Poland Slips in the Global Competitiveness Report
Poland has slipped by two places, i.e. to 41st position in the “Global Competitiveness Report 2011-2012” drawn up by the World Economic Forum (WEF) in cooperation with, among others, the National Bank of Poland. Switzerland continues to top the GCI (Global Competitiveness Index), closely followed by Singapore and Sweden. The USA posts a weaker competitiveness record for the third consecutive year and ranks 5th.
Poland’s fall in the ranks is the effect of deterioration in terms of macroeconomic stability and innovation. At the same time, the Polish economy scored better on institutions and the size of the market. While Spain and Puerto Rico got ahead of Poland in this edition of the survey, on the whole the country moved up by 12 positions in the years 2008-2011.
The most serious challenge faced by the Polish economy on the path to better competitiveness is boosting innovation, which is currently relatively poor compared to efficiency and the so-called basic requirements. According to the businesses surveyed, the biggest stumbling block to development is complexity and lack of transparency of the tax system. Entrepreneurs also complain of the prevailing red tape and a rigid labour market, limited access to funding and bad infrastructure.
On the global scale, notwithstanding the crisis, countries are increasingly competing to be competitive. The GCI has risen across the board, also with respect to the countries ranking the lowest. However, amongst the 20 most competitive economies, 11 are still European ones, with Switzerland in the lead position. Singapore has risen to the second position, squeezing Sweden out to the third.
For the third consecutive year, the competitiveness of the world’s biggest economy, the United States, has deteriorated; the country now ranks 5th. There was a marked drop in the position of Japan (9th). On the other hand, Finland has moved up by as many as 3 ranks (currently 4th), which indicates a continued prominent role of Scandinavian countries in Europe.
The Global Competitiveness Report is drawn up on an annual basis by the World Economic Forum. This year’s survey comprised 142 countries and 12 thousand businesses from all over the world. The survey is based on an extensive questionnaire addressed at company managements (the so-called Top 5). In Poland, the NBP cooperated with 200 businesses in the conduct of the survey.
The WEF method to study competitiveness assumes 12 competitiveness pillars divided into 3 groups corresponding with three stages of economy development. In the first stage, when development is driven by factors of production, competitiveness is assessed in terms of: institutions, infrastructure, macroeconomic environment, health and primary education. In the second stage, which is characterised by enhanced efficiency, the study looks at higher education, labour market efficiency and flexibility, financial market development, technological readiness and market size. In the third stage when development is driven by innovation the country’s economy is assessed by studying business sophistication and innovation factors .
Many years experience proves this assessment method to be accurate in terms of its correlation with GDP per capita growth. The survey is of particular relevance to central banks as it helps to better assess and forecast the potential of the economy, capital flows, the flexibility of the economy along with the capacity for shock absorption and the impact of cost pressure. Download the Report at the World Economic Forum website