The Glbal Cmpetitiveness Index What is Measured What is Glbal Cmpetitiveness Index (GCI) GCI is defined by the Wrld Ecnmic Frum. It is a set f institutins, plicies, and factrs that determine the level f prductivity f a cuntry, cnditins f public institutins and technical cnditins Data used in GCI Rating uses public accessible (statistic) datas (WB, IMF, etc.) and results f findings made by Wrld Ecnmic Frum. These findings are made annually with the supprt f partner institutins (research institutins and business centers) What GCI Reprt cntains GCI analysis the factrs that play significant rle in creating favrable business-climate envirnment in the cuntry and are imprtant fr cmpetitiveness and manufacture pint f view It cnsiders strength and weaknesses f a cuntry, identifies pririties fr the facilitatin f plitical refrms implementatin Hw many cuntries GCI Reprt encmpass The reprt 2013-2014 encmpasses 148 cuntries.
GCI - Ranking In 2013-2014, Gergia takes 72 nd psitin, its ranking scre amunts t 4,15 (middle indicatr) Gergia s Rating by Years Cmparisn f Gergia s Rating with ther Cuntries 94 86 87 90 90 90 93 88 77 72 Switzerland [5,67] Estnia [4,65] Azerbaijan [4,51] 1 32 39 Turkey [4,45] 44 Lithuania [4,41] 48 Latvia [4,40] 52 Russia [4,25] 64 Gergia [4,15] 72 Armenia[4,10] 79 Ukraine [4,05] 84
GCI Stages f Develpment What des factr grup cntain GCI cntains three stages f cuntry develpment: Factr-driven stage Efficiency-driven stage Innvatin-driven stage In the Glbal Cmpetitiveness Reprt 2013/2014 Gergia remains in the classificatin f Efficiency-driven (In 2011/2012 reprt, Gergia was in the classificatin f Transitin frm Stage 1 t Stage 2 ) Stages f Develpment GDP per capita (US$) Number f Cuntries I. Stage-Factr-driven Less than 2000 38 ecnmies Transitin frm Stage 1 t Stage 2 2,000-2,999 20 ecnmies II. Stage-Efficiency-driven 3,000-8,999 31 ecnmies (including Gergia) Transitin frm Stage 2 t Stage 3 9,000-17,000 22 ecnmies III. Stage-Innvatin-driven Mre than 17,000 US 37 ecnmies
GCI Sub-indexes & Pillars Three main stages f cuntry develpment cntain 3 sub-indexes, that are gruped int 12 pillars f cmpetitiveness Key fr Factr-Driven ecnmies Basic requirements 1. Institutins 2. Infrastructure 3. Macrecnmic envirnment 4. Health and primary educatin Key fr Efficiency-Driven ecnmies Efficiency enhancers 1. Higher educatin and training 2. Gds market efficiency 3. Labr market efficiency 4. Financial market develpment 5. Technlgical readiness 6. Market size Key fr Innvatin-Driven ecnmies Innvatin and sphisticatin factrs 1. Business sphisticatin 2. R&D Innvatin
Institutins Infrastructure Macrecnmic envirnment Health and primary educatin Higher educatin and training Gds market efficiency Labr market efficiency Financial market sphisticatin Technlgical readiness Market size Business sphisticatin innvatin GCI Ranking by Sub-indexes & Pillars In 2013-2014 Gergia s psitin cmpared t 2012-13: Sub-indexes 2006-2014 Basic requirements 57 th psitin with the scre f 4.74 (imprved by 7 steps) Efficiency enhancers 86 th psitin with the scre f 3.89 (imprved by 1 step) Innvatin and sphisticatin factrs 122 nd psitin with the scre f 3.08 (wrsened by 2 steps) 113 82 91 101103 109 117 121 117 120 122 87 91 87 85 89 95 94 86 89 87 86 64 57 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Basic requirements Efficiency enhancers Innvatin and sphisticatin factrs 140 120 100 80 60 40 20 0 64 56 61 70 Pillars, 2013-14 92 67 40 75 68 103 120 126 Basic requirements Efficiency enhancers Innvatin and sphisticatin factrs
GCI Indicatrs and Scres 12 pillars f cmpetitiveness are gruped int 3 factr grups, which encmpass 114 cmpnents. Pillars are measured by the scres frm 0 t 7, cmpnents - by the scres frm 0 t 100. frm 5.45 t 7 scre - very high indicatr frm 4.51 t 5.44 scre - high indicatr frm 3.51 t 4.50 scre - middle indicatr frm3.01 t 3.50 scre - law indicatr frm 0 t 3 scre - very law indicatr These cmpnents are divided int 2 directins: cmpetitive advantage cmpetitive disadvantage In 2013/2014 Out f 114 cmpnents, Gergia has cmpetitive advantage - in 30 cmpnents (24 cmpnents in 2012/2013) cmpetitive disadvantage - in 84 cmpnents (86 cmpnents in 2012/2013)
Factr Driven Basic Requirements Pillar I. Institutins 64 th psitin (verall scre - 4.00) This Pillar is measured by 21 cmpnents: Cmpetitive advantage - in 7 cmpnents: Diversin f public funds - 34 h place (4.5 scre) Burden f gvernment regulatin - 10 th place (4.4 scre) Transparency f gvernment plicymaking - 33 rd place (4.7 scre) Strength f investr prtectin - 19 th place (7.0 scre) Irregular payments and bribes - 28 th place (5.5 scre) Favritism in decisins f gvernment fficials 50 th place (3.4 scre) Reliability f plice services - 37 th place (5.2 scre) Cmpetitive disadvantage - in 14 cmpnents: Prperty rights 120 th place (3.4 scre) Intellectual prperty prtectin - 124 th place (2.7 scre) Public trust in pliticians 75 th place (2.9 scre) Judicial independence 91 st place (3.3) Efficiency f legal framewrk in settling disputes 92 nd place (3.4 scre) Efficiency f legal framewrk in challenging regulatins - 105 th place 3.0 scre) Wastefulness f gvernment spending 58 th place (3.4 scre) Business csts f crime and vilence 52 nd place (5.0 scre) Organized crime - 64 th place (5.2 scre) Ethical behavir f firms 67 th place (4.0 scre) Efficacy f crprate bards - 109 th place (4.1 scre) Prtectin f minrity sharehlders interests - 125 th place (3.4 scre) Business csts f terrrism - 76 th place (5.4 scre) Strength f auditing and reprting standards - 89 th place (4.4 scre) Pillar II. Infrastructure 56 th psitin (verall scre - 4.31) scre) This indicatr is measured by 9 cmpnents: Cmpetitive advantage - in 2 cmpnent: Quality f railrad infrastructure - 35 th place (3.9 scre) Fixed telephne lines/100 pp. 41 st place (29.6 scre) Cmpetitive disadvantage - in 7 cmpnents: Quality f verall infrastructure - 58 th place (4.6 scre) Quality f rads - 60 th place (4.2 scre) Quality f prt infrastructure - 68 th place (4.2 scre) Quality f air transprt infrastructure 84 th place (4.2 scre) Available airline seat km/week,millins - 109 th place (39.3 scre) Mbile telephne subscriptins/100 pp. 74 th place (109.2 scre) Quality f electricity supply 52 nd place (5.3 scre)
Factr Driven Basic Requirements Pillar III. Macrecnmic Envirnment 61 st psitin (verall scre - 4.91) This pillar is measured by 5 cmpnents: Cmpetitive advantage - in 2 cmpnent: Gvernment budget balance,% f GDP - 38 th place (-0.8 scre) Gvernment debt,% f GDP 44 th place (32.7 scre) Pillar IV. Health and Primary Educatin 70 th psitin (verall scre - 5.75) This pillar is measured by 10 cmpnents: Cmpetitive advantage - in 4 cmpnent: HIV prevalence,% adult pp. - 45 th place (0.20 scre) Business impact f malaria 1 st place (scre N/A) Malaria cases/100,000 pp - 1 st place (0.0 scre) Primary educatin enrllment 32 nd place (98.1 scre) Cmpetitive disadvantage - in 6 cmpnents: Cmpetitive disadvantage - in 3 cmpnents: Grss natinal savings,% f GDP 98 th place (14.9 scre) Inflatin, annual % change 81 st place (-0.9 scre) Cuntry credit rating 80 th place (39.2 scre) Business impact f tuberculsis 79 th place (5.4 scre) Tuberculsis incidence - 96 th place (107 scre) Business impact f HIV/AIDS - 70 th place (5.5 scre) Infant mrtality - 87 th place (18.3 scre) Life expectancy 81 st place (73.3 scre) Quality f primary educatin 94 th place (3.4 scre)
Efficiency Driven - Efficiency Enhancers Pillar V. Higher Educatin and Training 92 nd psitin (verall scre - 3.79) Pillar VI. Gds Market Efficiency 67 th psitin (verall scre - 4.29) This pillar is measured by 8 cmpnents: Cmpetitive disadvantage - in 8 cmpnents: Secndary educatin enrllment - 80 th place (86.2 scre) Tertiary educatin enrllment - 77 th place (30.0 scre) Quality f math and science educatin - 106 st place (3.4 scre) Internet access in schls 62 nd place (4.5 scre) Availability f research and training services - 130 th place (3.3 scre) Quality f the educatinal system - 105 th place (3.2 scre) Quality f management schls - 107 th place (3.7 scre) Extent f staff training 107 th place (3.6 scre) This pillar is measured by 16 cmpnents: Cmpetitive advantage - in 9 cmpnents: Extent f taxatin n incentives t invest - 24 th place (4.4 scre) Ttal tax rate, % prfit - 10 th place (16.5 scre) Number f prcedures t start a business - 3 rd place (2 scre) Number f days t start a business - 2 nd place (2 scre) Prevalence f trade barriers 10 th place (5.1 scre) Trade tariffs, % duty 32 nd place (1.1 scre) Burden f custms prcedures 12 th place (5.3 scre) Imprts as a percentage f GDP 46 th place (58.2 scre) Business impact f rules n FDI 49 th place (4.8 scre) Cmpetitive disadvantage - in 7 cmpnents: Extent f market dminance 119 th place (3.2 scre) Intensity f lcal cmpetitin 123 rd place (4.3 scre) Effectiveness f anti-mnply plicy 138 th place (3.1 scre) Agricultural plicy csts - 125 th place (3.2 scre) Degree f custmer rientatin - 127 th place (3.8 scre) Buyer sphisticatin - 94 th place (3 scre) Prevalence f freign wnership 106 th place (3.2 scre)
Efficiency Driven - Efficiency Enhancers Pillar VII. Labr Market Efficiency 40 th psitin (verall scre - 4.59) This pillar is measured by 10 cmpnents: Cmpetitive advantage - in 4 cmpnent: Flexibility f wage determinatin 47 th place (5.3 scre) Hiring and firing practices - 13 th place (4.8 scre) Redundancy csts, weeks f salary - 14 th place (4.3 scre) Effect f taxatin n incentives t wrk 29 th psitin (4.2 scre) Cmpetitive disadvantage - in 6 cmpnents: Cperatin in labr-emplyer relatins - 63 rd place (4.3 scre) Pay and prductivity 60 th place (4.1 scre) Reliance n prfessinal management - 82 nd place (4.1 scre) Wmen in labr frce, rati t men 82 nd place (0.77 scre) Cuntry capacity t retain talent 93 rd place (3.1 scre) Cuntry capacity t attract talent 105 th place (2.8 scre) Pillar VIII. Financial Market Develpment 75 th psitin (verall scre - 3.91) This pillar is measured by 8 cmpnents: Cmpetitive advantage - in 1 cmpnent: Legal rights index - 12 th place (9 scre) Cmpetitive disadvantage - in 7 cmpnents: Availability f financial services - 96 th place (4.0 scre) Financing thrugh lcal equity market - 126 th place (2.4 scre) Ease f access t lans 98 th place (2.5 scre) Venture capital availability - 106 th place (2.3 scre) Sundness f banks - 82 nd place (4.8 scre) Regulatin f securities exchanges - 119 th place (3.2 scre) Affrdability f financial services 83 rd place (4.0 scre)
Efficiency Driven - Efficiency Enhancers Pillar IX. Technlgical Readiness 68 th psitin (verall scre 3.83) This pillar is measured by 7 cmpnents: Cmpetitive advantage - in 1 cmpnent: Mbile bradband subscriptins - 48 th place (20.5 scre) Int l internet bandwidth, kb/s per user 40 th place (54.2 scre) Cmpetitive disadvantage - in 6 cmpnents: Availability f latest technlgies - 100 th place (4.4 scre) Firm-level technlgy absrptin 117 th place (4.1 scre) FDI and technlgy transfer - 101 st place (4.1 scre) Individuals using internet,% - 71 st place (45.5 scre) Fixed bradband internet subscriptins/100 pp - 65 th place (9.1 scre) Mbile bradband subscriptins/100 pp- 65 th place (22.4 Pillar X. Market Size 103 rd psitin (verall scre - 2.96) This pillar is measured by 4 cmpnents: Cmpetitive disadvantage - in 4 cmpnents: Dmestic market size index 102 ) nd place (2.8 scre) Freign market size index - 114 th place (3.5 scre) GDP (PPP$billins) 104 th place (26.7 scre) Exprts as a percentage f GDP 97 th place (30.2 scre) scre)
Innvatin Driven - Innvatin & Sphisticatin Factrs Pillar XI. Business Sphisticatin 210 th psitin (verall scre - 3.47) This pillar is measured by 9 cmpnents: Cmpetitive disadvantage - in 9 cmpnents: State f cluster develpment - 116 th place (3.2 scre) Lcal supplier quality - 129 st place (3.6 scre) Lcal supplier quantity - 136 th place (3.7 scre) Nature f cmpetitive advantage - 91 st place (3.3 scre) Value chain breadth - 96 th place (3.5 scre) Cntrl f internatinal distributin 103 rd place (3.7 scre) Prductin prcess sphisticatin - 119 th place (3.2 scre) Extent f marketing - 107 th place (3.6 scre) Willingness t delegate authrity - 127 th place (3.1 scre) Pillar XII. R&D Innvatin 126 th psitin (verall scre - 2.68) This pillar is measured by 7 cmpnents: Cmpetitive disadvantage - in 7 cmpnents: Capacity fr innvatin 118 th place (3.0 scre) Quality f scientific research institutins 124 th place (2.8 scre) Cmpany spending n R&D - 128 th place (2.5 scre) University-industry cllabratin in R&D 132 nd place (2.7 scre) Availability f scientists and engineers - 126 th place (3.2 scre) PCT patents, applicatins/mln. pp 62 nd place (1.4 scre) Gvernment prcurement f advanced technlgy prducts 62 nd place (3.6 scre)
GCI Prblematic Factrs fr Ding Business The Mst Prblematic Factrs fr Ding Business Access t financing Inadequately educated wrkfrce Pr wrk ethic in natinal labr frce Plicy instability Insufficient capacty t innvate Inadequate supply f infrastructure Gvernment instability/cups inefficient gvernment bureaucracy Tax rates Tax regulatins Restrictive labr regulatins pr public health Crruptin Inflatin Crime and theft Freign currency regulatins 1,4 1,3 0,8 0,5 0,3 3,5 4,7 5,3 5,3 7 6,8 7,8 10 12,2 14,2 19
Partner Organizatin in Gergia - Business Initiative fr Refrms in Gergia Business Initiative fr Refrms in Gergia (BIRG) BIRG - Nngvernmental, nn-prfit Think Tank, aiming at rganizing public debates with the aim t prmte plitical refrms in the cuntry. BIRG mainly fcuses n macrecnmic basis and ther cncrete directins which are inevitable precnditins fr cmpetitiveness and sustainable ecnmic develpment BIRG actively cperates with the Wrld Ecnmic Frum which has cvered Gergia in its Glbal Cmpetitiveness reprt BIRG was an initiatr f invlving Gergia in the reprt f GCI. Fr achieving abve-mentined gal, BIRG became a partner institutin f Wrld Ecnmic Frum. BIRG is respnsible fr carrying ut the Executive Opinin Survey f leading cmpanies in Gergia Financial assistance Eurasia Fundatin American Gergian Business assciatin Prgram f the EU Business Advisry Service TBC Bank Cmpany f mineral waters f Gergia GMT grup Agritechnics The Fund f Municipal Develpment f Gergia BIRG : Funding members Tamara Janashia - Executive Directr Giga Makharadze - Funding Member f the Bard Directrs Mamuka Tsereteli - Funding Member f the Bard Directrs