Institutions, the macroeconomic environment, the efficiency of the labour market, the development of the financial market and innovation are the five components that most hinder competitiveness in Spain, according to the information contained in the competitiveness report of the World Economic Forum (WEF), which recently published the results of the 2017-2018 edition. On the contrary, infrastructures, health, elementary education and technological preparation are among the components that can best boost our economy in the coming years.
The WEF's Competitiveness Index report is based on three indices, composed of 12 competitiveness pillars that in turn develop multiple first and second level chapters. The computation of all of them results in a position in the global ranking of competitiveness. On this occasion, the institution places our country in 34th place, a significant drop from the 32nd position in the previous report.
El primer índice, titulado «Requisitos básicos», es en el que España obtiene mejor puntuación, un 5,2 sobre 7 (máximo), frente a los 4,8 puntos que obtiene en los «Potenciadores de la eficiencia» y los 4,2 en los «Factores de innovación y sofisticación». Sin embargo, con respecto al ranking global, es en el segundo bloque donde la economía española más destaca, ya que solo en este apartado obtiene la posición 30, frente a la 33 en el caso del primer índice y la 38 del tercero.
In addition to the verification of all these indices and their chapters, the table on the main factors that play against competitiveness is very interesting. In the case of our country, the main problem for doing business is the inefficiency of government bureaucracy, closely followed by taxes. Factors such as labour market regulation, insufficient capacity to innovate and access to finance also appear at the top of the table. Other aspects such as political instability, labour force mismatch or corruption also occupy their place in this table of constraining factors, but are not at the top of the table.
With regard to the main securities of the Spanish economy, the following should be mentioned:
- In Infrastructure it ranks 12th out of the 137 economies evaluated, although the main competitiveness factor, transport, has experienced a negative trend in recent years. If we focus only on strategic sectors such as electricity and telecommunications, the position is somewhat lower but still reasonably good: 22nd.
- In Health, the score is unchallenged: the maximum (7) with a sustained and unchanging character in recent years. And note: we are in fourth place globally in terms of life expectancy (83.4 years), behind only Hong Kong (84.3), Japan (83.8) and Italy (83.5). We Easterners and Mediterraneans can congratulate ourselves on these figures. We must be doing something right.
- In Education, although it obtains one of the best overall scores in the Spanish productive ecosystem, it cannot be overlooked that we are still in 47th place in the table; although the trend in recent years is undoubtedly positive.
- With regard to Technological Readiness, our greatest impetus comes from a reality that has been addressed on many occasions: the Spanish consumer is connected, and is becoming increasingly so. However, one thing is what the consumer does, and another is the business reality, which is lagging behind in the incorporation and adoption of new technologies. And watch out, because here the trend is negative.
In terms of the components in which Spain comes out worst, some notes can also be made:
- A dismal failure in innovation, with some chapters, such as the procurement of advanced technologies by public authorities, giving us a shameful position of 86 out of 137 economies evaluated. Our best performance in this area is in patents, where Spain is in 25th place, with an irregular evolution in recent years.
- In the institutional section, the slap in the face in the chapter on ethics and corruption is unavoidable: the WEF ranks Spain 76th in the world. In this sense, it is not surprising that we rank 65th in terms of influence peddling. But even worse is the chapter on the functioning of the public sector: 80th place.
- The macroeconomic environment is not good news either. In fact, it is the section where Spain occupies the worst position (90th), with chapters such as public debt, which rises to 122% of Gross Domestic Product and places us at the bottom of the global competitiveness league table: 122nd out of 137.
- In terms of the labour market, Spain also ranks at the bottom when it comes to hiring and firing practices (rank 115), or the fiscal effect on incentives to work (rank 99). In fact, the highest ranking in this area corresponds to the efficient use of talent, and only gives us a humble position of 60 out of 137.
The World Economic Forum's report deserves a thorough reading, not only to understand the national reality, but also to understand the inputs that play in favour of competitiveness worldwide, and even to detect market and investment opportunities for the coming years.
Photo by Alex Kotliarskyi on Unsplash
