Latvia in the Global Competitiveness Report

2014-2015

Topical and regional

reports, index

development,

workshops,

training, and much,

much more…

Competitiveness

research at the

World Economic

Forum

We aim to measure what lies behind different growth paths

Source: IMF, World Economic Outlook database, October 2014 edition

Cambodia

China

Latvia

Korea, Rep.

What is competitiveness?

“The set of institutions, policies, and factors that determine the level of productivity of a country, taking into account its level of development. The level of productivity, in turn, sets the level of prosperity that can be earned by an economy”

Our framework: The 12 pillars of competitiveness

The Global Competitiveness Index

Basic Requirements

1.Institutions

2.Infrastructure

3.Macroeconomic environment

4.Health and primary education

Efficiency enhancers

Innovation and sophistication

factors

5.Higher education and training

6. Goods market efficiency

7. Labor market efficiency

8. Financial market development

9. Technological readiness

10. Market size

11. Business sophistication

12. Innovation

Stages of development and the drivers of competitiveness

Innovation-driven stage Transition stage Efficiency-driven stage

Transition stage

Factor-driven stage

Basic

Innovation

Efficiency

$2

,00

0

$3

,00

0

$9

,00

0

$1

7,0

00

GDP per capita US$ (not to scale)

Competitiveness drivers

The GCI data

• 113 individual indicators populating the different pillars

• 20,000 data points in total

• Data sources include international organisations and the World Economic Forum’s Executive Opinion Survey

Examples

The Global Competitiveness Index 2014-2015 Rankings

Rank Country/Economy Score (1-7) Prev. rank Rank Country/Economy Score (1-7) Prev. rank

1 Switzerland 5.7 1 34 Indonesia 4.6 38

2 Singapore 5.6 2 35 Spain 4.6 35

3 United States 5.5 5 36 Portugal 4.5 51

4 Finland 5.5 3 39 Mauritius 4.5 45

5 Germany 5.5 4 42 Latvia 4.5 52

6 Japan 5.5 9 49 Italy 4.4 49

7 Hong Kong SAR 5.5 7 52 Philippines 4.4 59

8 Netherlands 5.5 8 53 Russian Federation 4.4 64

9 United Kingdom 5.4 10 56 South Africa 4.4 53

10 Sweden 5.4 6 57 Brazil 4.3 56

12 United Arab Emirates 5.3 19 61 Mexico 4.3 55

15 Canada 5.2 14 68 Vietnam 4.2 70

20 Malaysia 5.2 24 71 India 4.2 60

23 France 5.1 23 81 Greece 4.0 91

26 Korea, Rep. 5.0 25 127 Nigeria 3.4 120

28 China 4.9 29 134 Myanmar 3.2 139

29 Estonia 4.7 32 140 Angola 3.0 142

33 Chile 4.6 34 144 Guinea 2.8 147

The Global Competitiveness Landscape

= Top 10 economies 100-144

76-100

50-75

26-50

10-25

Top 10

GCI 2014-2015 rank

The Global Competitiveness Report 2014-2015

• Reforming for prosperity Monetary policy has to a large extent driven the global recovery thus far, but sustaining this trend will depend on successfully implementing structural reforms.

• Smart investment in skills and innovation Those economies that consistently rank high in the competitiveness rankings are those that able to develop, attract and retain talent and can constantly introduce new higher value added products and services into the market

• Public-private collaboration Cooperative leadership among business, government and civil society is needed in order to get the world back to sustainable growth and rising living standards.

Latvia’s competitiveness in regional comparison

The competitiveness divide in Europe

European reformers versus non-reformers

Sources: IMF, World Economic Outlook 2014

Country GCI 2014-15

Change to previous year

Country GCI 2014-15 Change to previous year

Finland 4 -1 Czech Republic 37 9

Germany 5 -1 Lithuania 41 7

Netherlands 8 0 Latvia 42 10

United Kingdom 9 1 Poland 43 -1

Sweden 10 -4 Malta 47 -6

Denmark 13 2 Italy 49 0

Belgium 18 -1 Bulgaria 54 3

Luxembourg 19 3 Cyprus 58 0

Austria 21 -5 Romania 59 17

France 23 0 Hungary 60 3

Ireland 25 3 Slovenia 70 -8

Estonia 29 3 Slovak Republic 75 3

Spain 35 0 Croatia 77 -2

Portugal 36 15 Greece 81 10

Latvia – towards improved competitiveness

?

Latvia’s score in the 12 pillars of the GCI 2014-2015

Latvia’s score in the 12 pillars of the GCI 2014-2015

Innovation-driven

Latvia’s score in the 12 pillars of the GCI 2014-2015

Latvia’s performance in innovation and sophistication factor

Better Worse

Latvia’s rank out of 144 economies

Rank of EU 28 economies

Latvia’s performance in public institutions – selected indicators

Latvia’s rank out of 144 economies

Better Worse Rank of EU 28 economies

Latvia’s performance in infrastructure

Latvia’s rank out of 144 economies

Better Worse Rank of EU 28

economies

Latvia’s performance in tech readiness – selected indicators

Latvia’s rank out of 144 economies

Better Worse Rank of EU 28

economies

Latvia’s performance in higher education and training

Latvia’s rank out of 144 economies

Better Worse

Rank of EU 28 economies

Bureaucracy, tax regulations and limited access to finance impede Latvian businesses

From a list of 16 factors Latvian business leaders selected the five most problematic for doing business

Latvia – towards a knowledge-driven economy

4.Health and primary education

2.Infrastructure

1.Institutions

3.Macroeconomic environment

5.Higher education and training

8. Financial market development

7. Labor market efficiency

10. Market size

9. Technological readiness

6. Goods market efficiency

12. Innovation

11. Business sophistication

Impressive progress made post-crisis: improvements in market efficiencies (goods, financial, labour) and the macroeconomic and financial environment (except access to finance)

Competitiveness-enhancing investments in skills and innovation are needed as the country is transitioning towards the innovation-stage of development

Further strengthening of basic pillars of a competitive economy needed: institutions and infrastructure