Measuring Competitiveness: The case of Hungary Christos Cabolis Chief Economist, IMD World Competitiveness Center

Transcription

1 Measuring Competitiveness: The case of Hungary Christos Cabolis Chief Economist, IMD World Competitiveness Center IMD World Competitiveness Center

2 IMD Definition of Competitiveness the ability of a country to facilitate an environment in which enterprises can generate sustainable value, sustainable value creation is the long term capacity of enterprises to remain profitable, create fulfilling jobs, while minimizing the environmental impact of their activities

3 Competitiveness Ranking 2017 Top 10 (overall) and Top 5 per factor Economic Performance Government Efficiency Business Efficiency Infrastructure Overall

4 The Competitiveness Puzzle: Where does Growth Come From? GDP per Capita Growth 2013 COMPETITIVENESS AND ECONOMIC GROWTH 2,40 2,20 2,00 1,80 1,60 1,40 1,20 1,00 Top 10 Top 30 Bottom 30 Bottom 10 IMD WORLD COMPETITIVENESS RANKINGS 2012 Most Competitive Economies Outperform Less Competitive ones by about 0.6% per year!!!

5 The Competitiveness Puzzle: Competitiveness, Growth, & Profitability Stock Market Return COMPETITIVENESS AND STOCK MARKET RETURNS Top 10 Top 30 Bottom 30 Bottom 10 IMD WORLD COMPETITIVENESS RANKINGS 2012 Most Competitive Economies Outperform Less Competitive ones by about 19% per year!!!

6 GDP Growth and Transparency Survey Question Transparency is a key driver of competitiveness

7 Competitiveness and Openness Openness is correlated with competitiveness. We argue it is a key driver.

8 Competitiveness Breakdown Hungary: Methodology / Overall Ranking 342 Criteria 20 Sub-Factors 4 Factors Overall Ranking 2/3s Statistics Competitiveness that can be measured! The emphasis on HARD FACTS ensures objectivity and transparency 1/3 Survey Domestic Economy International Trade International Investment Employment Prices Public Finance Tax Policy Institutional Framework Business Legislation Societal Framework Productivity Labor Market Finance Management Practices Attitudes and Values Economic Performance Government Efficiency Business Efficiency 36th 54th 60th OVERALL RANKING 52nd Out of 63 Competitiveness as it is perceived! Over 6,000 respondents Basic Technological Scientific Health & Environment Education Infrastructure 41st

9 Competitiveness Landscape: Hungary 2016 & 2017 Domestic Economy International Trade International Investment Employment Prices Public Finance Fiscal Policy Institutional Framework Business Legislation Societal Framework Productivity & Efficiency Labor Market Finance Management Practices Attitudes and Values Basic Infrastructure Technological Infrastructure Scientific Infrastructure Health and Environment Education Hungary Hungary Overall Hungary Hungary Hungary Hungary Hungary Hungary Hungary Hungary Economic Performance Government Efficiency Business Efficiency Infrastructure

10 Overall and Factor Rankings Hungary:

11 What makes Hungary competitive? Executive Perceptions ( ) From a list of 15 indicators, respondents of the Executive Opinion Survey select the five that they perceived as the key attractiveness factors of their economy. The chart shows the percentage of responses for the top choices over three years. 77% 65% 60% Skilled workforce Effective labor relations Cost competitiveness Reliable infrastructure High educational level 47% 47% 45% 40% 40% 35% 32%

12 Management Practices Strengths and weaknesses Entrepreneurship [Sur vey] Auditing and accounting practices [Sur vey] Use of big data and analytics [Sur vey] Changing market conditions [Sur vey] Credibility of managers [Sur vey] Social responsibility [Sur vey] of managers is widespread in business are adequately implemented in business by companies to support decision- making Companies are generally aware of in society is strong of business leaders is high

13 Management Practices Strengths and weaknesses Entrepreneurship [Sur vey] Auditing and accounting practices [Sur vey] Use of big data and analytics [Sur vey] Changing market conditions [Sur vey] Credibility of managers [Sur vey] Social responsibility [Sur vey] of managers is widespread in business are adequately implemented in business by companies to support decision- making Companies are generally aware of in society is strong of business leaders is high Czech Republic Hungary Poland Romania Slovak Republic

14 International Trade Strengths and weaknesses Export of goods - growth rate Trade to GDP ratio Balance of commercial services Import of goods and commercial services Exports of commercial services - growth rate Exchange rates [Sur vey] % change base on US$ values (Export + Import) / (2*GDP) % of GDP % of GDP % change base on US$ values support the competitiveness of enterprises

15 International Trade Strengths and weaknesses Export of goods - growth rate Trade to GDP ratio Balance of commercial services Import of goods and commercial services Exports of commercial services - growth rate Exchange rates [Survey] % change base on US$ values (Export + Import) / (2*GDP) % of GDP % of GDP % change base on US$ values support the competitiveness of enterprises Czech Republic Hungary Poland Romania Slovak Republic

16 Scientific Infrastructure Strengths and weaknesses Business expenditure on R&D Total R&D personnel in business Value added of KTI industries Innovative capacity [Survey] Science degrees Knowledge transfer [Survey] % of GDP Full-time workers per 1000 people % of GDP Innovative capacity of firms is high % university degrees in science and engineering between companies and university is developed

17 Scientific Infrastructure Strengths and weaknesses Business expenditure on R&D Total R&D personnel in business Value added of KTI industries Innovative capacity [Survey] Science degrees Knowledge transfer [Survey] % of GDP Full-time workers per 1000 people % of GDP Innovative capacity of firms is high % university degrees in science and engineering between companies and university is developed Czech Republic Hungary Poland Romania Slovak Republic

18 Business Competitiveness Talent Governance Innovation Growth Champions display significantly better governance metrics than Non-Growth Champions Coping with the challenges today requires a focus on talent, according to Growth Champions Growth Champions innovate more and better

19 Science & Technology innovation and Competitiveness Relation between Competitiveness and Scientific Infrastructure Competitiveness analyses how countries or enterprises manage the totality of their competencies to achieve long-term value creation y = x Relation between Competitiveness and Technological Infrastructure y = x The innovative capacity of a country or region is heavily rooted in areas such as the intensity of scientists and engineers in the workforce, the degree of protection of intellectual property, and the depth of clusters The Scientific and Technological Infrastructure sub-factors provide a proxy for S&T Innovation. However, the S&T sub-factors are not able to capture all the innovative and technological aspects affecting competitiveness

20 World Digital Competitiveness Ranking: Definition Knowledge: the infrastructure that underlines the process of discovery, understanding and learning of new digital technologies. Technology: the overall context through which the development of digital technologies is enabled. Future Readiness: the level of preparedness of an economy to assume its digital transformation. The IMD World Digital Competitiveness Ranking assesses the capacity of an economy to adopt and explore digital technologies leading to transformation in government practices, business models and society in general.

21 Digital Competitiveness Ranking 2017 Top 10 (overall) and Top 5 per factor Knowledge Technology Future readiness Overall

22 World Digital Competitiveness Ranking: Structure

23 World Digital Competitiveness Ranking: Hungary

24 World Digital Competitiveness ranking Hungary: Knowledge KNOWLEDGE u Overall top strengths w Overall top weaknesses Subfactors Talent Training & education Scientific concentration Talent Rank Training & education Rank Scientific concentration Rank Educational assessment PISA - Math 34 Employee training 56 Total expenditure on R&D (%) 27 International experience 40 Total public expenditure on education 33 Total R&D personnel per capita 32 Foreign highly-skilled personnel 56 Higher education achievement 38 Female researchers 37 Management of cities 47 Pupil-teacher ratio (tertiary education) 29 R&D productivity by publication 44 w Digital/Technological skills 61 Graduates in Sciences 43 Scientific and technical employment 33 u Net flow of international students 19 u Women with degrees 11 High-tech patent grants 35

25 World Digital Competitiveness ranking Hungary: Technology TECHNOLOGY u Overall top strengths w Overall top weaknesses Subfactors Regulatory framework Capital Technological framework Regulatory framework Rank Capital Rank Technological framework Rank Starting a business 39 IT & media stock market capitalization 30 Communications technology 47 u Enforcing contracts 8 Funding for technological development 45 Mobile Broadband subscribers 49 Immigration laws 28 Banking and financial services 51 w Wireless broadband 59 Technological regulation 43 Investment risk 53 Internet users 35 Scientific research legislation 33 Venture capital 48 Internet bandwidth speed 26 Intellectual property rights 35 u Investment in Telecommunications 15 High-tech exports (%) 27

26 World Digital Competitiveness ranking Hungary: Future readiness FUTURE READINESS u Overall top strengths w Overall top weaknesses Subfactors Adaptive attitudes Business agility IT integration Adaptive attitudes Rank Business agility Rank IT integration Rank w E-Participation 58 w Opportunities and threats 61 E-Government 39 Internet retailing 35 Innovative firms 39 Public-private partnerships 47 Tablet possession 51 Agility of companies 57 Cyber security 52 u Smartphone possession 23 Use of big data and analytics 51 Sofware piracy 27 w Attitudes toward globalization 63 Knowledge transfer 41

27 World Digital Competitiveness ranking Hungary: Factors trends

28 World Digital Competitiveness Ranking Hungary: Digital Competitiveness performances

29 More Information? IMD IMD World Competitiveness Center