World Competitiveness Index

Context

With a six-position jump from 43rd to 37th rank on the annual World Competitiveness Index (WCI), India has witnessed the sharpest rise among the Asian economies.

About

Issued by: It is compiled by the Institute for Management Development (IMD).
- WCI was first published in 1989 by the institute.
- It provides extensive coverage of 63 economies.
Factors taken into consideration: It measures the prosperity and competitiveness of countries by examining four factors:
- Economic performance
- Government efficiency
- Business efficiency
- Infrastructure
Top Global performers in the Index:
- Denmark has moved to the top of the list.
- Switzerland slipped from the top ranking to the second position.
- Singapore regained the third spot from fifth last time.
- Others in the top 10 include Sweden at the fourth position, followed by Hong Kong SAR (5th), the Netherlands (6th), Taiwan (7th), Finland (8th), Norway (9th) and the USA (10th).
Top among the Asian countries:
- The top-performing Asian economies are Singapore (3rd), Hong Kong (5th), Taiwan (7th), China (17th) and Australia (19th).
- China also improved its business efficiency, more specifically productivity, and increased its real GDP growth rate compared to the last year.

About Institute for Management Development (IMD)

It is a think-tank, in Switzerland and Singapore.
IMD World Competitiveness Centre ranks 63 economies.
It assesses the extent to which a country promotes the prosperity of its people by measuring economic well-being via hard data and survey responses from executives.

India’s Performance

As 2022 witnessed significant improvement in the competitiveness of the Indian economy due to the improvements in following categories;

Gains in economic performance from 37th to 28th.
Growth in Domestic economy rise from 30th to 9^th
The labour market (a key sub-factor in the business efficiency parameter), moved up from 15th to 6^th
Management practices and business attitudes and values also made major leaps.
India appears to have restored the trust of the business community. Its re-regulation of a number of sectors, including drones, space and geo-spatial mapping, also likely played a role in the country's stellar performance in the 2022.
India is also a driving force in the global movement to fight climate change and its pledge of net-zero by 2070 at the COP26 summit.

Significance

The top five attractive factors of India's economy for business are - a skilled workforce, cost competitiveness, dynamism of the economy, high educational level and open and positive attitudes.

Challenges for India

The challenges that India faces includes;
- Managing trade disruptions and energy security,
- Maintaining high GDP growth post the pandemic,
- Skill development and employment generation,
- Asset monetisation and resource mobilisation for infrastructure development.
The IMD also found that inflationary pressures are affecting the competitiveness of national economies along with COVID-19, and the invasion of Ukraine by Russia.

Impacts on Global order

The three most important trends found to be impacting businesses in 2022 are:
- Inflationary pressures (50%),
- Geopolitical conflicts (49%),
- Supply chain bottlenecks (48%) and
- COVID being the fourth (43%).