Insight Report The Global Competitiveness Report 2019

1 Insight ReportKlaus Schwab, World Economic ForumThe GlobalCompetitiveness Report2019 Insight ReportThe GlobalCompetitiveness Report2019 Professor Klaus SchwabWorld Economic ForumEditorTERMS OF USE AND DISCLAIMERThe analysis presented in the Global Competitiveness Report 2019 (herein: Report ) is based on a methodology integrating the latest statistics from international organizations and a survey of executives. The methodology, developed in collaboration with leading experts and practitioners through a three-year consultative process, is designed to support countries to identify relevant policies and practices. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the World Economic Report presents information and data that were compiled and/or collected by the World Economic Forum (all information and data referred herein as Data ). Data in this Report is subject to change without notice.

2 The terms country and nation as used in this Report do not in all cases refer to a territorial entity that is a state as understood by international law and practice. The terms cover well-defined, geographically self-contained economic areas that may not be states but for which statistical data are maintained on a separate and independent the World Economic Forum takes every reasonable step to ensure that the Data thus compiled and/or collected is accurately reflected in this Report , the World Economic Forum, its agents, officers, and employees: (i) provide the Data as is, as available and without warranty of any kind, either express or implied, including, without limitation, warranties of merchantability, fitness for a particular purpose and non-infringement; (ii) make no representations, express or implied, as to the accuracy of the Data contained in this Report or its suitability for any particular purpose; (iii) accept no liability for any use of the said Data or reliance placed on it, in particular, for any interpretation, decisions, or actions based on the Data in this Report .

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4 This source attribution requirement is attached to any use of Data, whether obtained directly from the World Economic Forum or from a user. Users who make World Economic Forum Data available to other users through any type of distribution or download environment agree to make reasonable efforts to communicate and promote compliance by their end users with these who intend to sell World Economic Forum Data as part of a database or as a standalone product must first obtain the permission from the World Economic Forum Economic Forum91-93 route de la CapiteCH-1223 Cologny/GenevaSwitzerlandTel.: +41 (0)22 869 1212 Fax: +41 (0)22 786 2744E-mail: 2019by the World Economic ForumAll rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, or otherwise without the prior permission of the World Economic : 978-2-940631-02-5 The Report and an interactive data platform are available at The Global Competitiveness Report 2019 | iii Preface vby Klaus SchwabExecutive Summary viiAt a Glance: The Global Competitiveness Index 2019 Rankings xiiiChapter 1: Global Findings 1 Chapter 2: Regional and Country Analysis 11 Chapter 3: Competitiveness , Equality and Sustainability The Way Forward 23 Economy Profiles 41 How to Read the Economy Profiles 43 Index of Economy Profiles 45 Economy Profiles 46 Appendix A: Global Competitiveness Index Methodology and Technical Notes 611 Appendix B: The Executive Opinion Survey.

5 633 The Voice of the Business CommunityContributors and Acknowledgements 641 Partner Institutes 643 Contents The Global Competitiveness Report 2019 | v Globalization and the Fourth Industrial Revolution have created new opportunities but also disruption and polarization within and between economies and societies. In this context, the World Economic Forum introduced last year the new Global Competitiveness Index , a much-needed new economic compass, building on 40 years of experience of benchmarking the drivers of long-term index is an annual yardstick for policy-makers to look beyond short-term and reactionary measures and to instead assess their progress against the full set of factors that determine productivity. These are organized into 12 pillars: Institutions; Infrastructure; ICT adoption; Macroeconomic stability; Health; Skills; Product market; Labour market; Financial system; Market size; Business dynamism; and Innovation results of the GCI in 2019 reveal that, on average, most economies continue to be far from the Competitiveness frontier the aggregate ideal across all factors of Competitiveness .

6 Performance is also mixed across the 12 pillars of the index. The Report demonstrates that 10 years on from the financial crisis, while central banks have injected nearly 10 trillion dollars into the Global economy, productivity-enhancing investments such as new infrastructure, R&D and skills development in the current and future workforce have been suboptimal. As monetary policies begin to run out of steam, it is crucial for economies to rely on fiscal policy, structural reforms and public incentives to allocate more resources towards the full range of factors of productivity to fully leverage the new opportunities provided by the Fourth Industrial Report also looks to the future, specifically the two defining issues of the next decade building shared prosperity and managing the transition to a sustainable economy and poses the question of their compatibility with Competitiveness and growth. There is already a clear moral case for a focus on the environment and on inequality.

7 The Report demonstrates that there are no inherent trade-offs between economic growth and social and environmental factors if we adopt a holistic and longer-term approach. While few economies are currently pursuing such an approach, it has become imperative for all economies to develop new inclusive and sustainable pathways to economic growth if we are to meet the Sustainable Development Goals. Bold leadership and proactive policy-making will be necessary, often in areas where economists and public policy professionals cannot provide evidence from the past. The Report showcases the most promising emerging pathways, policies and incentives by identifying win-win spaces, but also points to the choices and decisions that leaders must make in sequencing the journey towards the three objectives of growth, inclusion and the World Economic Forum s Platform for Shaping the Future of the New Economy and Society, the home of The Global Competitiveness Report , over 200 leaders from business, government and civil society work together to deepen their understanding of complex issues, shape new models and standards and drive scalable, collaborative action for s ystemic change on three deeply interconnected areas: growth and Competitiveness ; education, skills and work; and equality and inclusion.

8 By combining Insight , models and action the Platform serves as an accelerator for emerging solutions, pilots and partnerships. We invite leaders to join us to co-shape new solutions to the challenges highlighted in this Report , working together with the urgency and ambition that the current context demands of want to express my gratitude to the core project team involved in the production of this Report : Sophie Brown, Roberto Crotti, Thierry Geiger, Guillaume Hingel, Saadia Zahidi and other colleagues from the Platform for Shaping the Future of the New Economy and Society. My deep gratitude goes to Professor Xavier Sala-i-Martin for his guidance and to the experts, practitioners and governments who were consulted. Finally, we thank the 141 Partner Institutes, which help administer the Executive Opinion Survey, whose results provide invaluable data for the GCI and other Global Compe titiveness Report is des ig ned to help policy-makers, business leaders and other stakeholders shape their economic strategies in the era of the Fourth Industrial Revolution.

9 We hope it will also serve as a call to action to engage in the visionary and bold leadership required to build a new economic agenda for growing, sustainable and inclusive economies that provide opportunity for SCHWABF ounder and Executive Chairman, World Economic Forum The Global Competitiveness Report 2019 | vii A country s performance on the overall GCI results as well as each of its components is reported as a progress score on a 0-to-100 scale, where 100 represents the frontier , an ideal state where an issue ceases to be a constraint to productivity growth. Each country should aim to move closer to the frontier on each component of the index. The GCI allows economies to monitor progress over time. This approach emphasizes that Competitiveness is not a zero-sum game between countries it is achievable for all Findings and ImplicationsEnhancing Competitiveness is still key for improving living standardsSustained economic growth remains a critical pathway out of poverty and a core driver of human development.

10 In fact, there is overwhelming evidence that growth has been the most effective way to lift people out of poverty and improve their quality of life. For least-developed countries (LDCs) and emerging countries, economic growth is critical for expanding education, health, nutrition and survival across populations. With a decade left, the world is not on track to meet most of the 17 United Nations Sustainable Development Goals by the deadline of 2030. On Goal 8 (Decent Work and Economic Growth), LDCs have consistently missed the target of 7% growth since 2015. Extreme poverty reduction is decelerating. At current pace, it is estimated that by 2030 the rate will stand at about twice the 3% target set in Goal 1. As of 2015, 46% of the world s population struggled to meet basic needs. Hunger is on the rise again and affects one in nine people in the world. The zero hunger target set by Goal 2 will almost certainly be missed.