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India’s Global Competitiveness Index A comparison with UK, China and Hongkong Student Name 11/24/2018
Table of Contents: Introduction ................................................................................................................................................... 2 Description of the 3 efficiency enhancers: .................................................................................................... 2 Higher education and training in the competitiveness index ........................................................................ 3 Technological readiness and global competitiveness index: ........................................................................ 3 Market size and global competitiveness index.............................................................................................. 4 India’s competitiveness in these efficiency enhancers: ................................................................................ 4 Comparing India’s competitiveness with three other countries .................................................................... 5 Comparing India’s competitiveness in Efficiency Enhancers ...................................................................... 7 Summary and conclusion: ............................................................................................................................. 8 References:.................................................................................................................................................... 9
Introduction In this task, we are going to analyze the 3 efficiency enhances in the Global competitiveness index for India and compare it with other countries namely the UK, China and Hong Kong. The 6 efficiency enhancers listed in the Global competitiveness report include the higher education and training, goods market efficiency, labor market efficiency, Financial market development, technological readiness and market size. For this task, the three efficiency enhancer that have been taken include the higher education and training, technological readiness and the market size.
Description of the 3 efficiency enhancers: Though all the 6 efficiency enhancers are considered to be important for Helping in the business Development of international businesses, it is important for the country to have higher education and training for its labor force to participate in the international business environment(Saunders & Charles, 1985). It is also necessary to have technological readiness in order to keep in par with the other countries.
Similarly the market size of the country is also crucial for the
development of market share for both local businesses and global businesses. Hence we have taken these three indicators and have elaborated about the three indicators and the rank with India holds in the three indicators. Higher level of education and training of technical skills are very important for the growth of economy. India has the second largest populated country in the world, it is essential to train the labour force even if the literacy rate is growing over the years. It has been empirically proved that successful Nations which invest more in higher education and training in skill development would move up in the ladder of global competitiveness (Bazargan, Ghasemi, Ardebili, & Zarei, 2017). The growth of internet technologies and cloud computing, and various other computer systems like the enterprise resource planning systems, technological readiness would ensure quality and quantity of the production processes in any country.
Similarly large markets with increasing incomes allow faster growth rates as the aggregate demand for both local commodities and imported goods will increase with increasing incomes as the consumption component of the aggregate demand increases(WEF-GCI, 2018).
Higher education and training in the competitiveness index Global competitiveness index report provides the rankings based on several pillars of economic development and the stages of development begins with the stage of least development which are factor driven, efficiency driven in the second stage and innovation driven in the advanced stage. As the countries in the stage of factor driven moving to the stage of efficiency driven, it becomes necessary to have higher education and training(Bazargan et al., 2017). Countries which are in the least development stage gain competitive advantage based on the natural resources and unskilled labour. At this stage the most important factors that are important include the institutions, infrastructure macroeconomics framework and primary education. However moving into an efficiency driven economy necessitates the economies like India and China to have quality and accessible higher education institutions, efficient labour Markets and commodity markets and the ability of the economy to use Technology efficiently and effectively. Hence it becomes necessary for the Indian economy to develop their workers skills in order to create and use the technological innovations that are necessary for the economy to reach a highest state of development(Saunders & Charles, 1985).
Technological readiness and global competitiveness index: With the intensity of globalization and expansion of international businesses, technological advancement of the economy is the primary requirement in order to compete and sustain in the world market. when we look at the technological innovation and readiness of India, developments in information and Communications Technology has been playing a major role and as penetrated into all industrial sectors that has led to the better results of the economy(Duraisamy & Nedunchezhian, 2015). Technological readiness can otherwise be known as the level of Technical capability of the country and is calculated based on two things namely technological adoption and ICT usage. India being a developing country has its own
constraints but still has made increase progress in the area of ICT and has made significant contributions to the world.
Market size and global competitiveness index In the case of closed economies the market size of an economy would have coincided with its domestic markets. However in a globalized scenario, the countries market will not coincide with its political borders but would include combination of domestic market and foreign market. Market size of an economy according to the GCI, affects the productivity through two ways namely economies of scale and it provide incentives for innovation. Market size allowed for efficiency gains by allowing specialization as identified by Adam Smith and this enables the large markets to take advantage of economies of scale(WEF-GCI, 2018). similarly in the presence of larger markets companies have bigger incentives for generating innovative and new ideas as the largest Rock of resources in the large market increases the possibility of finding new ways to capitalize on the resources as more profits can be made when new ideas are sold in larger markets. Large market size can also create positive externalities that emerge from the accumulation of human capital and also from the transmission of technical knowledge.
India’s competitiveness in these efficiency enhancers:
According to the recent Global competitiveness report India has improved in its scores among three main pillars of competitiveness that includes infrastructure which has improved by two ranks ranking 66th among the 140 countries; in higher education and training by 6 ranks standing at 75th among the 140 countries and also technological readiness up by three ranks Standing at 107th rank among 140 countries (Bhaskar, 2017). The improvements in this pillars reflect the recent public investments in the efficiency enhancers.
India's competitiveness across the various years is being powered by giant market size, as an asset is the third largest Market in the world after China and US according to the report. The market size of the country is being credited as its major asset and India also ranks best among the top 10 countries in its shareholder governance, GDP per capita, quality of research institutions and also airport connectivity according to the GCI report.
Comparing India’s competitiveness with three other countries United Indicators
India
Kingdom
China
HongKong
Rank/1
Scor
Rank/1
Scor
Rank/1
Scor
Rank/1
Scor
37
es
37
es
37
es
37
es
Report
40
4.6
8
5.5
27
5
6
5.5
Basic Requirements
63
4.7
23
5.6
31
5.3
3
6.3
Efficiency Enhancers
42
4.5
5
5.6
28
4.9
4
5.6
30
4.3
9
5.3
29
4.3
18
5
Global
Competitiveness
Innovation sophistication factors
and
Comparing India with three other countries namely United Kingdom, China and Hong Kong, we can see that India has ranked 40th among the 137 countries and United Kingdom has ranked 8th among the 137 countries. China has ranked 27th and Hong Kong as a rank of 6th among the 137 countries. The maximum score that can be taken by the countries in the various indicators is 7 and among the four countries, the score for global competitiveness index is above or equal to 5 out of 7 for the other countries namely UK, China and Hong Kong while India scores behind with 4.6 out of 7(Schwab, 2018).
With regard to basic requirements indicator India ranks 63 out of 137 countries while UK ranks 23 out of the 137 countries with a score of 5.6, China ranks 31st out of the 137 countries with a score of 5.3 and Hong Kong ranks third out of the 137 countries with a score of 6.3. with regard
to the efficiency enhancers, among the four countries India ranks 42nd out of the 137 countries with the score of 4.5 followed by China which ranks 28th with the score of 4.9, UK ranks 5th out of the 137 countries with a score of 5.6 out of 7 and Hong Kong ranks 4th among the 137 countries with a score of 5.6 again. With regard to the innovation and sophistication factors India ranks 30th out of the 137 countries with the score of 4.3, China ranks 29th the score of 4.3; both India and China have the same score with regard to the animation and sophistication factors. UK ranks 9th in this factor with a score of 5.3 while Hong Kong ranks 18th out of the 137 countries with a score of 5 out of 7.
Indicators
India
United Kingdom
China
Hong Kong
Rank/137 Scores Rank/137 Scores Rank/137 Scores Rank/137 Scores Efficiency Enhancers
42
4.5
5
5.6
28
4.9
4
5.6
Training
75
4.3
20
5.5
47
4.8
14
5.7
Goods market efficiency
56
4.5
10
5.3
46
4.5
2
5.7
Labour market efficiency
75
4.1
6
5.4
38
4.5
4
5.6
development
42
4.4
13
5
48
4.2
5
5.5
Technological Readiness
107
3.1
4
6.3
73
4.2
9
6.2
Market Size
3
6.4
7
5.8
1
7
33
4.8
Higher
Education
Financial
and
market
Efficiency Enhancers 8 7 6 5 4 3 2 1 0
India UK China HongKong
Comparing India’s competitiveness in Efficiency Enhancers Among the four countries, for the three efficiency enhancers which we discussed above, India ranks 75th, among the 137 countries with a score of 4.3. China ranks 47th out of the 137 countries with score of 4.8; while UK and Hong Kong has a better score of more than 5.5 and have the ranks 20th for UK and 14th for Hong Kong. This shows that Hong Kong and UK are better equipped higher education and Technical training which is vital for the economic development and global competitiveness for an economy (Naqvi, 2016).
With regard to the technological readiness, India ranks 107 out of the 137 countries with a score of just 3.1; while China ranks 73rd out of the 137 countries with a score of 4.2. Even in this indicator both UK and Hong Kong has a score of more than 6.2 ranks of 4th for UK and 9th for Hong Kong in the technological readiness index(Schwab, 2018).
With regard to the market size China stands first among the 137 countries with the score of 7 out of 7 and India ranks the third out of the 137 countries with 6.4 as the score. UK ranks VII out of the 137 countries with the score of 5.8 followed by Hong Kong ranking 33rd with a score of 4.8.
Summary and conclusion: We have considered 3 efficiency enhancers in this task namely higher education and training, technological readiness of the economy and also the market size. With regard to each of the pillars in the Global competitiveness index the following points needs to be noted and has to be worked upon for boosting the competitiveness of the country among the 137 countries. with regard to the institutions India has to improve upon the reduction in the corruption rates as investors still think that political instability and corruption as the major factors that hinder International businesses. with regard to the infrastructure, India still has to work upon the overall infrastructure and the quality of electricity supply throughout the country. with regard to macroeconomic environment, that should be balanced budget and the government Debt must be brought down to make the environment conducive.with regard to the health and primary education India should improve in the infant mortality rate and life expectancy and also worked on the basic education and well-being and health of individuals that pose obstacles to the development of businesses.
with regard to education and training then you should be
improvements on the Internet access in schools and better skill training facilities for the workforce. In the goods market efficiency imports as the percentage of GDP as to be improved and the number of procedures and days that are required to start a business should be brought down. With regard to the labour market efficiency the strict labor regulations and poor work ethics has to be handled efficiently in order to make it conducive for international businesses. The ranking in the financial market development has also to be improved as it is a major contributor for doing business in India. Technological readiness as we have discussed in the above sections given as India has the large proportion of IT champions still lagging behind in the technological readiness as it ranks 107 among the 137 countries. The one indicator which is strength or an asset for the Global competitiveness for India is its market size as it has got a huge market base that is inclusive of both foreign and domestic markets. Business sophistication and innovations can lead to specialization and productivity gains and these two indicators indicate increasing trend for India. India has been moving from a factor driven economy to the second stage of efficiency enhancers’ economy though it has to improve in both of these indicators and the relevant pillars in these indicators to move up on the ladder in the Global competitiveness index.
References: Bazargan, A., Ghasemi, R., Ardebili, M. E., & Zarei, M. (2017). The Relationship Between “Higher Education and Training” and “Business Sophistication.” Econ. Rev (Vol. 21). Retrieved from https://ier.ut.ac.ir/article_62106_f3b653dc00c42bc9e407082457b26845.pdf Bhaskar, U. (2017). India improves on WEF’s global competitiveness rankings - Livemint. Retrieved November 24, 2018, from https://www.livemint.com/Politics/QdQ4zRhlA2GRT0pNSWktiN/India-improves-onWEFs-global-competitiveness-rankings.html Duraisamy, S., & Nedunchezhian, V. R. (2015). A Study on the Impact of Technological Readiness on Global Competitiveness Index. International Journal of Engineering and Management Research Page Number, (4), 18–26. Retrieved from www.ijemr.net Naqvi, R. (2016). GLOBAL COMPETITIVENESS AND INDIA : In International Conference on Recent Innovations in sciences, management, education and technology. Saunders, J., & Charles, B. (1985). Higher Education and Economic Revitalization. Management Review, 74(4), 14. https://doi.org/10.1111/j.1467-9701.2010.01304.x Schwab, K. (2018). The global competitiveness report 2016-17. World Economic Forum (Vol. 5). https://doi.org/92-95044-35-5 WEF-GCI. (2018). Market Size. Retrieved November 24, 2018, from http://reports.weforum.org/global-competitiveness-report-2015-2016/market-size/
India’s Global Competitiveness Index A comparison with UK, China and Hongkong Student Name 11/24/2018
Table of Contents: Introduction ................................................................................................................................................... 2 Description of the 3 efficiency enhancers: .................................................................................................... 2 Higher education and training in the competitiveness index ........................................................................ 3 Technological readiness and global competitiveness index: ........................................................................ 3 Market size and global competitiveness index.............................................................................................. 4 India’s competitiveness in these efficiency enhancers: ................................................................................ 4 Comparing India’s competitiveness with three other countries .................................................................... 5 Comparing India’s competitiveness in Efficiency Enhancers ...................................................................... 7 Summary and conclusion: ............................................................................................................................. 8 References:.................................................................................................................................................... 9
Introduction In this task, we are going to analyze the 3 efficiency enhances in the Global competitiveness index for India and compare it with other countries namely the UK, China and Hong Kong. The 6 efficiency enhancers listed in the Global competitiveness report include the higher education and training, goods market efficiency, labor market efficiency, Financial market development, technological readiness and market size. For this task, the three efficiency enhancer that have been taken include the higher education and training, technological readiness and the market size.
Description of the 3 efficiency enhancers: Though all the 6 efficiency enhancers are considered to be important for Helping in the business Development of international businesses, it is important for the country to have higher education and training for its labor force to participate in the international business environment(Saunders & Charles, 1985). It is also necessary to have technological readiness in order to keep in par with the other countries.
Similarly the market size of the country is also crucial for the
development of market share for both local businesses and global businesses. Hence we have taken these three indicators and have elaborated about the three indicators and the rank with India holds in the three indicators. Higher level of education and training of technical skills are very important for the growth of economy. India has the second largest populated country in the world, it is essential to train the labour force even if the literacy rate is growing over the years. It has been empirically proved that successful Nations which invest more in higher education and training in skill development would move up in the ladder of global competitiveness (Bazargan, Ghasemi, Ardebili, & Zarei, 2017). The growth of internet technologies and cloud computing, and various other computer systems like the enterprise resource planning systems, technological readiness would ensure quality and quantity of the production processes in any country.
Similarly large markets with increasing incomes allow faster growth rates as the aggregate demand for both local commodities and imported goods will increase with increasing incomes as the consumption component of the aggregate demand increases(WEF-GCI, 2018).
Higher education and training in the competitiveness index Global competitiveness index report provides the rankings based on several pillars of economic development and the stages of development begins with the stage of least development which are factor driven, efficiency driven in the second stage and innovation driven in the advanced stage. As the countries in the stage of factor driven moving to the stage of efficiency driven, it becomes necessary to have higher education and training(Bazargan et al., 2017). Countries which are in the least development stage gain competitive advantage based on the natural resources and unskilled labour. At this stage the most important factors that are important include the institutions, infrastructure macroeconomics framework and primary education. However moving into an efficiency driven economy necessitates the economies like India and China to have quality and accessible higher education institutions, efficient labour Markets and commodity markets and the ability of the economy to use Technology efficiently and effectively. Hence it becomes necessary for the Indian economy to develop their workers skills in order to create and use the technological innovations that are necessary for the economy to reach a highest state of development(Saunders & Charles, 1985).
Technological readiness and global competitiveness index: With the intensity of globalization and expansion of international businesses, technological advancement of the economy is the primary requirement in order to compete and sustain in the world market. when we look at the technological innovation and readiness of India, developments in information and Communications Technology has been playing a major role and as penetrated into all industrial sectors that has led to the better results of the economy(Duraisamy & Nedunchezhian, 2015). Technological readiness can otherwise be known as the level of Technical capability of the country and is calculated based on two things namely technological adoption and ICT usage. India being a developing country has its own
constraints but still has made increase progress in the area of ICT and has made significant contributions to the world.
Market size and global competitiveness index In the case of closed economies the market size of an economy would have coincided with its domestic markets. However in a globalized scenario, the countries market will not coincide with its political borders but would include combination of domestic market and foreign market. Market size of an economy according to the GCI, affects the productivity through two ways namely economies of scale and it provide incentives for innovation. Market size allowed for efficiency gains by allowing specialization as identified by Adam Smith and this enables the large markets to take advantage of economies of scale(WEF-GCI, 2018). similarly in the presence of larger markets companies have bigger incentives for generating innovative and new ideas as the largest Rock of resources in the large market increases the possibility of finding new ways to capitalize on the resources as more profits can be made when new ideas are sold in larger markets. Large market size can also create positive externalities that emerge from the accumulation of human capital and also from the transmission of technical knowledge.
India’s competitiveness in these efficiency enhancers:
According to the recent Global competitiveness report India has improved in its scores among three main pillars of competitiveness that includes infrastructure which has improved by two ranks ranking 66th among the 140 countries; in higher education and training by 6 ranks standing at 75th among the 140 countries and also technological readiness up by three ranks Standing at 107th rank among 140 countries (Bhaskar, 2017). The improvements in this pillars reflect the recent public investments in the efficiency enhancers.
India's competitiveness across the various years is being powered by giant market size, as an asset is the third largest Market in the world after China and US according to the report. The market size of the country is being credited as its major asset and India also ranks best among the top 10 countries in its shareholder governance, GDP per capita, quality of research institutions and also airport connectivity according to the GCI report.
Comparing India’s competitiveness with three other countries United Indicators
India
Kingdom
China
HongKong
Rank/1
Scor
Rank/1
Scor
Rank/1
Scor
Rank/1
Scor
37
es
37
es
37
es
37
es
Report
40
4.6
8
5.5
27
5
6
5.5
Basic Requirements
63
4.7
23
5.6
31
5.3
3
6.3
Efficiency Enhancers
42
4.5
5
5.6
28
4.9
4
5.6
30
4.3
9
5.3
29
4.3
18
5
Global
Competitiveness
Innovation sophistication factors
and
Comparing India with three other countries namely United Kingdom, China and Hong Kong, we can see that India has ranked 40th among the 137 countries and United Kingdom has ranked 8th among the 137 countries. China has ranked 27th and Hong Kong as a rank of 6th among the 137 countries. The maximum score that can be taken by the countries in the various indicators is 7 and among the four countries, the score for global competitiveness index is above or equal to 5 out of 7 for the other countries namely UK, China and Hong Kong while India scores behind with 4.6 out of 7(Schwab, 2018).
With regard to basic requirements indicator India ranks 63 out of 137 countries while UK ranks 23 out of the 137 countries with a score of 5.6, China ranks 31st out of the 137 countries with a score of 5.3 and Hong Kong ranks third out of the 137 countries with a score of 6.3. with regard
to the efficiency enhancers, among the four countries India ranks 42nd out of the 137 countries with the score of 4.5 followed by China which ranks 28th with the score of 4.9, UK ranks 5th out of the 137 countries with a score of 5.6 out of 7 and Hong Kong ranks 4th among the 137 countries with a score of 5.6 again. With regard to the innovation and sophistication factors India ranks 30th out of the 137 countries with the score of 4.3, China ranks 29th the score of 4.3; both India and China have the same score with regard to the animation and sophistication factors. UK ranks 9th in this factor with a score of 5.3 while Hong Kong ranks 18th out of the 137 countries with a score of 5 out of 7.
Indicators
India
United Kingdom
China
Hong Kong
Rank/137 Scores Rank/137 Scores Rank/137 Scores Rank/137 Scores Efficiency Enhancers
42
4.5
5
5.6
28
4.9
4
5.6
Training
75
4.3
20
5.5
47
4.8
14
5.7
Goods market efficiency
56
4.5
10
5.3
46
4.5
2
5.7
Labour market efficiency
75
4.1
6
5.4
38
4.5
4
5.6
development
42
4.4
13
5
48
4.2
5
5.5
Technological Readiness
107
3.1
4
6.3
73
4.2
9
6.2
Market Size
3
6.4
7
5.8
1
7
33
4.8
Higher
Education
Financial
and
market
Efficiency Enhancers 8 7 6 5 4 3 2 1 0
India UK China HongKong
Comparing India’s competitiveness in Efficiency Enhancers Among the four countries, for the three efficiency enhancers which we discussed above, India ranks 75th, among the 137 countries with a score of 4.3. China ranks 47th out of the 137 countries with score of 4.8; while UK and Hong Kong has a better score of more than 5.5 and have the ranks 20th for UK and 14th for Hong Kong. This shows that Hong Kong and UK are better equipped higher education and Technical training which is vital for the economic development and global competitiveness for an economy (Naqvi, 2016).
With regard to the technological readiness, India ranks 107 out of the 137 countries with a score of just 3.1; while China ranks 73rd out of the 137 countries with a score of 4.2. Even in this indicator both UK and Hong Kong has a score of more than 6.2 ranks of 4th for UK and 9th for Hong Kong in the technological readiness index(Schwab, 2018).
With regard to the market size China stands first among the 137 countries with the score of 7 out of 7 and India ranks the third out of the 137 countries with 6.4 as the score. UK ranks VII out of the 137 countries with the score of 5.8 followed by Hong Kong ranking 33rd with a score of 4.8.
Summary and conclusion: We have considered 3 efficiency enhancers in this task namely higher education and training, technological readiness of the economy and also the market size. With regard to each of the pillars in the Global competitiveness index the following points needs to be noted and has to be worked upon for boosting the competitiveness of the country among the 137 countries. with regard to the institutions India has to improve upon the reduction in the corruption rates as investors still think that political instability and corruption as the major factors that hinder International businesses. with regard to the infrastructure, India still has to work upon the overall infrastructure and the quality of electricity supply throughout the country. with regard to macroeconomic environment, that should be balanced budget and the government Debt must be brought down to make the environment conducive.with regard to the health and primary education India should improve in the infant mortality rate and life expectancy and also worked on the basic education and well-being and health of individuals that pose obstacles to the development of businesses.
with regard to education and training then you should be
improvements on the Internet access in schools and better skill training facilities for the workforce. In the goods market efficiency imports as the percentage of GDP as to be improved and the number of procedures and days that are required to start a business should be brought down. With regard to the labour market efficiency the strict labor regulations and poor work ethics has to be handled efficiently in order to make it conducive for international businesses. The ranking in the financial market development has also to be improved as it is a major contributor for doing business in India. Technological readiness as we have discussed in the above sections given as India has the large proportion of IT champions still lagging behind in the technological readiness as it ranks 107 among the 137 countries. The one indicator which is strength or an asset for the Global competitiveness for India is its market size as it has got a huge market base that is inclusive of both foreign and domestic markets. Business sophistication and innovations can lead to specialization and productivity gains and these two indicators indicate increasing trend for India. India has been moving from a factor driven economy to the second stage of efficiency enhancers’ economy though it has to improve in both of these indicators and the relevant pillars in these indicators to move up on the ladder in the Global competitiveness index.
References: Bazargan, A., Ghasemi, R., Ardebili, M. E., & Zarei, M. (2017). The Relationship Between “Higher Education and Training” and “Business Sophistication.” Econ. Rev (Vol. 21). Retrieved from https://ier.ut.ac.ir/article_62106_f3b653dc00c42bc9e407082457b26845.pdf Bhaskar, U. (2017). India improves on WEF’s global competitiveness rankings - Livemint. Retrieved November 24, 2018, from https://www.livemint.com/Politics/QdQ4zRhlA2GRT0pNSWktiN/India-improves-onWEFs-global-competitiveness-rankings.html Duraisamy, S., & Nedunchezhian, V. R. (2015). A Study on the Impact of Technological Readiness on Global Competitiveness Index. International Journal of Engineering and Management Research Page Number, (4), 18–26. Retrieved from www.ijemr.net Naqvi, R. (2016). GLOBAL COMPETITIVENESS AND INDIA : In International Conference on Recent Innovations in sciences, management, education and technology. Saunders, J., & Charles, B. (1985). Higher Education and Economic Revitalization. Management Review, 74(4), 14. https://doi.org/10.1111/j.1467-9701.2010.01304.x Schwab, K. (2018). The global competitiveness report 2016-17. World Economic Forum (Vol. 5). https://doi.org/92-95044-35-5 WEF-GCI. (2018). Market Size. Retrieved November 24, 2018, from http://reports.weforum.org/global-competitiveness-report-2015-2016/market-size/
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