World Competitiveness Index 2022

World Competitiveness Index 2022

News: Recently, the annual World Competitiveness Index was released by the Institute for Management Development (IMD). IMD is a Swiss foundation, based in Switzerland, dedicated to the development of international business executives at each stage of their careers.

About:
• The IMD World Competitiveness Yearbook (WCY), first published in 1989, is a comprehensive annual report and worldwide reference point on the competitiveness of countries.
• It analyzes and ranks countries according to how they manage their competencies to achieve long-term value creation.

Parameters taken into Consideration:
• Economic Performance
• Government Efficiency
• Business Efficiency
• Infrastructure

How did India fare on each parameter?
• India has witnessed the sharpest rise among the Asian economies, with a six-position jump from 43rd to 37th rank on the, largely due to gains in economic performance.
• On the economic performance, India has improved its rank from 37th in 2021 to 28th in 2022.
• As far as Business efficiency is concerned, India saw a huge improvement from 32nd rank in 2021 to 23rd in 2022.
• Regarding government efficiency, we saw a marginal improvement from 46th in 2021 to 45th in 2022.
• There was no change in ranking on infrastructure front.

What are the reasons behind India’s improved rankings?
• Major improvements in the context of retrospective taxes in 2021
• Re-regulation of a number of sectors, including drones, space and geo-spatial mapping.
• Significant improvement in the competitiveness of the Indian economy
• India as a driving force in the global movement to fight climate change and India’s pledge of net-zero by 2070 at the COP26 summit also sits in harmony with its strength in environment-related technologies in the ranking.
• The top five attractive factors of India's economy for business are a skilled workforce, cost competitiveness, dynamism of the economy, high educational level and open and positive attitudes.

What factors are affecting competitiveness of economies?
• The report found that inflationary pressures are affecting the competitiveness of national economies along with Covid, and the invasion of Ukraine by Russia.
• The three most important trends found to be impacting business in 2022 are inflationary pressures (50%), geopolitical conflicts (49%) and supply chain bottlenecks (48%) with covid being the fourth (43%).