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:: Conclusion of work

The World Economic Forum Global Competitiveness Report for 2018 was presented by IUET and Deloitte in Stockholm on 17th October, 2018. That edition had been developed using a partly new methodology which put greater weight on economies' readiness to adopt and handle the challenges of the future, social capital, endowment of disruptive businesses and debt concerns, among other indicators, as the change was described by the World Economic Forum in its communication of that year’s report.

Following completion of work on the 2018 report, in December that year IUET terminated its agreement with the World Economic Forum to serve as Swedish Partner Institute with the Institute of the Centre for Global Competitiveness and Performance of the World Economic Forum (WEF). The successful collaboration of the last six years with Deloitte on this project, was concluded as well.

While IUET continues to be generally supportive of the benchmarking work of the World Economic Forum, two concerns were raised in regard to the direction in which the benchmarking developed.

First of all, as the World Competitiveness Report had demonstrated a couple of years earlier, the performance of some countries’ apparent competitiveness changes significantly to the extent that social and environmental sustainability is taken into account. A previous report made a strong case for the mainstream index to be adjusted by taking such aspects into account. Recent developments worldwide have, if anything, made these aspects even more critical.

With the 2018/2019 report having undertaken the first major revision of the way Competitiveness is calculated, an improvement had been expected in this respect. Conversely, some of the adjustments that were undertaken, in effect meant that the size of a national economy has been awarded greater weight as a factor of its own. This is, if anything, an anomaly. The size of an economy matters the most in the presence of barriers to cross-border exchanges, but a larger economy can serve as a drag on reforms in support of openness. To the degree that size matters, it should show up in other, actual performance indicators, not weigh in as a factor of its own.

As a consequence of the World Economic Forum adjustment of how is index was calculated, the ranking of countries such as the US, China, India and Brazil were arbitrarily upgraded, relative to other countries, when comparing with the way the index had operated in previous decades.

In the light of the adjustments that were not undertaken, and those that were, an opportunity to produce a more meaningful measurement and provide better guidance of policies around the world at the time when this is much needed, had been lost. IUET management thus took the step to terminate its role as Swedish partner institute.