A Study on the Impact of Technological Readiness on Global Competitiveness Index
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1 Volume-5, Issue-4, August-2015 International Journal of Engineering and Management Research Page Number: A Study on the Impact of Readiness on Global Competitiveness Index Sivaraam Duraisamy 1, Dr. V. R Nedunchezhian 2 1 ResearchScholar, Karpagam University, Coimbatore, INDIA 2 Professor, KCT Business School, Coimbatore, INDIA ABSTRACT In the globalized world, technological advancement is the primary need to compete with others to sustain in the market and making the nation pride to march towards the betterment. Now when we look into technological innovation, ICT is playing a major role which penetrated in almost all the industrial sectors and leading to better results. The countries competency is also identified based on its Global competitiveness index. Global competitiveness index is calculated based on twelve parameters categorized under three headings namely Business Requirements, Efficiency Requirements and factors. As both technological readiness and the Global competitiveness index are helping to evaluate the status of countries, there should be some relationship between these two. Five years data on the technological readiness and the competitiveness index is taken for the study. Random samples are taken from the countries showing improvement, countries with declining results, and countries which exists at the same level are taken and the analysis is done. It is found that there is a strong positive correlation between Global competitiveness ranking and Technical readiness ranking. Keywords---- Readiness, Global Competitiveness Index, Global ranking 1. I. INTRODUCTION India is a growing country. India has the 2nd largest population in the world. India is playing a significant role in ICT Industry. Indians are playing key roles throughout the globe. The Global competitiveness report shows that India is showing a negative growth in getting the ranks. It seems that other countries are growing faster than India. This paper analyzes the relationship between the readiness and the Global ranking on the global competitiveness index of selected countries. The report helps the stakeholders in understanding the relationship between the technological readiness and the Global competitiveness ranking and the way to achieve better ranking through improving technological readiness. II. OBJECTIVE Once in a year World Economic Forum is publishing a report on the competitiveness measured in terms of competitiveness score and ranking. The trend shows that India is scoring lower and lower ranks year by year. readiness is one of the parameter considered to calculate the Global competitiveness ranking. As a growing country, India depends on foreign direct investment. Global competitiveness rank is one of the key parameter considered by the investors. The objective of the study is to know the relationship between readiness and the Global Competitiveness ranking, so that the findings will help the stakeholders to take the decision on the level of importance given for the countries readiness to improve its ranking based on Global competitiveness index. III. LITERATURE REVIEW Rohollah Ghasemi (2013), in his paper Relationship between Infrastructure and Readiness which are considered as parameters for calculating the Global Competitiveness and ranking, says that there is a meaning full relationship exists between these two parameters and also a positive effect seen on each other. IV. DISCUSSION Global Competitiveness Index and ing helps the foreign investors to decide about their investment in other countries. Competitiveness Index and ing are important influencing factors of foreign direct investment. Global Competitiveness Index is calculated based on twelve parameters classified under three headings. Institutions, Infrastructure, Macroeconomic 18 Copyright Vandana Publications. All Rights Reserved.
2 environments and Health and primary education are listed under the heading of Basic requirements. Human education and training, Goods market efficiency, Labor market efficiency, financial market development, readiness Market sizes are grouped under the heading Efficiency enhancers. Business and innovation are categorized under the heading. readiness is the parameter used to know the level of Technical capability of the country. readiness is calculated based on two headings, adoption and ICT use. Readiness is calculated based on the Availability of latest techniques, Firm-level technology adoption and FDI and Technology transfer. ICT use is calculated based on Internet users, Broadband Internet Subscriptions, Internet bandwidth, Mobile broadband subscriptions, Mobile telephone subscriptions, and Fixed telephone lines. Data are taken from The Global Competitiveness Reports published by World Economic Forum and World Development Indicators. Samples are selected randomly such that two countries which made a significant improvement in scoring Global Competitiveness, two countries which lost their ranking and two countries hold their ranking in the same level. Along with India is also considered. Because of globalization, the reachability to latest technologies became easier. At the same time the competition also increasing continuously. Customers expectations are also increasing. So it becomes mandatory to adopt newer technologies to improve production, quality and make the products at competitive rates. INDIA India being the growing country has its own limitations, still in the area of ICT, India makes a significant contribution to the world. Indians use their skillset and playing key roles in many of the institutions, governmental organizations throughout the world. Table 1 - India Year wise GCI and ing GC GC 71/144 60/148 58/144 56/142 51/139 49/ Efficiency Enhancers Efficiency Enhancers factors factors The above shown Table 1 shows the Global competitiveness score I remains same from to and in it has come down by 0.1 from 4.3 to 4.2. But in the ranking, huge difference is seen, ranking came from 49 to 71. readiness is grouped under the heading Efficiency enhancers. The score has come down from 4.5 to 4.2 and the ranking come down from 35 to 65. At the time of calculating the GCI, Basic requirement is given 60% of the weightage and Efficiency enhancers is given 35% weightage and the remaining 5% is given to factors. So the impact of decrease happened in the Efficiency enhancers and factors are less impact on the calculated GC score. Still rank of India is declining. Table 2- India - Year wise Readiness and ing Readiness Index Readiness GCI GCI Copyright Vandana Publications. All Rights Reserved.
3 Figure 3 Correlation between India Index ing and Global Competitiveness to Table 2 India - Year wise Readiness Index and ing and Fig 3 Correlation between India Index ing and Global Competitiveness shows that there is a strong correlation between both the rankings. The correlation index is calculated as shows a strong correlation between both the indices. SWITZERLAND Switzerland is the one which is retaining its rank as 1 for a longer period. The innovation and capability helps the country to reach and retains it rank. Table 3 - Switzerland - Year wise GCI and ing GCI GCI Efficiency Enhancers Efficiency Enhancers factors factors Table 3 shows the GCI improved from 5.6 to 5.7 during the period and retaining the rank 1 since When we look into the other indexes, the score improved from 6.0 to 6.2. Efficiency enhancers score maintained between 5.4 and 5.5, but the ranking came down from 3 to 5. In factors area again the score is maintained between 5.7 and 5.8, the rank is improved from 3 to 1 Table 4 - Switzerland - Year wise Readiness ing Readiness Index Copyright Vandana Publications. All Rights Reserved.
4 Readiness GCI GCI Table 4 shows CGI rank is constant whereas the Readiness rank is decreasing. In this case CGI rank is 1, so it cannot be improved further. Readiness Index varies between 5.6 to 6.3. The correlation, between the Readiness Index and is For the past six consecutive years Switzerland retains the first place. It is strong in factors scoring 1st place. PHILIPPINES Philippines is a country which is a fast growing in the GCI ranking ladder. Table 5 - Philippines Year wise GCI and ing GCI GCI Efficiency Enhancers Efficiency Enhancers factors factors Table 5 shows that the GCI has improved from 3.9 to4.4during the period to resulting an improvement in the ranking from 87th to 52nd. It is a good achievement. The improvement in the score is seen in all the three headings. When we look into the other indexes, the score is improved from 3.9 to 4.6. Efficiency enhancers score improved from 3.9 to 4.3. In factors area again the score is improved from 3.4 to 3.9. Table 6 - Philippines Year wise GCI and Readiness Readiness Index Readiness GCI GCI Copyright Vandana Publications. All Rights Reserved.
5 Table 6shows a positive correlation of between the readiness ranking and the Global competitiveness ranking. TAJIKISTAN It is a small country with million populations. More than 50% of the revenue is generated by service sectors and manufacturing industry. Agriculture contributes the rest of the revenue. It also made a remarkable positive movement in the GCI ranking from 122 to 9 Table 7 - Tajikistan - Year wise GCI and ing GCI 3.9 NA GCI 91 NA NA NA Efficiency Enhancers 3.5 NA Efficiency Enhancers 111 NA Innovation and factors 3.5 NA Innovation and 81 NA factors Table 7 shows that the GCI is improved from 3.4 to 3.9 during the period to which resulted in a positive movement of ranking from 122 nd to 91 st rank. It is a significant achievement made by Philippines. The improvement in the score is seen in all the three headings. The score improved from 3.5 to 4.2. Efficiency enhancer s score improved from 3.2 to 3.5. In factors area also there is an improvement in the score from 3.1 to 3.5. Table 8 Tajikistan Year wise GCI and Readiness Readiness Index Readiness Copyright Vandana Publications. All Rights Reserved.
6 GCI GCI Table shows a significant growth in Global competiveness ranking and the Readiness from 84th rank to 69th rank. Again it shows a positive correlation of We can say it is also remarkable growth is achieved. TUNISIA It is a small country having 10.8 million population. This country gets more than 50% of its revenue from service sector. Manufacturing contributes 30% to 40% and the rest is taken by agriculture. Table 9 - Tunisia Year wise GCI and ing GCI NA GCI NA NA NA Efficiency Enhancers NA Efficiency NA Enhancers NA factors NA factors Data in the Table 9 indicates a decline in the GCI from4.5 to 4.0 during the period to It lost 47 places in the ranking sliding 40 to 87. When we look into the other indexes, the Basic Requirements score declined from 5.1 to 4.4. Efficiency enhancers score declined from 4.1 to 3.7 and the factors area also shows a negative growth scoring 3.9 to 3.4 Table 10 - Tunisia Year wise GDP and Readiness NA Readiness Index NA Readiness GCI Index NA GCI NA The table shows a dip in the readiness scoring from 55 to 90. Global competitiveness ranking also dipped from 40 to 87. A positive correlation of is seen. EGYPT Egypt having million population doing more on service followed by manufacturing and agriculture Table 11 - Egypt Year wise GCI and ing GCI GCI Copyright Vandana Publications. All Rights Reserved.
7 Efficiency Enhancers Efficiency Enhancers factors factors Table 11 shows the declining GCI from 4.0 to 3.6 during the period starting from to The ranking shows a downward movement from 70 th rank to 119 th rank. When we look into the other indexes, the score declined from 4.2 to 3.7. Efficiency enhancers score declined from 3.9 to 3.6 and the factors area also shows a declining score 3.5 to 3.2 Table 12 - Egypt Year wise Global competitiveness and Readiness Readiness Index Readiness GCI Index GCI Table 12shows a depression in the readiness score, rank, Global competitiveness score and rank. A positive correlation of is seen between the ranks. BELGIUM Belgium is a small country with 11.2 million population. Service sector fetches more than 75% of the revenue. Manufacturing is the next contributor, agriculture contributes very minimum. Table 13 BelgiumYear wise GCI and ing - Table 13 GCI GCI Efficiency Enhancers Efficiency Enhancers factors factors Table 13 shows a slight improvement in the CGI moving from 5.1 to 5.2. During the period the rank obtained varies from 15 and 19. When we look into the other indexes, the score improved from 5.0 to 5.1. Efficiency enhancers score maintained between 5.0 and 5.1 In 24 Copyright Vandana Publications. All Rights Reserved.
8 factors area again the score is maintained between 4.9 and 5.2, retaining the ranking between 12 and 15 Table 14 Belgium - Year wise GCI and Readiness Readiness Index Readiness GCI Index GCI Table 14shows a positive correlation of seen in the ranking and 0.8 is seen in the scores. V. COMPARISION BETWEEN COUNTRIES Table 15 readiness and Global competitiveness ranking Country Correlation in ing Correlation in the India Switzerland NA Belgium Philippines Tajikistan Tunisia Egypt It is observed that all the countries have positive correlation between the technological readiness and Global competitiveness. VI. GLOBAL TALENT COMPETITIVENESS RANKING Table 17 Comparison between Global competitiveness ranking and Global talent competitiveness ranking 2014 Country Global Talent Global Competitiveness Readiness Competitiveness ing India Switzerland Belgium Copyright Vandana Publications. All Rights Reserved.
9 Philippines Egypt Singapore United States Canada Sweden United Kingdom Denmark Australia Ireland Finland Germany Japan Netherlands Global Talent Competitiveness Index 2014 It is observed that there is a positive correlation of between Global Talent Competitiveness ranks and Global competitiveness ranks. Also a positive correlation of between Global Talent Competitiveness rank and Readiness rank, and a positive correlation of between Readiness rank and Global Talent Competitiveness rank. VII. CONCLUSION Technology helps for better productivity and cost effectiveness which results in prosperity. Investors objective is getting return on investment at the earliest. To attract investors the Competitiveness rank should be higher. So indirectly the Technology readiness attracts investments. Growing countries should get themselves ready with the growing technology to grow further. REFERENCES [1] Klaus Schwab,(2014)The Global Competitiveness Report , World Economic Forum [2] Klaus Schwab,(2013)The Global Competitiveness Report , World Economic Forum [3] Klaus Schwab,(2012)The Global Competitiveness Report , World Economic Forum [4] Klaus Schwab,(2011)The Global Competitiveness Report , World Economic Forum [5] Klaus Schwab,(2010)The Global Competitiveness Report , World Economic Forum [6] Klaus Schwab,(2009)The Global Competitiveness Report , World Economic Forum [7] Klaus Schwab,(2009)The Global Talent Competitiveness Index2014, INSEED [8] Bruno Lanvin and Paul 26 Copyright Vandana Publications. All Rights Reserved.
10 Copyright Vandana Publications. All Rights Reserved.
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