Global Competitiveness Index 2023

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.

Factors: It measures the prosperity and competitiveness of countries by examining the Four factors (334 competitiveness criteria):

• Economic performance
• Government efficiency
• Business efficiency
• Infrastructure

Top Global Performers:

• Europe: Denmark has moved to the top of the 63-nation list from the third position last year, while Switzerland slipped from the top ranking to the second position and Singapore regained the third spot from fifth.
• Asia: The top-performing Asian economies are Singapore (3rd), Hong Kong (5^th), Taiwan (7^th), China (17^th), and Australia (19^th).
• Others: Both Russia and Ukraine were not assessed in this year’s edition due to the limited reliability of the data collected.
• India, despite experiencing a slight drop of three ranks, finishes in 40th place in 2023 from the 37th position in the 2022 Global Competitiveness Index, indicating an improvement compared to its consistent 43rd position between 2019 and 2021. The IMD report highlights several areas of advancement and challenges faced by India in its pursuit of competitiveness.

India’s Performance:

• Performance on four Parameters:
  • Economic performance: It has improved from 37^th in 2021 to 28^th in 2022.
  • Government efficiency: It has improved from 46^th in 2021 to 45^th in 2022.
  • Business efficiency: It saw a huge improvement from 32^nd rank in 2021 to 23^rd in 2022.
  • Infrastructure: It on the other hand, saw no change at 49.
• Reasons for India’s Good Performance:
  • 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.
• India’s Weaknesses:
  • The challenges that India faces include managing trade disruptions and energy security, maintaining high GDP growth post the pandemic, skill development and employment generation, asset monetisation and resource mobilisation for infrastructure development.
• India’s Strengths:
  • 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.

Steps taken by India to Increase its Competitiveness:- 

• Towards Increasing Manufacturing Capacity: India has made appreciable efforts to ensure resilience in manufacturing capacity such as via Atmanirbhar Bharat and Make in India initiatives which are aimed at domestic supply chains and heavy investment in manufacturing hubs.
• The government has introduced the Production-Linked Incentive (PLI) Scheme in various sectors for enhancing India’s manufacturing capabilities and exports.
• Technological Advancement: To facilitate technological advancement for increasing competitiveness, India’s Department of Telecom (DoT) has constituted six task forces on 6G technology.
• The Ministry of External Affairs, through its New, Emerging And Strategic Technologies (NEST) division is also ensuring India’s active participation in international forums on technology governance.
• It acts as the nodal division within the ministry for issues pertaining to new and emerging technologies and assists in collaboration with foreign partners in the field of technology
• A nation that ensures balance between economic and social progress can enhance its productivity, followed by creating competitiveness and thus, prosperity.
• Therefore, it is necessary to create an environment which not only pushes the businesses to compete successfully in local as well as international markets but ensures that the average citizen’s standard of living also improves.
• Governments need to provide an environment characterized by efficient infrastructures, institutions and policies that encourage sustainable value creation by the enterprises.