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India’s Global
Competitiveness Index
A comparison with UK, China and Hongkong
Student Name
11/24/2018
Table of Contents:
Introduction ................................................................................................................................................... 2
Description of the 3 efficiency enhancers: .................................................................................................... 2
Higher education and training in the competitiveness index ........................................................................ 3
Technological readiness and global competitiveness index: ........................................................................ 3
Market size and global competitiveness index.............................................................................................. 4
India’s competitiveness in these efficiency enhancers: ................................................................................ 4
Comparing India’s competitiveness with three other countries .................................................................... 5
Comparing India’s competitiveness in Efficiency Enhancers ...................................................................... 7
Summary and conclusion: ............................................................................................................................. 8
References:.................................................................................................................................................... 9
Introduction
In this task, we are going to analyze the 3 efficiency enhances in the Global competitiveness
index for India and compare it with other countries namely the UK, China and Hong Kong. The
6 efficiency enhancers listed in the Global competitiveness report include the higher education
and training, goods market efficiency, labor market efficiency, Financial market development,
technological readiness and market size. For this task, the three efficiency enhancer that have
been taken include the higher education and training, technological readiness and the market
size.

Description of the 3 efficiency enhancers:

Though all the 6 efficiency enhancers are considered to be important for Helping in the business
Development of international businesses, it is important for the country to have higher education
and training for its labor force to participate in the international business environment(Saunders
& Charles, 1985). It is also necessary to have technological readiness in order to keep in par
with the other countries. Similarly the market size of the country is also crucial for the
development of market share for both local businesses and global businesses. Hence we have
taken these three indicators and have elaborated about the three indicators and the rank with
India holds in the three indicators.
Higher level of education and training of technical skills are very important for the growth of
economy. India has the second largest populated country in the world, it is essential to train the
labour force even if the literacy rate is growing over the years. It has been empirically proved
that successful Nations which invest more in higher education and training in skill development
would move up in the ladder of global competitiveness (Bazargan, Ghasemi, Ardebili, & Zarei,
2017).
The growth of internet technologies and cloud computing, and various other computer systems
like the enterprise resource planning systems, technological readiness would ensure quality and
quantity of the production processes in any country.
Similarly large markets with increasing incomes allow faster growth rates as the aggregate
demand for both local commodities and imported goods will increase with increasing incomes as
the consumption component of the aggregate demand increases(WEF-GCI, 2018).

Higher education and training in the competitiveness index

Global competitiveness index report provides the rankings based on several pillars of economic
development and the stages of development begins with the stage of least development which are
factor driven, efficiency driven in the second stage and innovation driven in the advanced
stage. As the countries in the stage of factor driven moving to the stage of efficiency driven, it
becomes necessary to have higher education and training(Bazargan et al., 2017). Countries
which are in the least development stage gain competitive advantage based on the natural
resources and unskilled labour. At this stage the most important factors that are important
include the institutions, infrastructure macroeconomics framework and primary education.
However moving into an efficiency driven economy necessitates the economies like India and
China to have quality and accessible higher education institutions, efficient labour Markets and
commodity markets and the ability of the economy to use Technology efficiently and effectively.
Hence it becomes necessary for the Indian economy to develop their workers skills in order to
create and use the technological innovations that are necessary for the economy to reach a
highest state of development(Saunders & Charles, 1985).

Technological readiness and global competitiveness index:

With the intensity of globalization and expansion of international businesses, technological
advancement of the economy is the primary requirement in order to compete and sustain in the
world market. when we look at the technological innovation and readiness of India,
developments in information and Communications Technology has been playing a major role
and as penetrated into all industrial sectors that has led to the better results of the
economy(Duraisamy & Nedunchezhian, 2015). Technological readiness can otherwise be
known as the level of Technical capability of the country and is calculated based on two things
namely technological adoption and ICT usage. India being a developing country has its own
constraints but still has made increase progress in the area of ICT and has made significant
contributions to the world.

Market size and global competitiveness index

In the case of closed economies the market size of an economy would have coincided with its
domestic markets. However in a globalized scenario, the countries market will not coincide with
its political borders but would include combination of domestic market and foreign market.
Market size of an economy according to the GCI, affects the productivity through two ways
namely economies of scale and it provide incentives for innovation. Market size allowed for
efficiency gains by allowing specialization as identified by Adam Smith and this enables the
large markets to take advantage of economies of scale(WEF-GCI, 2018). similarly in the
presence of larger markets companies have bigger incentives for generating innovative and new
ideas as the largest Rock of resources in the large market increases the possibility of finding new
ways to capitalize on the resources as more profits can be made when new ideas are sold in
larger markets. Large market size can also create positive externalities that emerge from the
accumulation of human capital and also from the transmission of technical knowledge.

India’s competitiveness in these efficiency enhancers:

According to the recent Global competitiveness report India has improved in its scores among
three main pillars of competitiveness that includes infrastructure which has improved by two
ranks ranking 66th among the 140 countries; in higher education and training by 6 ranks standing
at 75th among the 140 countries and also technological readiness up by three ranks Standing at
107th rank among 140 countries (Bhaskar, 2017). The improvements in this pillars reflect the
recent public investments in the efficiency enhancers.
India's competitiveness across the various years is being powered by giant market size, as an
asset is the third largest Market in the world after China and US according to the report. The
market size of the country is being credited as its major asset and India also ranks best among the
top 10 countries in its shareholder governance, GDP per capita, quality of research institutions
and also airport connectivity according to the GCI report.

Comparing India’s competitiveness with three other countries

United
Indicators India Kingdom China HongKong
Rank/1 Scor Rank/1 Scor Rank/1 Scor Rank/1 Scor
37 es 37 es 37 es 37 es
Global Competitiveness
Report 40 4.6 8 5.5 27 5 6 5.5
Basic Requirements 63 4.7 23 5.6 31 5.3 3 6.3
Efficiency Enhancers 42 4.5 5 5.6 28 4.9 4 5.6
Innovation and
sophistication factors 30 4.3 9 5.3 29 4.3 18 5

Comparing India with three other countries namely United Kingdom, China and Hong Kong, we
can see that India has ranked 40th among the 137 countries and United Kingdom has ranked 8th
among the 137 countries. China has ranked 27th and Hong Kong as a rank of 6th among the 137
countries. The maximum score that can be taken by the countries in the various indicators is 7
and among the four countries, the score for global competitiveness index is above or equal to 5
out of 7 for the other countries namely UK, China and Hong Kong while India scores behind
with 4.6 out of 7(Schwab, 2018).

With regard to basic requirements indicator India ranks 63 out of 137 countries while UK ranks
23 out of the 137 countries with a score of 5.6, China ranks 31st out of the 137 countries with a
score of 5.3 and Hong Kong ranks third out of the 137 countries with a score of 6.3. with regard
to the efficiency enhancers, among the four countries India ranks 42nd out of the 137 countries
with the score of 4.5 followed by China which ranks 28th with the score of 4.9, UK ranks 5th
out of the 137 countries with a score of 5.6 out of 7 and Hong Kong ranks 4th among the 137
countries with a score of 5.6 again. With regard to the innovation and sophistication factors
India ranks 30th out of the 137 countries with the score of 4.3, China ranks 29th the score of 4.3;
both India and China have the same score with regard to the animation and sophistication
factors. UK ranks 9th in this factor with a score of 5.3 while Hong Kong ranks 18th out of the
137 countries with a score of 5 out of 7.

Indicators India United Kingdom China Hong Kong

Rank/137 Scores Rank/137 Scores Rank/137 Scores Rank/137 Scores
Efficiency Enhancers 42 4.5 5 5.6 28 4.9 4 5.6
Higher Education and
Training 75 4.3 20 5.5 47 4.8 14 5.7
Goods market efficiency 56 4.5 10 5.3 46 4.5 2 5.7
Labour market efficiency 75 4.1 6 5.4 38 4.5 4 5.6
Financial market
development 42 4.4 13 5 48 4.2 5 5.5
Technological Readiness 107 3.1 4 6.3 73 4.2 9 6.2
Market Size 3 6.4 7 5.8 1 7 33 4.8
 Efficiency Enhancers
8
7
6
5
4
3 India
2
1 UK
0
China
HongKong

Comparing India’s competitiveness in Efficiency Enhancers

Among the four countries, for the three efficiency enhancers which we discussed above, India
ranks 75th, among the 137 countries with a score of 4.3. China ranks 47th out of the 137
countries with score of 4.8; while UK and Hong Kong has a better score of more than 5.5 and
have the ranks 20th for UK and 14th for Hong Kong. This shows that Hong Kong and UK are
better equipped higher education and Technical training which is vital for the economic
development and global competitiveness for an economy (Naqvi, 2016).

With regard to the technological readiness, India ranks 107 out of the 137 countries with a score
of just 3.1; while China ranks 73rd out of the 137 countries with a score of 4.2. Even in this
indicator both UK and Hong Kong has a score of more than 6.2 ranks of 4th for UK and 9th for
Hong Kong in the technological readiness index(Schwab, 2018).

With regard to the market size China stands first among the 137 countries with the score of 7 out
of 7 and India ranks the third out of the 137 countries with 6.4 as the score. UK ranks VII out of
the 137 countries with the score of 5.8 followed by Hong Kong ranking 33rd with a score of 4.8.
Summary and conclusion:
We have considered 3 efficiency enhancers in this task namely higher education and training,
technological readiness of the economy and also the market size. With regard to each of the
pillars in the Global competitiveness index the following points needs to be noted and has to be
worked upon for boosting the competitiveness of the country among the 137 countries. with
regard to the institutions India has to improve upon the reduction in the corruption rates as
investors still think that political instability and corruption as the major factors that hinder
International businesses. with regard to the infrastructure, India still has to work upon the
overall infrastructure and the quality of electricity supply throughout the country. with regard to
macroeconomic environment, that should be balanced budget and the government Debt must be
brought down to make the environment conducive.with regard to the health and primary
education India should improve in the infant mortality rate and life expectancy and also worked
on the basic education and well-being and health of individuals that pose obstacles to the
development of businesses. with regard to education and training then you should be
improvements on the Internet access in schools and better skill training facilities for the
workforce. In the goods market efficiency imports as the percentage of GDP as to be improved
and the number of procedures and days that are required to start a business should be brought
down. With regard to the labour market efficiency the strict labor regulations and poor work
ethics has to be handled efficiently in order to make it conducive for international businesses.
The ranking in the financial market development has also to be improved as it is a major
contributor for doing business in India. Technological readiness as we have discussed in the
above sections given as India has the large proportion of IT champions still lagging behind in the
technological readiness as it ranks 107 among the 137 countries. The one indicator which is
strength or an asset for the Global competitiveness for India is its market size as it has got a huge
market base that is inclusive of both foreign and domestic markets. Business sophistication and
innovations can lead to specialization and productivity gains and these two indicators indicate
increasing trend for India. India has been moving from a factor driven economy to the second
stage of efficiency enhancers’ economy though it has to improve in both of these indicators and
the relevant pillars in these indicators to move up on the ladder in the Global competitiveness
index.
References:

Bazargan, A., Ghasemi, R., Ardebili, M. E., & Zarei, M. (2017). The Relationship Between
“Higher Education and Training” and “Business Sophistication.” Econ. Rev (Vol. 21).
Retrieved from https://ier.ut.ac.ir/article_62106_f3b653dc00c42bc9e407082457b26845.pdf

Bhaskar, U. (2017). India improves on WEF’s global competitiveness rankings - Livemint.

Retrieved November 24, 2018, from
https://www.livemint.com/Politics/QdQ4zRhlA2GRT0pNSWktiN/India-improves-on-
WEFs-global-competitiveness-rankings.html

Duraisamy, S., & Nedunchezhian, V. R. (2015). A Study on the Impact of Technological

Readiness on Global Competitiveness Index. International Journal of Engineering and
Management Research Page Number, (4), 18–26. Retrieved from www.ijemr.net

Naqvi, R. (2016). GLOBAL COMPETITIVENESS AND INDIA : In International Conference

on Recent Innovations in sciences, management, education and technology.

Saunders, J., & Charles, B. (1985). Higher Education and Economic Revitalization. Management
Review, 74(4), 14. https://doi.org/10.1111/j.1467-9701.2010.01304.x

Schwab, K. (2018). The global competitiveness report 2016-17. World Economic Forum (Vol.
5). https://doi.org/92-95044-35-5

WEF-GCI. (2018). Market Size. Retrieved November 24, 2018, from

http://reports.weforum.org/global-competitiveness-report-2015-2016/market-size/