The goal of the World Economic Forum’s work oncompetitiveness is to contribute to a betterunderstanding of the key ingredients of economicgrowth and prosperity. By highlighting the strengthsand weaknesses of an economy, policy-makers,business leaders and other stakeholders are offeredan important tool for the formulation of improvedeconomic policies and institutional reforms.In order to assess national competitiveness, we usethe Global Competitiveness Index (GCI), whichmeasures the set of institutions, policies and factorsthat set the sustainable current and medium-termlevels of economic prosperity. The GCI is the mostcomprehensive competitiveness index to date,measuring both the macro- and microeconomicdrivers of productivity across a large number of countries.
The measurement of competitiveness represents acomplex undertaking; one cannot simply pinpointone or two areas as being critical for growth andprosperity. In this light, the GCI, with its nine distinctpillars, captures the idea that many differentelements affect competitiveness. These are identifiedas: institutions, infrastructure, the macroeconomy,health and primary education, higher education andtraining, market efficiency (goods, labour, financial),technological readiness, business sophistication andinnovation. Each of these pillars plays a critical rolein driving national competitiveness. The nine pillars are measured using both hard datafrom public sources (such as inflation, Internetpenetration and school enrolment rates) and datafrom the World Economic Forum’s Executive OpinionSurvey, which is conducted annually among topexecutives in all of the countries assessed. TheSurvey provides crucial data on a number of qualitative issues (e.g. corruption, confidence in thepublic sector, quality of schools) for which no harddata exist.
Another important characteristic of the GCI is that itexplicitly takes into account the fact that countriesaround the world are at different levels of economicdevelopment. What is important for improving thecompetitiveness of a country at a particular stage of development will not necessarily be the same for acountry in another stage. For example, whatpresently drives productivity improvements in theUnited States is different from what drives them in Turkey. In other words, economic developmentprogresses in stages. Thus, the GCI separatescountries into three specific stages: factor-driven,efficiency-driven and innovation-driven.
BASIC REQUIREMENTS1. Institutions2. Infrastructure3. Macroeconomy4. Health and Primary EducationKey forFACTOR-DRIVENeconomiesEFFICIENCY ENHANCERS5. Higer Education and Training6. Market Efficency (goods, labour, financial)7. Technological Readiness
INNOVATION & SOPHISTICATION FACTORS8. Business Sophistication9. Innovation
Figure 1. The Nine Pillars of Competitiveness
Source: The Global Competitiveness Report 2006-2007
Turkey’s Competitiveness in a European Context © 2006 World Economic Forum