The Key Factors of Economic Competitiveness

Omolola Lipede
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The Global Competitiveness Index is a yearly report published by the World Economic Forum. It measures the set of institutions, policies, and factors that set the sustainable current and medium-term levels of economic prosperity. The index is organised into 12 mainstays; institutions; infrastructure; ICT adoption; macroeconomic stability; health; skills; product market; labour market; financial system; market size; business dynamism; and innovation capability.

Competitiveness is achievable for all countries, provided the necessities are carried out. For countries that intend to set their path into competitiveness, these factors must be notable.

  1. Human capital development is ‘bae’:Physical capital was seen as a driver of growth, policy makers had always believed in accumulating capital through savings and investment. However, over the years accumulation of human capital was later seen as an engine of growth. According to World Bank, investing in a healthy, educated and resilient population is important to competing effectively in the global economy. Education, health and skills of a population are among the key drivers of productivity, mainly in the context of economic and technological transformations.
  2. Economic competitiveness goes beyond trade. Any economy open to trade, calls for more innovation. However, the concept of trade should move beyond just trade to the era of exchange of innovative ideas and expertise. There should be more alliance across borders.
  3. Technology offers a path to economic advancing: Technology is an important tool for growth and prosperity. In African countries, the benefits of technology as a means to economic advancing remain largely untapped. It is quintessential for African economies to provide greater knowledge on and access to ICTs to the majority of the populace
  4. Weak Institution is a cancan worm:Weak institutions continue to be the cancan worm hindering competitiveness, development and well-being in many countries. Any government concerned about economic competitiveness must pay serious attention to the institutions as a major source of efficiency.
  5. The soundness of infrastructure and the financial system. The quality of infrastructure and financial system is paramount to competitiveness. Basic elements of such infrastructure are still missing in many African economies, hampering their competitiveness. The financial system is also still an area of relative weakness for several economies; any economy that lacks sound financial system is vulnerable to unproductivity and retard growth.
  6. The need for a proactive and far-sighted leader. All above, economic competitiveness will remain a tale without a far-sighted and an intelligent leader. Setting longer-term priorities and enacting proactive efforts to create sustainable growth are hinged on the leaders. So, no economy improvement with a short-sighted individual or tyrant as a leader.

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