GLOBAL COMPETITIVENESSAN OVERVIEW

What is Competition?
A competition is when people try their best to do

something better than other people so they can win. What Is A Business? A business tries to make money by selling goods or providing a service. The Marketplace Buying and selling creates the marketplace. Businesses are sellers. They sell goods and services to make money. People who pay for goods and services are called buyers. Buyers and sellers come together in the marketplace.

Competition in the Marketplace

When two or more businesses sell the same

goods or service, they are competing for the same market. When businesses compete, they try to find ways to get you to choose them. Buyers get to choose where to spend their money. This is competition in the marketplace.

Competitiveness def
Competitiveness is essentially the ability of a

firm, sector or economy to compete against other firms. It is taken to mean the ability of a firm, sector or economy to compete internationally (ie with their equivalents in other countries) in other words, macro-economic rather than microeconomic competitiveness.

According to The World Economic Forum COMPETITIVENESS is defined as that collection of factors, policies and institutions which determine the level of productivity of a country and that, therefore, determine the level of prosperity that can be attained by an economy. Thus, a more competitive economy is one that is likely to grow faster over the medium to long term.

 PRODUCTIVITY is also a the key driver of

the rates of return on investment, which, in turn, determine the aggregate growth rates of the economy. Thus, a more competitive economy is one that is likely to grow faster over the medium to long term

 Level of Competitiveness
Country Competitiveness: extent to which a national environment is conducive or detrimental to business. Industry Competitiveness: extent to which an industry return on investment. The concept can also be defined as the collective ability of firms in the sector to compete internationally. Company Competitiveness: ability to design, produce and or market products or services superior to those offered by competitors, considering the price and non-price qualities.
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The 12 Pillars of GCI

Institutions Infrastructure Macroeconomic Environment Health and Primary Education Higher Education & Training Goods Market Efficiency Labor Market Efficiency Financial Market Development Technological Readiness Market Size Business Sophistication Innovation
BASIC REQUIREMEN TS

EFFICIENCY ENHANCERS

INNOVATION & SOPHISTICAT

1: Institutions
The institutional environment is determined by the legal and administrative framework within which individuals, firms, and governments interact to generate income and wealth in the economy.
The lack of strong Institutions lead to: Excessive bureaucracy and red tape Overregulation Corruption Dishonesty in dealing with public contracts Lack of transparency and trustworthiness

2: Infrastructure
Extensive and efficient infrastructure is critical for ensuring the effective functioning of the economy, as it is an important factor determining the location of economic activity and the kinds of activities or sectors that can develop in a particular economy. It is impossible for a Nation to experience economic turn-around without: Electricity (constant supply) Transportation and Communication - telecoms

3: Macroeconomic Environment
The stability of the macroeconomic environment is important for business and, therefore, is important for the overall competitiveness of a country. The government cannot provide services efficiently if it has to make high-interest payments on its past debts.

4: Health and Primary Education

A healthy workforce is vital to a countrys competitiveness and productivity. Workers who are ill cannot function to their potential and will be less productive. Poor health leads to significant costs to business, as sick workers are often absent or operate at lower levels of efficiency. In addition to health, this pillar takes into account the quantity and quality of basic education received by the population, which is increasingly important in todays economy.
The Health of a Nation, is her Wealth!

5: Higher Education & Training

Quality higher education and training is crucial for economies that want to move up the value chain beyond simple production processes and products. In particular, todays globalizing economy requires countries to nurture pools of well-educated workers who are able to adapt rapidly to their changing environment and the evolving needs of the production system. This pillar measures secondary and tertiary enrollment rates as well as the quality of education as evaluated by the business Similarly, the Wealth of a Nation, is highly community.
dependent on her Citizens level of education!

6: Goods Market Efficiency

Countries with efficient goods markets are well positioned to produce the right mix of products and services given their particular supply-anddemand conditions, as well as to ensure that these goods can be most effectively traded in the economy. The best possible environment for the exchange of goods requires a minimum of impediments to business activity through government intervention.

7: Labor Market Efficiency

The efficiency and flexibility of the labor market are critical for ensuring that workers are allocated to their most efficient use in the economy and provided with incentives to give their best effort in their jobs. Labor markets must therefore have the flexibility to shift workers from one economic activity to another rapidly and at low cost, and to allow for wage fluctuations without much social disruption. Efficient labor markets ensure: Clear relationship between worker incentives Promotion meritocracy at the workplace Equity in the business environment between women and men

8: Financial Market Development

An efficient financial sector allocates the resources saved by a nations citizens, as well as those entering the economy from abroad, to their most productive uses. It channels resources to those entrepreneurial or investment projects with the highest expected rates of return rather than to the politically connected.

Trust and Transparency!

9: Technological Readiness
In todays globalized world, technology is increasingly essential for firms to compete and prosper. The technological readiness pillar measures the agility with which an economy adopts existing technologies to enhance the productivity of its industries, with specific emphasis on its capacity to fully leverage ICT in daily activities and production processes for increased efficiency and competitiveness.

There is high correlation between infrastructure & Technolo

10: Market Size

The size of the market affects productivity since large markets allow firms to exploit economies of scale. In the era of globalization, international markets have become a substitute for domestic markets, especially for small countries. There is vast empirical evidence showing that trade openness is positively associated with growth.

Population does matter!

11: Business Sophistication

Business sophistication concerns two elements that are intricately linked: the quality of a countrys overall business networks and the quality of individual firms operations and strategies. These factors are particularly important for countries at an advanced stage of development, when, to a large extent, the more basic sources of productivity improvements have been exhausted.

12: Innovation
Innovation is particularly important for economies as they approach the frontiers of knowledge and the possibility of integrating and adapting exogenous technologies tends to disappear.

GLOBAL COMPETITIVENESS INDEX

Global competitiveness index evaluates the

productivity and efficiency of the countries. It is a tool for evaluating country potential for growth. It shows which countries sets the best example for the rest of the world in terms of economic performance, business efficiency, infrastructure and government efficiency.

The World Economic Forum (WEF) Geneva, Switzerland produces a yearly report to measure countries and regions competitiveness among Nations of the world using Global Competitiveness Index (GCI)

The GCI was launched in 2005 and currently in its 7th year, it has identified 12 Pillars that measures and contribute to Nations Competitiveness.

Data Source: WEF_GlobalCompetitivenessReport_2011 -

Global Competitiveness Index Report

Global competitiveness report is a yearly report

published by the world economic forum. The first report was released in 1979. The 2011-2012 report covers 142 major and emerging economies. Switzerland leads the ranking as the most competitive economy in the world as the united states which ranks first for several years fell to fifth place due to the consequences of financial crisis of 2007-2010

2011-12 RANKINGS
1. SWITZERLAND 2. SINGAPORE 3. SWEDEN 4. FINLAND 5. UNITED STATES 6. GERMANY 7. NETHERLAND 8. DENMARK 9. JAPAN 10. UNITED KINGDOM

RANKING OF INDIA AND CHINA

INDIA RANKS 56 WHILE CHINA RANKS 26 IN THE

GLOBAL COMPETITIVENESS REPORTS RANKING FOR 2011-12.

INDIA RANKS 51 IN 2010-11 WHILE CHINA RANKS 27.
INDIA RANKS 49 IN 2009-10 WHILE CHINA RANKS 29. INDIA IS BEHIND CHINA(26),SOUTHAFRICA(50) AND

BRAZIL(53).RUSSIA(66) IS THE ONLY COUNTRY AMONG BRICS NATIONS TO TRAIL INDIA.

Factors Contributing Competitive Environment in India

Delicensing

De-reservation of SSI items Public sector disinvestment & privatization. Opening up of new sector to private enterprise. Liberalization of FDI Import competition

India Land of Opportunities:

Fourth largest Economy (PPP) A safe place to do business Largest democracy political stability & consensus on reforms Largest reservoir of skilled/semi-skilled manpower Long-term sustainable Competitive advantage Highest returns on investment; India 19.33%, China 14.25%, Thailand 13.3% Liberal & transparent investment policies Developing an International presence is the key strategy for business growth

Market overview and Approach

Population of 1.09 Billion 12th largest economy in the world in 2005 by GDP 4th largest by PPP

170-200 million people with growing purchasing power

5% GDP growth rate Over 45% of the Indian population is under the age of 20

Key factors for success

Reliable local partners Good planning Indian consumers are price-conscious Adapt products for local conditions Have an efficient distribution network Consider a local/regional approach

India Competitiveness
Immense labour pool High on qualification/capabilities Low on cost Language skills Work ethics & commitments Mature financial market Favorable labour laws

IP Protection Laws Mature management talent

India is emerging as the preferred global destination due to a number of significant advantages over other countries Location Attractiveness Infrastructure Communications International connectivity Ever improving highways and ports infrastructure Communications Low Country Risks/ FDI Incentives Stable political environment Independent judiciary Low entry barriers Attractive Incentives

Competitiveness Gap Between India And China

COMPETITIVENESS GAP BETWEEN INDIA AND CHINA

CONTINUES WIDENING DUE TO THE FOLLOWING REASONS.

THE

INFRASTRUCTURE IN INDIA REMAINS LARGERLY INSUFFICIENT AND ILL ADAPTED TO THE BUSINESS NEEDS. INDIA IS RANKED 89 AMONG 142 COUNTRIES ON THE INFRASTRUCTURE PARAMETER.

IN HEALTH AND BASIC EDUCATION INDIA RANK IS

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