The Global Competitiveness Report 2017-2018 Briefing for the Geneva-based Diplomatic Community Cologny, 21 September 2017

Why competitiveness matters Annual GDP growth rate (average, %)

Productivity slowdown Total factor productivity, (GDP-weighted growth)

Core challenges to growth in today’s context Structural headwinds Technological changes and innovation Uncertainty about globalization Disruptive inequalities

The GCI framework 5 6 11 12 4 7 8 9 10 1 2 3 Efficiency enhnancers Innovation and sophistication factors Basic requirements 1 Institutions 2 Infrastructure 5 Higher education and training 6 Goods market efficiency 11 Business sophistication 12 Innovation 3 Macro-economic environment 4 Health and primary education 7 Labor market efficiency 8 Financial market development 9 Technological readiness 10 Market size

GCI data 114 indicators in total Quantitative data mostly sourced from international organizations Perception data sourced from World Economic Forum’s annual Executive Opinion Survey 14,375 respondents in 2017 | median sample size: 83

The Global Competitiveness Index 2017-2018 Partial rankings out of 137 Economy Score (1-7) Score 1 Switzerland 5.9 22 France 5.2 2 United States 26 Korea, Rep. 5.1 3 Singapore 5.7 27 China 5.0 4 Netherlands 33 Chile 4.7 5 Germany 36 Indonesia 6 Hong Kong SAR 5.5 38 Russian Federation 4.6 7 Sweden 40 India 8 United Kingdom 43 Italy 4.5 9 Japan 51 Mexico 4.4 10 Finland 5.4 61 South Africa 4.3 14 Canada 5.3 80 Brazil 4.1 17 United Arab Emirates 92 Argentina 4.0 21 Australia 125 Nigeria 3.3

Global Competitiveness Index Pecentile rank

1. The financial sector remains vulnerable Financial sector supports all economic activity – stability and efficiency are critical Ten years after the crisis, vulnerabilities persist: debt piling up, non-performing loans, rise of (much less regulated) non-bank sector, securitization, unfishined reforms and talks of deregulation

GCI Financial market development pillar Score 1-7 [best]

2. More innovation but limited benefits Some emerging economies are becoming better at innovating But unbalanced innovation ecosystem: innovation remains concentrated in a few clusters, while digital divide persists More widespread technological adoption is needed for innovation to yield meaningful, society-wide benefits

Unbalanced ecoystem Rank out of 137 (inverted scale)

3. Protect workers, not jobs Globally labor markets have become more flexible over the last decade, thanks to reforms and globalization Flexible labor markets key for 4IR But this does not necessarily imply a trade-off between flexibility, workers’ protection and social inclusion Some of the most competitive economies are performing well in all three dimensions

Flexible, protected, equal: Having it all Labor market flexibility (1-7 [more flexibility]) Unequal ITUC Workers’ rights protection (1-7 [more protection])

Thank you! gcp@weforum.org