
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Assessing Southeast Europe’s Competitiveness in an
International Context
1.
2.
3.
4.
Business sophistication
Innovation
Key for
innovation-driven
economies
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Global Competitiveness Index 2007-2008
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Assessing Southeast Europe’s Competitiveness in an
International Context

Weights of the three main groups of pillars at each stage
of development
Factor-driven
stage
Efficiencydriven stage
Innovation-driven
stage
Basic requirements
60%
40%
20%
Efficiency enhancers
35%
50%
50%
Innovation and
sophistication factors
5%
10%
30%
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Assessing Southeast Europe’s Competitiveness in an
International Context
Global Competitiveness Index 2007-2008
Countries by stage of development
Stage 1
GDP per capita of less than
US$2,000
Transition from 1 to 2
GDP per capita of
US$2,000-US$3,000
Stage 2
GDP per capita of
US$3,000-US$9,000
Transition from 2 to 3
GDP per capita of
US$9,000-US$17,000
Stage 3
GDP per capita more than
US$17,000
Armenia
Mauritania
Albania
Algeria
Bahrain
Australia
Bangladesh
Moldova
Azerbaijan
Argentina
Barbados
Austria
Benin
Mongolia
Bosnia and Herzegovina
Brazil
Croatia
Belgium
Bolivia
Morocco
Botswana
Bulgaria
Czech Republic
Canada
Burkina Faso
Mozambique
China
Chile
Estonia
Cyprus
Burundi
Nepal
Colombia
Costa Rica
Hungary
Denmark
Cambodia
Nicaragua
Ecuador
Dominican Republic
Malta
Finland
Cameroon
Nigeria
El Salvador
Jamaica
Qatar
France
Chad
Pakistan
Guatemala
Latvia
Slovak Republic
Germany
Egypt
Paraguay
Jordan
Lithuania
Taiwan, China
Greece
Ethiopia
Philippines
Kazakhstan
Macedonia, FYR
Trinidad and Tobago
Hong Kong SAR
Gambia, The
Senegal
Kuwait
Malaysia
Iceland
Georgia
Sri Lanka
Libya
Mauritius
Ireland
Guyana
Syria
Oman
Mexico
Israel
Honduras
Tajikistan
Saudi Arabia
Montenegro
Italy
India
Tanzania
Tunisia
Namibia
Japan
Indonesia
Timor-Leste
Ukraine
Panama
Korea
Kenya
Uganda
Venezuela
Peru
Luxembourg
Kyrgyz Republic Uzbekistan
Poland
Netherlands
Lesotho
Vietnam
Romania
New Zealand
Madagascar
Zambia
Russia
Norway
Mali
Zimbabwe
Serbia
Portugal
South Africa
Puerto Rico
Suriname
Singapore
Thailand
Slovenia
Turkey
Spain
Uruguay
Sweden
Switzerland
United Arab Emirates
United Kingdom
United States
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Global Competitiveness Index 2007-2008
Top 20 and selected economies
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Assessing Southeast Europe’s Competitiveness in an
International Context
Rank Economy
Score
Rank Economy
Score
1 United States
5.67
26 Chile
4.77
2 Switzerland
5.62
28 Thailand
4.70
3 Denmark
5.55
29 Spain
4.66
4 Sweden
5.54
34 China
4.57
5 Germany
5.51
39 Slovenia
4.48
6 Finland
5.49
46 Italy
4.36
7 Singapore
5.45
47 Hungary
4.35
8 Japan
5.43
48 India
4.33
9 United Kingdom
5.41
53 Turkey
4.25
10 Netherlands
5.40
57 Croatia
4.20
11 Korea
5.40
58 Russia
4.19
12 Hong Kong SAR
5.37
65 Greece
4.08
13 Canada
5.34
66 Azerbaijan
4.07
14 Taiwan, China
5.25
68 Vietnam
4.04
15 Austria
5.23
72 Brazil
3.99
16 Norway
5.20
73 Ukraine
3.98
17 Israel
5.20
77 Egypt
3.96
18 France
5.18
90 Georgia
3.83
19 Australia
5.17
93 Armenia
3.76
20 Belgium
5.10
129 Zimbabwe
2.88
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Global Competitiveness Index 2007-2008
Southeast Europe’s (SEE) overall ranking
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Assessing Southeast Europe’s Competitiveness in an
International Context
Global
Competitiveness Index
2007-2008
Rank Economy
Score
39
57
74
79
82
91
94
97
106
109
4.48
4.20
3.97
3.93
3.91
3.78
3.73
3.64
3.55
3.48
Slovenia
Croatia
Romania
Bulgaria
Montenegro
Serbia
Macedonia, FYR
Moldova
Bosnia and Herzegovina
Albania
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Assessing Southeast Europe’s Competitiveness in an
International Context
Global Competitiveness Index 2007-2008
Southeast Europe’s (SEE) performance per pillar
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The Global Competitiveness Rankings 2007-2008
Regional comparisons: SEE average vs. EU
Accession 12
SEE average
EU Accession 12
Institutions
7
Infrastructure
5
Business sophistication
Macroeconomic stability
3
Market size
Technological readiness
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Assessing Southeast Europe’s Competitiveness in an
International Context
Innovation
1
Health and primary
education
Higher education and
training
Financial market
Goods market efficiency
sophistication
Labor market efficiency
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The Global Competitiveness Rankings 2007-2008
Regional comparisons: SEE average vs. EU 25
SEE average
Average EU 25
Institutions
7
Infrastructure
5
Business sophistication
Macroeconomic stability
3
Market size
Technological readiness
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Assessing Southeast Europe’s Competitiveness in an
International Context
Innovation
1
Health and primary
education
Higher education and
training
Financial market
Goods market efficiency
sophistication
Labor market efficiency
18
The Global Competitiveness Rankings 2007-2008
Regional comparisons: SEE average vs. EU 15
SEE average
EU 15
Innovation
7
Infrastructure
5
Business sophistication
Macroeconomic stability
3
Market size
Technological readiness
1
Health and primary
education
Higher education and
training
Financial market
Goods market efficiency
sophistication
Labor market efficiency
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Assessing Southeast Europe’s Competitiveness in an
International Context
Institutions
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The Global Competitiveness Rankings 2007-2008
Regional comparisons: SEE average vs. Latin
America and the Caribbean
SEE average
Latin America and the Caribbean
Institutions
Infrastructure
5
Business sophistication
Macroeconomic stability
3
Market size
Technological readiness
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Assessing Southeast Europe’s Competitiveness in an
International Context
7
Innovation
1
Health and primary
education
Higher education and
training
Financial market
Goods market efficiency
sophistication
Labor market efficiency
20
The Global Competitiveness Rankings 2007-2008
Regional comparisons: SEE average vs. East Asian
NICs average (Hong Kong, South Korea, Singapore, and Taiwan)
SEE average
East Asian NICs average
Institutions
7
Infrastructure
5
Macroeconomic stability
Business sophistication
3
Market size
Technological readiness
|June, 2008
Assessing Southeast Europe’s Competitiveness in an
International Context
Innovation
1
Health and primary
education
Higher education and
training
Financial market
Goods market efficiency
sophistication
Labor market efficiency
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Assessing Southeast Europe’s Competitiveness in an
International Context
The Global Competitiveness Rankings 2007-2008
SEE and selected comparators (scores on a scale of 1 to 7)
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Assessing Southeast Europe’s Competitiveness in an
International Context
The Global Competitiveness Rankings 2007-2008
Case study: Montenegro’s overall performance
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Assessing Southeast Europe’s Competitiveness in an
International Context
The Global Competitiveness Rankings 2007-2008
Case study: Montenegro’s comparative
advantages
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Assessing Southeast Europe’s Competitiveness in an
International Context
The Global Competitiveness Rankings 2007-2008
Case study: Montenegro’s comparative
disadvantages
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The Global Competitiveness Rankings 2007-2008
Montenegro vs. EU 27
Montenegro
EU 27
Institutions
7
Infrastructure
5
Business sophistication
Macroeconomic stability
3
Market size
Health and primary education
1
Technological readiness
Higher education and training
Financial market sophistication
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Assessing Southeast Europe’s Competitiveness in an
International Context
Innovation
Goods market efficiency
Labor market efficiency
26
The Global Competitiveness Rankings 2007-2008
Montenegro vs. EU Accession 12
Montenegro
EU Accession 12
Institutions
7
Infrastructure
5
Business sophistication
Macroeconomic stability
3
Market size
Health and primary education
1
Technological readiness
Higher education and training
Financial market sophistication
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Assessing Southeast Europe’s Competitiveness in an
International Context
Innovation
Goods market efficiency
Labor market efficiency
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Assessing Southeast Europe’s Competitiveness in an
International Context
Conclusions

Competitiveness is a complex process, requiring countries
to address issues on many fronts

Several countries in the Southeast Europe region have a
number of competitive strengths, especially regarding the
quality of basic human capital and macroeconomic
stability

But to provide an environment in which its businesses can
thrive, and thus improve its competitive position,
improvements must be made in a number of critical areas
(e.g. institutions, infrastructure, market efficiency)
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Please visit our website for further
information and to download most
sections of the Report:
www.weforum.org
|June, 2008
Assessing Southeast Europe’s Competitiveness in an
International Context
The Global Competitiveness Report
How to obtain more information
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