Sustainable Competitiveness index
The Sustainable Competitiveness Index (SCI) project was initiated in 2010 by the World Economic Forum's Centre for Global Competitiveness and Performance. The SCI is a composite indicator which measures the drivers of long-term competitiveness. The project was officially launched on October 5, 2011, ahead of the Forum's Summit on the Global Agenda 2011.
Competitiveness research at the World Economic Forum
The SCI draws on the Forum's expertise in studying and benchmarking competitiveness. The findings of this research have been featured in a report which has been published annually since 1979, when the first Report on the Competitiveness of the European Industry that focused on 16 countries was launched. In expanding to global coverage as opposed to a selection of countries, the Report then changed its name to become The 'Global Competitiveness Report (GCR). The 2011-2012 edition of the GCR covers 142 economies.
The Forum defines competitiveness as "the set of institutions, policies, and factors that determine the level of productivity of a country", in an effort to understand and measure the drivers of economic prosperity. The current framework is the Global Competitiveness Index (GCI). The GCI is a comprehensive composite indicator that covers 12 areas that are considered the 'pillars' of competitiveness: institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication and innovation. The GCI considers the drivers of productivity that are important over the short to medium term.
Origin and objectives of the SCI project
The driving force behind the SCI project is the Forum's belief that in the long term, in order to maintain national competitiveness, a number of characteristics are important. These include changing demographics, social cohesion, and environmental stewardship. At present these factors are currently not included in the Global Competitiveness Index. A high-level advisory board has however been working with the Forum on this critical issue.
One of the key objectives of the work is to highlight the relationship between competitiveness and sustainability whilst isolating shorter and longer-term effects. This makes it possible to compare and contrast countries that are well organised for the short, medium and long term future, with those that are less prepared. Another way of looking at this issue is that countries can face a number of vulnerabilities which may develop into future sources of instability, resulting in the erosion of their competitiveness over time.
Sustainability-Adjusted Global Competitiveness Index (GCI)
In 2012, The World Economic Forum also released the Sustainability-Adjusted Global Competitiveness Index (GCI).
This new measure aims to assess the “the set of institutions, policies and factors that make a nation remain productive over the longer term while ensuring social and environmental sustainability”. measures not only the propensity to prosper and grow, but also integrates the notion of “quality growth”, taking into account environmental stewardship and social sustainability. Please see below for the structure of the index:
Definition and framework
The SCI intends to measure sustainable competitiveness, defined as
"the set of institutions, policies, and factors that determine the level of productivity of a country while ensuring the ability of future generations to meet their own needs."
The SCI framework builds on the GCI and includes all the indicators included in the GCI framework. A preliminary version of the SCI framework contains five main components: Human capital, Market conditions, Technology and innovation, Policy environment and enabling conditions, and Physcial environment. Each component in turn comprises a number of categories (or 'pillars'). The preliminary thinking and output of the project is presented in a special chapter in The Global Competitiveness Report 2011-2012.
The Forum intends to evolve this framework based on the ongoing dialogue with experts.
SCI preliminary framework
Source: World Economic Forum.
Due to the SCI project still being relatively new, the Forum has not yet released rankings for the SCI. Further work is required before any rankings are published, including incorporating factors which as mentioned previously are fundamental to maintaining national competitiveness, however are not yet captured in the SCI. The Forum intends to update and refine its thinking and methodology over time, integrating feedback and the latest research on a continual basis. To date, only scores and ranks of the indicators included in the framework of the SCI have been released.
- World Economic Forum, press release (October 5, 2011) available here http://www.weforum.org/NR_SCI2011
- World Economic Forum. Ed. K. Schwab. The Global Competitiveness Report 2011-2012. Geneva: World Economic Forum.
"The Long-Term View: Developing a Framework for Assessing Sustainable Competitiveness" (PDF) in The Global Competitiveness Report 2011-2012 (pp 51-74)
Sustainable Competitiveness Index project page at the World Economic Forum
Centre for Global Competitiveness and Performance at the World Economic Forum