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TAMÁS NOVÁK Global Business Environment

TAMÁS NOVÁK Global Business Environment. Development and competitiveness indicators. Readings. Human Development Report 2009 . http://hdr.undp.org/en/media/HDR_2009_EN_Overview.pdf http://hdr.undp.org/en/media/HDR_2009_EN_Indicators.pdf

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TAMÁS NOVÁK Global Business Environment

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  1. TAMÁS NOVÁK Global Business Environment Development and competitiveness indicators

  2. Readings Human Development Report 2009. http://hdr.undp.org/en/media/HDR_2009_EN_Overview.pdf http://hdr.undp.org/en/media/HDR_2009_EN_Indicators.pdf Poverty Facts and Stats http://www.globalissues.org/article/26/poverty-facts-and-stats

  3. The World economy according to development level Before1989 Today Developed market economies Developed market economies („first world”) Socialist economies Countries in transition(„second world”) NICs Developing countries Oil exporting countries(„third world”) Middle income countries Low income countries LDCs

  4. Export oriented industrialisation: the East Asian miracle Successful path of industrialisation – via export of manufactured goods HPAE (High Performing Asian Economies) or NIC (Newly Industrialised Countries: 1. Hong-Kong, Taiwan, Singapour, South Korea

  5. Export oriented industrialisation: the East Asian miracle 2. Malaysia, Indonesia, Thailand, Philippines 3. China, Vietnam High growth rates, open to international trade Other factors: • high saving rates • rapid improvement in education

  6. Measuring economic development and backwardness I. • Static and dynamic indicators; • Economic performance; • Structure; • External trade; • Infrastructure; • Society, demography, health care; • Competitiveness.

  7. Measuring economic development and backwardness II. „Human development index” (UNCTAD): composition of three basic indicators • GNI (PPP); • Life expectancy at birth; • Adult literacy rate, combined gross enrolment ratio.

  8. Income disparities in the world economy, TOP15 countries (HDI Report 2009)

  9. Income disparities in the world economy, some CEE countries and the last 5 (HDI Report 2009)

  10. Indicators of inequality

  11. Indicators of inequality Lorenz curve • Percentage of households is plotted on the x-axis, the percentage of income on the y-axis. • Every point on the Lorenz curve represents a statement like "the bottom 20% of all households have 10% of the total income." • Perfectly equal income distribution would be one in which every person has the same income. In this case, the bottom "N"% of society would always have "N"% of the income. This can be depicted by the straight line "y" = "x"; called the "line of perfect equality. • By contrast, a perfectly unequal distribution would be one in which one person has all the income and everyone else has none. In that case, the curve would be at "y" = 0 for all "x" < 100%, and "y" = 100% when "x" = 100%. This curve is called the "line of perfect inequality

  12. Indicators of inequality Gini coefficient: • It is the area between the line of perfect equality and the observed Lorenz curve, as a percentage of the area between the line of perfect equality and the line of perfect inequality. • The higher the coefficient, the more unequal the distribution is.

  13. Explanations of poverty • Demography; • Dual economic structure; • Problems with agriculture, worsening terms of trade; • Mistakes in economic policy.

  14. Dual economy The division of a single economy into two sectors that appear to be at a very different levels of development (e.g. a modern, capital-intensive, high wage industrial sector and a very poor traditional agricultural sector) is referred to as economic dualism.

  15. Some facts on differences of development • 80-85% of world population live in less developed countries and gets less than 20% of total income; • Ratio between average incomes in most developed and least developed countries has increased in the last 200 years: 1820 – 3:1; 1913 – 11:1; 1950 – 35:1; 1970 – 44:1; 2002 – 82:1; • 1,3 billion people live on less than 1 dollar per day.

  16. Some facts on differences of development • More than 800 million people are threatened continuously by hunger; • 35% world population (above 18) is illiterate; • Migration due to wars and political abuses; • Cumulative process of indebtedness.

  17. GDP per capita at PPP

  18. Gross domestic expenditure on R&D in the EU(Percentage of GDP) Source: Eurostat

  19. Employment rate (age group: 15-64, 2000 és 2007 (%) Source: Eurostat

  20. Definitions of competitiveness (WEF) Country-level / macroeconomic competitiveness World economic Forum (WEF): • Institutions, policies and factors influencing productivity and growth potential of a given country.

  21. Pillars of competitiveness (WEF) • Basic requirements: 1. Institutions; 2. Infrastructure; 3. Macroeconomic stability; 4. Health and primary education. Key for factor-driven economies

  22. Pillars of competitiveness (WEF) • Efficiency enhancers: 5. Higher education and training; 6. Goods market efficiency; 7. Labour market efficiency; 8. Financial market sophistication; 9. Technological readiness; 10. Market size. Key for efficiency-driven economies

  23. Pillars of competitiveness (WEF) • Innovation and sophistication factors: 11. Business sophistication; 12. Innovation. Key for innovation-driven economies.

  24. Global competitiveness rankings WEF: Global Competitiveness Report 2009-2010 133 countries 110 „hard” (statistical) and „soft” (based on questionnaire) data Global Competitiveness Index, GCI

  25. WEF competitiveness ranking, 2009-2010

  26. WEF competitiveness ranking, 2009-2010

  27. Definitions of competitiveness (IMD) International Institute for Management Development: The IMD World Competitiveness Yearbook (WCY) is the world’s most renowned and comprehensive annual report on the competitiveness of nations, ranking and analyzing how a nation’s environment creates and sustains the competitiveness of enterprises.

  28. Group of competitiveness factors (IMD) • Economic performance: 1. Domestic economy; 2. International trade; 3. International investment; 4. Employment; 5. Prices. • Government efficiency: 6. Public finance; 7. Fiscal policy; 8. Institutional framework; 9. Business legislation; 10. Societal framework.

  29. Group of competitiveness factors (IMD) • Business efficiency: 11. Productivity; 12. Labour market; 13. Finance; 14. Management practices; 15. Attitudes and values. • Infrastructure: 16. Basic infrastructure; 17. Technological infrastructure; 18. Scientific infrastructure; 19. Health and environment; 20. Education.

  30. Critics Krugman : International competitiveness today can not be understand at country level, but rather between enterprises. Competitiveness = productivity

  31. IMD: World Competitiveness Yearbook 2009 57 countries 329 „hard” and „soft” data Value: 0-100 World Competitiveness Score, WCS

  32. IMD competitiveness ranking, 2009

  33. Dynamic indicator. Per capita GDP at PPP, 2000 and 2008 (EU-27 average = 100.0) Source: Eurostat

  34. FDI-import stock, 2000 and 2008 (USD million) Source: UNCTAD

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