Thursday, September 5, 2013

5/9/2013: WEF on Ireland's Competitiveness - detailed analysis

World Economic Forum Global Competitiveness Report 2013-2014 puts Ireland's competitiveness in 28th place, one position worse in global rankings than in 2012-2013 report. Here are summary stats.

First, top 30 countries (2013-2014 ranks) and their recent performance history:

Several points of note:
  • Compared to two years ago, there is only one new addition to top 10 performers group: Hong Kong. Denmark - ranked 8th in 2011-2012 report is now ranked 15th.
  • Switzerland and Singapore are unchallenged ranked 1 and 2.
    Despite a recession, Finland ranks ahead of Germany and in venerable 3rd place. Sweden, meanwhile, lost 3 places over the last two years.
  • Ireland's competitiveness 'neighbourhood' now includes Brunei and Malaysia, with such 'stars' of global competitiveness as Saudi Arabia, UAE and Qatar outperforming Ireland significantly.
  • China and Puerto Rico are snapping on our heels. Iceland, Estonia, Oman, and Chile are nearby as well.
  • We ranked 9th in EU18 euro area.

Ireland's relatively poor performance is highlighted in the following table, showing our overall decline from 22nd position worldwide in 2008-2009 to 28th in 2013-2014 reports. Blue colour codes improvements on 2008-2009 ranks and red codes deterioration in rankings.

The table above shows that Irish rankings are severely depressed by the Macroeconomic Stability (134th), Financial Markets Sophistication (85th) and Market Size (57th). We can't do much about the latter one, of course. We rank below where we should be in terms of Infrastructure (26th) and in terms of Institutions (16th), Higher Education and Training (18th), Labour Market Efficiency (16th), as well as across both sub-components of Innovation factors.

Full report is available here: and on page 222 there is a handy summary for Ireland's scores. Here's a chart mapping Ireland relative to its peers average:
There is very little in the above chart that distinguishes Ireland to the better side of the average Innovation-driven economy. The largest gaps in our favour are found in Goods Market efficiency (largely thanks to the EU common trade area, plus our severe dependency on imports, normal for a small open economy), and Institutions (ditto for the EU, plus common law etc). Best way to describe us, using the above chart - abstracting away from Macroeconomic and Banking crises - is average for our group.

In case you think otherwise, our own assessments confirm the above conclusion:
Notice that - again aside from the financial crisis - our top 5 drags on performance are: Inefficient government bureaucracy; Inadequate supply of infrastructure; Insufficient capacity to innovate and Tax rates. All are of our own making.

Should you care to see more: here are the details. Reading the below, keep in mind, we really should be aiming to be in top 12-15 in the world, if not better. We certainly market ourselves as if we are in top 10 at the very least...

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