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    World Economic Forum publishes Global Competitiveness Report

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    Date:18 December 2020 
    Source: NCPC
    Topics: Other Reports

    The World Economic Forum have published a special edition of the Global Competitiveness Report that focuses on how countries are performing on the road to recovery in the face of COVID-19.

    The report discusses the importance of Government policy in the short- and medium- term. In the short-term, governments can take action to support economic recovery. In the medium-term, governments can intervene to help transform economies and expand their focus beyond a return to growth and consider how to “build back better”.

    The report analyses four broad thematic areas which it sees as the key building blocks of an economy:

    • Enabling Environment - which includes an economy’s formal and informal institutions, utilities and infrastructure, and, the framework conditions set by monetary and fiscal policy.
    • Human Capital – this is the capabilities and skills of individuals and populations and can be developed by ensuring individuals are able to sustain good health and have in-demand skills and capabilities.
    • Markets – competitive markets are the building blocks of a functioning economy, but there are cases where markets fail to produce the best outcomes. The WEF notes that this can happen when there is concentrated market power, incomplete information, or externalities.
    • Innovation ecosystem – this is the complex process of developing ideas, translating these ideas into products and services, and then commercializing these products on a large scale. It depends on multiple factors, such as a business culture that rewards entrepreneurship, risk-taking and a will to embrace change.

    The report also presents a preliminary assessment of countries’ readiness to achieve future transformation across all four thematic areas. Ireland performs relatively well on these indicators, but there are areas where Ireland scored below the mean, from a sample of 37 countries. Ireland performed particularly well in the indicators capturing economic infrastructure (e.g., electricity and ICT) and long-term investment. However, the report also suggests that Ireland underperformed in several indicators: (i) social infrastructure (eldercare, childcare, healthcare); (ii) competition policy; and, (iii) research and innovation.

    For the most part, these perceived strengths and weaknesses – and the policy solutions to overcome these issues – overlap with the recommendations that the National Competitiveness and Productivity Council have made to Government in a number of previous Council publications, and most recently set out in the Competitiveness Challenge 2020, and will be important to consider going forward.

    For example, in the Competitiveness Challenge 2020, not only did the Council underlined the short-term need for stronger supports for those looking for employment, and increased capacity in the system to deal with the higher numbers of jobseekers, but it also underlined the important role that digital and management skills will play in the future, and the need to address further specific skills needs arising from the COVID-19 pandemic (Recommendations 2.1– 2.5), see here for further details.

    Finally, unlike previous editions of the Global Competitiveness Report, this special edition does not provide country competitiveness rankings, due to the absence of key data from various international organisations, as well as the need for new thinking regarding the economic recovery after the COVID-19 shock.

    The full report can be found here.