1. Wong Check Ying 04003446 Cheung Siu Wun 04004485 Lee Po Hung 04005856 Leung Yee Ka 04014057

3. Introduction Global Competitiveness Report is published by the World Economic Forum Assessed 117 economies understanding the key ingredients of economic growth and prosperity

4. Introduction Based on two indexes - Growth Competitiveness Index - Business Competitiveness Index Amendment in 2004 - Global Competitiveness Index - 9 pillars---institutions, infrastructure, market efficiency, business sophistication, higher education and training, etc

6. Growth Competitiveness Index (GCI) measure the capacity of the national economy to achieve sustained economic growth a number of complementary concepts providing a quantified framework for measuring competitiveness Limitations - from small and homogenous economies to big and diverse societies

7. hard data - university enrollment rates, inflation performance, the state of the public finances, the level of penetration of new technologies, etc survey data drawn from the World Economic Forum’s Executive Opinion Survey - captures the expert opinions of business leaders and entrepreneurs on macroeconomic environment, corruption, technology, innovation and diffusion, domestic competition, etc Growth Competitiveness Index (GCI)

8. Core innovators are countries with more than 15 US utility patents registered per million population non-core innovators are all other countries Growth Competitiveness Index (GCI)

9. explaining the evolution of growth in a country--- “three pillars” - the quality of the macroeconomic environment - the state of the country’s public institutions - the level of its technological readiness 3 indexes - the technology index - the public institution index - the macroeconomic environment index

11. Growth Competitiveness Index (GCI) measures the capacity for innovation and diffusion of technology 3 sub-indexes - innovation sub-index measures the levels of technological sophistication - technology transfer sub-index - information and communication technology sub- index measures of telephone lines, personal computers, Internet usage, etc Technology Index

12. Technology index for core economies / innovators = 1/2 innovation sub-index + 1/2 ICT sub-index Technology index for non-core economies / innovators = 1/8 innovation sub-index + 3/8 technology transfer sub-index + 1/2 ICT sub-index Growth Competitiveness Index (GCI) Technology Index

13. Innovation sub-index = 1/4 Survey data + 3/4 hard data Technology Transfer sub-index = un-weighted average of two technology transfer survey questions Information and Communication technology sub-index = 1/3 survey data + 2/3 hard data Growth Competitiveness Index (GCI) Technology Index

14. Growth Competitiveness Index (GCI)

16. measures the role of politics and the bureaucracy in supporting market-based economic activity and the division of labor 2 sub-indexes - the contracts and law sub-index concerns neutrality in government procurement, clear delineation and respect for property rights, etc - the corruption sub-index measures the pervasiveness of bribery in three key public service areas Public Institutions Index

17. Public institutions index = 1/2 contracts and law sub-index + 1/2 corruption sub-index Growth Competitiveness Index (GCI) Public Institutions Index

18. Growth Competitiveness Index (GCI) Public Institutions Index

20. Growth Competitiveness Index (GCI) Measures variables related to capital accumulation and the efficiency of the division of labor 1 sub-index - the macroeconomic stability sub-index include the real exchange rate relative to the US, the general government budget balance, consumer price inflation, etc Macroeconomic Environment Index

21. Macroeconomic environment index = 1/2 macroeconomic stability sub-index + 1/4 country credit rating + 1/4 government waste Macroeconomic stability sub-index = 5/7 hard data + 2/7 survey data Growth Competitiveness Index (GCI) Macroeconomic Environment Index

22. Growth Competitiveness Index (GCI) Macroeconomic Environment Index

23. GCI for core economies / innovators = 1/2 technology index + 1/4 public institution index + 1/4 macroeconomic environment index GCI for non-core economies / innovators = 1/3 technology index + 1/3 public institutions index + 1/3 macroeconomic environment index Growth Competitiveness Index (GCI)

26. underlying microeconomic factors determine economies’ current sustainable levels of productivity and competitiveness complementary approach to the forward-looking macroeconomic approach of the GCI highly skilled people, efficiency of government processes, quality of infrastructure, the competitive pressures faced by companies, etc The Business Competitiveness Index (BCI)

27. measures two areas that are critical to the microeconomic business environment in an economy - the sophistication of company operations and strategy - the quality of the overarching national business environment in which they are operating The Business Competitiveness Index (BCI)

28. 2 sub-indexes - companies’ operations and strategies - quality of the national business environment The Business Competitiveness Index (BCI)

30. Relationship between GCI and BCI

32. Partial regression results of GCI vs. GDP per capita growth

33. GDP 2005 Data source: 2005 CIA World Factbook 1World$55,500,000,000,000 2United States$11,750,000,000,000 3European Union$11,650,000,000,000 4China$7,262,000,000,000 5Japan$3,745,000,000,000 6India$3,319,000,000,000 7Germany$2,362,000,000,000 8United Kingdom$1,782,000,000,000 9France$1,737,000,000,000 1010 Italy$1,609,000,000,000 36Sweden$255,400,000,000 37Switzerland$251,900,000,000 38Hong Kong$234,500,000,000 39Malaysia$229,300,000,000 40Vietnam$227,200,000,000 41Greece$226,400,000,000 42Algeria$212,300,000,000 43Portugal$188,700,000,000 44Norway$183,000,000,000 45Denmark$174,400,000,000 46Czech Republic$172,200,000,000 139Iceland$9,373,000,000

34. Competitiveness VS. GDP About GCI Countries with high GDP - United States (rank2)-----GCI ranking 2 - Japan (rank 5)-----GCI ranking 12 Countries with relative high GDP - Denmark (rank 45)---- GCI ranking 4 Countries with low GDP - Iceland (rank 139)---- GCI ranking 7

35. Competitiveness VS. GDP About BCI Countries with high GDP - United States (rank2)-----BCI ranking 1 - Japan (rank 5)-----BCI ranking 8 Countries with relative high GDP - Denmark (rank 45)---- BCI ranking 4 Countries with low GDP - Iceland (rank 139)---- BCI ranking 17

36. GDP - per capita 2005 Data source: 2005 CIA World Factbook 1Luxembourg$58,900 2United States$40,100 3Guernsey$40,000 3Jersey$40,000 3Norway$40,000 4British Virgin Islands$38,500 5Bermuda$36,000 6San Marino$34,600 7Hong Kong$34,200 8Switzerland$33,800 9Cayman Islands$32,300 10Denmark$32,200 11Iceland$31,900 11Ireland$31,900 12Canada$31,500 13Austria$31,300 14Australia$30,700 15Belgium$30,600 16United Kingdom$29,600 17Netherlands$29,500 18Japan$29,400 19Finland$29,000 20France$28,700 20Germany$28,700 21Man, Isle of$28,500 22Sweden$28,400 23Aruba$28,000 24Gibraltar$27,900 25Singapore$27,800 98Peru$5,600

37. Competitiveness VS. GDP per capita About GCI Countries with high per capita GDP - United States (rank 2)-----GCI ranking 2 - Hong Kong (rank 7)-----GCI ranking 12 Countries with relative high per capita GDP - Japan (rank 18)---- GCI ranking 4 Countries with low per capita GDP - Peru (rank 98)---- GCI ranking 68

38. About BCI Countries with high per capita GDP - United States (rank 2)-----BCI ranking 1 - Hong Kong (rank 7)-----BCI ranking 20 Countries with relative high per capita GDP - Japan (rank 18)---- BCI ranking 8 Countries with low per capita GDP - Peru (rank 98)---- BCI ranking 81 Competitiveness VS. GDP per capita

39. GDP - real growth rate(%) 2005 Data source: 2005 CIA World Factbook 1Iraq52.30 2Chad38.00 3Liberia21.80 4Equatorial Guinea20.00 5Venezuela16.80 6Macau15.60 7Ukraine12.00 8Angola11.70 9Ethiopia11.60 10Liechtenstein11.00 11Mongolia10.60 12Tajikistan10.50 13Uruguay10.20 14Faroe Islands10.00 15Azerbaijan9.80 16Georgia9.50 17Kazakhstan9.10 17China9.10 18Armenia9.00 19Qatar8.70 20Argentina8.30 21Turkey8.20 21Mozambique8.20 22Romania8.10 22Singapore8.10 23Hong Kong7.90 24Vietnam7.70 25Latvia7.60 26Afghanistan7.50 26 Congo, Democratic Republic of the 7.50 26San Marino7.50 27Malaysia7.10 27Cook Islands7.10 28Moldova6.80 28Kuwait6.80 29Russia6.70 30Lithuania6.60 69Luxembourg2.30 69Barbados2.30 69Syria2.30 70Kenya2.20 71France2.10 71Denmark2.10 72Virgin Islands2.00 72Andorra2.00 72Bermuda2.00 72Comoros2.00 73Yemen1.90 73Gabon1.90 73Guyana1.90 73Jamaica1.90 73Austria1.90 74Greenland1.80 74El Salvador1.80 74Iceland1.80 74Switzerland1.80 75Germany1.70

40. Competitiveness VS. GDP real growth rate (%) About GCI Countries with high GDP real growth rate - Chad (rank 2)-----GCI ranking 117 - Mongolia (rank 11)-----GCI ranking 96 Countries with relative high GDP real growth rate - Hong Kong (rank 23)---- GCI ranking 12 Countries with low GDP real growth rate - Iceland (rank 74)---- GCI ranking 7 - Germany (rank 75)---- GCI ranking 15

41. Competitiveness VS. GDP real growth rate (%) About BCI Countries with high GDP real growth rate - Chad (rank 2)-----BCI ranking 116 - Mongolia (rank 11)-----BCI ranking 104 Countries with relative high GDP real growth rate - Hong Kong (rank 23)---- BCI ranking 20 Countries with low GDP real growth rate - Iceland (rank 74)---- BCI ranking 17 - Germany (rank 75)---- BCI ranking 3

43. What is WCI? WCI stands for World Competitiveness Index indicated in the World Competitiveness Yearbook most renowned and comprehensive annual report on the competitiveness of nations, ranking and analyzing how a nation environment creates and sustains the competitiveness of enterprises

44. GCRWCI Aimassess the capacity of the world’s economies to achieve sustained economic growth evaluate the overall competitiveness of countries Covermore than 100 economies 60 national and regional economies Global network 122 Partner Institutes55 Partner Institutes

45. GCRWCI Aggregation of data Aggregates data over the year Aggregates data over a 5-year period Collection of data Combines publicly available data with survey data that captures the perceptions and observations of business leaders in a given country Survey data are drawn from the Executive Opinion Survey (4,166 respondents) Hard data are taken from international and regional organizations and private institutes

47. Conclusion GDP and competitiveness are normally positively related, but there still some exception like Iceland which has low GDP but high competitiveness GDP per capita are normally in positive relation Real GDP growth rate are in negative relation to competitiveness They are only one of the sub-indexes should not focus on one pillar only