The 12 pillars of competitiveness refer to the various factors which can contribute to a nation’s success in the global market. They are interconnected and all contribute towards enabling a nation’s economic development.
The 12 pillars were developed by the World Economic Forum (WEF) and include the following:
1. Institutions: This covers the institutional structure of a nation, including the legal frameworks and other regulations, which enable the effective functioning of a society.
2. Infrastructure: This includes the availability of physical and digital resources which enable business operations. This could include roads, telecommunications, electricity and other resources.
3. Macroeconomic environment: The state of a nation’s economic policies, its fiscal and monetary policies, as well as its budget and public debt must be taken into account in order for a nation to be competitive.
4. Health and primary education: The availability of quality health and education services at a basic level provide individuals with fundamental skills and knowledge, which lead to economic development.
5. Higher education and training: Expanding to the quality of higher levels of education and training facilitates technological innovation and encourages research and development.
6. Goods market efficiency: This includes the efficient distribution of goods and services in a market. It concentrates on issues such as the level of competition, tariffs and business regulations.
7. Labour market efficiency: This refers to the level of productivity and flexibility of the labour market. It takes into account labour mobility, the level of employee compensation, and the availability of quality jobs.
8. Financial market advancement: This includes the level of development of the financial sector, including measures such as the stability of the banking sector and access to capital.
9. Technological readiness: This entails the readiness of a nation to implement new technologies, such as in communication, information technology, and production.
10. Market size: The size of the market and purchasing power of the population must be taken into account when assessing a nation’s level of competitiveness.
11. Business sophistication: This impacts the sophistication and efficiency of a nation’s businesses, for example the adoption of best practices, and the fostering of innovation.
12. Innovation: This pillar focuses on the capacity of a nation to generate a steady stream of new ideas, products, services and market opportunities. It has become a major factor in determining economic development.
How do you measure competitiveness?
Measuring competitiveness is complex, as there are many ways to measure competitive performance. Generally, though, competitiveness is measured by examining the competitive position of a company or industry against other players in the market.
This can be done by comparing overall financial performance, such as revenue and profitability, market share, cost structure, and product and service offerings. Additionally, the presence of a competitive advantage can be measured, such as the exclusive access to a patent or a unique distribution model.
Further, intangible factors, such as brand recognition or consumer loyalty, can be measured to understand the competitive position of a company or industry. Ultimately, these measures of competitiveness provide insights into the capabilities and strategies of a company or industry relative to its competitors and offer a way of benchmarking performance.
What are the 5 performance indicators?
The five performance indicators are key metrics that measure the performance of an organization or business. These indicators include customer satisfaction, profitability, employee retention, quality and productivity.
1. Customer satisfaction: This indicates how happy a customer is with the product or service and their overall experience. It can be measured through customer surveys, customer service reviews, and market research.
2. Profitability: This measurement looks at how much money a business earns divided by how much it spends. Factors to look at when measuring profitability include net sales, cost of goods sold, operating expenses, and gross margins.
3. Employee retention: This measures how well a business is retaining its employees. This can be done by looking at turnover, length of service, and employee satisfaction surveys.
4. Quality: This measures the degree to which a product or service meets customer requirements. Quality can be evaluated through customer feedback, defect analysis, and quality reviews.
5. Productivity: This measures the efficiency of an organization’s operations by looking at the quality and quantity of output. Factors include labor costs, output per hour, and efficiency ratios.
What are 3 indicators that a business is successful?
Success for a business can be measured in a number of ways. It is important to look at a variety of indicators to get a comprehensive picture of a company’s success. Here are three important indicators that a business is successful:
1. Profitability: A business that is making money on every sale or operation is usually considered successful. Profitability is usually measured by financial statements to determine the amount of money that has been earned or generated during a certain time period.
Companies that have a consistent history of generating a profit are well-positioned for success.
2. Innovation: Successful businesses tend to focus on innovating and improving their product offerings. By creating new products or services, businesses are able to maintain a competitive edge in their marketplace and capture additional market share.
Companies that embrace new technologies, processes, and strategies to stay ahead of the competition are usually seen as successful.
3. Growth: Sustainable growth is a key indicator of success. It shows that a business is increasing sales, expanding its customer base, and finding new markets to service. Companies that have staying power also have strong management and capital resources to maintain their trajectory and succeed in the long run.
Which are the pillars considered in the Global Competitiveness Index GCI )?
The Global Competitiveness Index (GCI) is a basis for evaluating the underlying strengths and weaknesses of a country’s economy. The GCI measures the set of institutions, policies, and factors that determine the level of productivity of a country and its ability to compete in the global market.
Developed by the World Economic Forum, the index is made up of 12 pillars which measure different facets of a country’s economic and institutional competitiveness.
The 12 pillars of the Global Competitiveness Index are:
1. Institutions: This pillar evaluates a country’s legal framework and protection of property rights, the effectiveness of governmental organizations and strength of government anti-corruption initiatives.
2. Infrastructure: This pillar evaluates a country’s transport and communications infrastructure, energy infrastructure and electricity access.
3. Macroeconomic Stability: This pillar measures the inflation, government debt levels and budget deficits of a country.
4. Health and Primary Education: This pillar examines indicators such as the health care system, prevalence of disease and the quality of primary education.
5. Higher Education and Training: This pillar evaluates the availability of higher education institutions, quality of training programs and access to learning resources.
6. Goods Market Efficiency: This pillar examines the effectiveness of the goods market, including supplier competition, cost of imports and exports and government subsidies.
7. Labor Market Efficiency: This pillar evaluates labor market flexibility, resource allocation and salary dispersion.
8. Financial Market Development: This pillar gauges the sophistication of capital markets, availability of venture capital, soundness of banks, level of insurance penetration and development of equity markets.
9. Market Size: This pillar measures the number of foreign customers and local demand for goods and services sold by companies.
10. Technological Readiness: This pillar evaluates a country’s capacity to adopt existing technologies and the availability of technological resources.
11. Business Sophistication: This pillar examines the level of corporate sophistication, quality of management, production processes and research and development activities.
12. Innovation: This pillar evaluates the level of innovation, number of patent applications, expenditure on research and development and royalty payments.
What are some examples of companies with sustainable competitive advantages?
Sustainable competitive advantages (SCA) are business strategies that allow a company to maintain a competitive edge over its competitors in the industry. These strategies create a “moat,” which helps the company maintain a lead over its competition in the marketplace.
Some common examples of companies with SCAs include Apple, Amazon, and Microsoft.
Apple has long had a sustainable competitive advantage. Apple revolutionized the tech industry with the introduction of the iPod, iPhone, and iPad. Their vision and product development have continued to be unmatched in the industry and they have held their leading position ever since.
The brand recognition and customer loyalty that Apple has earned through its iconic product lines have given it a competitive edge that few companies can match.
Amazon is also a classic example of a company that has a sustainable competitive advantage. Its online retail presence and use of advanced technologies that enable fast delivery times and customer satisfaction have put Amazon at the top of the industry.
In addition, the company has established itself as a leader in cloud computing, artificial intelligence, and other technological fields.
Microsoft is another successful example of a company with a sustainable competitive advantage. For decades, Microsoft has dominated the computer industry, maintaining a stronghold in software products, such as its Windows operating system and Office Suite.
In recent years, Microsoft has been able to capitalize on its experience and resources, broadening its range of products and services and using its SCA to stay ahead of the competition.
