Context

World Economic Forum has released ‘Global Competitiveness Report 2018’ with a new milestone of introducing for the first time Global Competitive Index 4.0 to measure how well countries adapt to the Fourth Industrial Revolution (4IR).

About

Global Competitive Index (GCI 4.0)

• The Forum’s 2018 report uses new methodology to understand the full impact of the 4IR, and finds factors including human capital, agility, resilience, openness and innovation becoming increasingly important.
• The new index measures 140 economies against 98 indicators, organized into 12 ‘pillars’ or drivers of productivity, to determine how close the economy is to the ideal state or ‘frontier’ of competitiveness.
• The US topped the rankings, being ‘closest to the competitiveness frontier’, with Singapore, Germany, Switzerland and Japan, completing the top five.
• At the other end of the scale, Haiti, Yemen and Chad were found to be the least competitive economies.
• The new Index emphasises that competitiveness is not only associated with higher incomes, but also better socioeconomic outcomes, including life satisfaction.
• The results of the GCI 4.0 reveal the sobering conclusion that most economies are far from the competitiveness “frontier”—the aggregate ideal across all factors of competitiveness.
• The index integrates well-established aspects with new and emerging levers that drive productivity and growth.
• It emphasizes the role of human capital, innovation, resilience and agility, as not only drivers but also defining features of economic success in the 4IR.
• It calls for better use of technology for economic leapfrogging—but also cautions that this is only possible as part of a holistic approach with other factors of competitiveness.
• Finally, it offers objective, data-driven analysis for dispassionate, future-oriented, and rational policy-making.

GCI –India

• India ranks 58th, up five places from 2017 out of 140 economies.
• The country registered the largest gain of any country in the G20.
• As per the report, India is a remarkable example of a country that has been able to accelerate on the pathway to innovation due to the quality of its research institutions.
• In spite of a high degree of entrepreneurship (23rd), business dynamism is hampered by administrative hurdles.
• India currently ranks 108th on the Health pillar and 96th on the Skills field of the index.

Significance

The Global Competitiveness Report is designed to help policy-makers, business leaders and other stakeholders around the world shape their economic strategies in the era of the Fourth Industrial Revolution. It will also serve as a call to action to engage in the long-term, holistic, agile and far-sighted leadership required to build the competitive economies of the future, lift living standards and provide opportunities for all members of the society.

World Economic Forum: The World Economic Forum is the international organization for public-private cooperation. The forum engages the foremost political, business and other leaders of society to shape global, regional and industry agendas. It was established in 1971 as a not-for-profit foundation and is headquartered in Geneva, Switzerland. It is independent, impartial and not tied to any special interests. The Forum strives in all its efforts to demonstrate entrepreneurship in the global public interest while upholding the highest standards of governance.

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