The World Economic Forum Global Competitiveness Report for 2011-2012

The World Economic Forum Global Competitiveness Report for 2011-2012 was released and it saw us jump a few spots. Excellent. Download it here ---> The Global Competitiveness Report 2011–2012. In the opening commentary, there was a nice summary of what you know already:

"Recent developments reinforce the observation that economic growth is unequally distributed and highlight the shift of balance of economic activity. On the one hand, emerging markets and developing economies, particularly in Asia, have seen relatively strong economic growth—estimated at 6.6 and 6.4 percent for 2011 and 2012, respectively, and attracting increasing financial flows. On the other hand, the United States, Japan, and Europe are experiencing slow and decelerating growth with persistent high unemployment and continued financial vulnerability, particularly in some European economies."

In measuring which country is where, the report segregates countries into three stages, and two in-between stages, of development. Stage one is titled factor driven economies, where you find the likes of Zimbabwe, Bangladesh, Lesotho, India, Pakistan and Kenya. Not great company to keep, but India are not bad company, probably means worse things about India than their peers! And then stage two, which is called efficiency driven economies, which is where we find ourselves in the company of the likes of Thailand, China, Indonesia, Colombia, Serbia and Romania.

In-between stage one and stage two there are countries like the Philippines, Egypt, Sri Lanka, Qatar and even Angola. Stage three, innovation driven economies, includes all the developed countries that you would expect, France, Germany, Hong Kong, Japan, Sweden, the UAE, even Portugal was on the list. The transition stage between the stage two and three includes Brazil, Chile, Mexico, Russia and Poland, that is the crowd that we want to be with. Top dog is no surprise I guess, Switzerland, who keep top spot. Singapore jumps Sweden to the silver medal, Sweden have to settle for bronze.

South Africa in 50th place is one ahead of Malta (where the poodles and rich English people live) and one behind Panama (where they have the most awesome canal). First things first, these are the problems identified by the respondents, about doing business in South Africa:

There are 12 pillars, with many sub sectors, but here are the main twelve: 1) Institutions, which includes subsectors like property rights, and organized crime and judicial independence. 2) Infrastructure, which is quite OK compared to the others, we are about in the middle. 3) Macroeconomic environment, again not bad, this includes credit rating, inflation, government debt and the like. 4) Health and primary education, phew, we score VERY poorly overall in this section. 5) Higher education and training was a mixed bag, the quality of the educational system, as well as math and science education is just awful, in the bottom ten whereas other sub sectors like quality of management schools, and extent of staff training, we find ourselves in the top twenty percent. 6) Goods market efficiency, half way through and we score very well in this section, we seem to have a much more sophisticated market than we think.

Next six, 7) Labor market efficiency, some awful, in the bottom ten percent out of 142, like Cooperation in labor-employer relations, Flexibility of wage determination, Hiring and firing practices and Pay and productivity and some not so bad, like reliance on professional management. 8) Financial market development, this is perhaps our best section by a country mile. Out of the 8 sub categories, we got 5 top ten spots, including three podium places. Excellent. 9) Technological readiness, not bad, better than you think, even though bandwidth and internet usage could be a whole lot better, but we score high in terms of technology being available to us. Ah yes, Apple stores. 10) Market size, small again, but we score well, in the top one third. 11) Business sophistication, again, we score really well here, well done business. Err... three cheers. And then last but not least, 12) Innovation, we score really well except in the category of availability of scientists and engineers, but I guess that ties into the poor stats on Education.

The places where we score really highly amongst all the nations are at "Strength of auditing and reporting standards" (we are top, numero uno in the whole world, as per this report), "Efficacy of corporate boards", we are number 2 in the world and "Protection of minority shareholders' interests", we are third in the world. Those are brilliant sub categories, be proud. When looking at these reports, it is often the respondents that form a view and then we are reliant on their answers, over the respondents in other countries. And of course the respondents are thanked for their help. Who are they, in a South African context? Here goes:

Business Leadership South Africa

Friede Dowie, Director

Michael Spicer, Chief Executive Officer



Business Unity South Africa

Coenraad Bezuidenhout, Executive Director for Economic Policy

Jerry Vilakazi, Chief Executive Officer

Make up your own mind about these folks.

So, if this report landed on my desk (which it did) what would I do, after having a look? Well, I would tackle education and health care, both of which look really poor. And labor (labour) relative to the rest of the world, there are some problems there. How do you tackle all these issues though? Well, our health minister is trying hard and seems to be serious, so good for him. How about education though? Because in my mind that is the key to solving most problems. There is nothing as key as education to the well being of a country, and their upliftment, and progress. Night schools, adult education, make it your goal that every capable adult must have a school leavers certificate. Because then we can have more engineers, teachers, scientists, all earning more than in low skilled jobs currently. That would be my one and only focus, because I believe that almost everything else would fall into place. What would you do?