Reforms Working? India Rises Five Places, Makes Largest Gain Among G20 Nations In 2018 Competitiveness Report

India has emerged as the fifty-eighth most competitiveness economy in the World Economic Forum (WEF)‘s Global Competitiveness Index for 2018, up five places from the last year’s reforms. With a score of 62.0, it registered the biggest gain of any country in the G20.

Of the BRICS (Brazil, Russia, India, China, South Africa) grouping of large emerging economies, China has been ranked as the most competitive, coming in at the twenty-eighth position.

As per the report, India’s most significant competitive strengths include its market size, innovation (in particular the quality of its research establishments and business dynamism (including the number of disruptive businesses). While the sectors in which the country lacks are labour market (in particular workers rights), product market (specifically, trade tariffs) and skills (in particularly, pupil-teacher ratio).

Interestingly the report also noted that, despite its vibrant IT sector, India is among the weakest performers, with a score of 28.0 (ranked 117) with regards to broad-based ICT (Information & Communication Technology) adoption.

The index, released annually by the global think-tank, “assesses the microeconomic and macroeconomic foundations of national competitiveness, which is defined as the set of institutions, policies, and factors that determine the level of productivity of a country.” This year, the list was topped by the US, replacing Switzerland as the most competitive economy in the world.

In this latest report, WEF introduced new indicators of competitiveness like entrepreneurial culture, companies embracing disruptive ideas, multi-stakeholder collaboration, critical thinking, meritocracy, and social trust, which complement the more traditional components like physical infrastructure, macroeconomic stability, property rights and years of schooling.

These new indicators will determine the success of economies in the coming Fourth Industrial Revolution. The term, coined by the think-tank in 2016, will be characterised by a fusion of technologies that will blur the lines between the physical, digital, and biological spheres.