adminDr Gift Mugano Correspondent
Globalisation, fuelled by rapid technological change, shrinking economic distance and sweeping trade liberalisation, has led to an increasingly complex competitiveness landscape.
Policy-makers are struggling to find ways to manage present economic challenges, and developed economies worry about maintaining their technological lead and staying ahead of lower wage entrants, while less developed economies worry about reviving their economies and diversifying their activities so they can challenge mature industrial countries.
National competitiveness reports are an important tool, therefore, to identify and overcome these challenges. They create an informed dialogue for policy-makers attuned to enhancing the economic performance of nations and regions.
The Government of Zimbabwe is currently working on the development of the National Competitiveness Report which is anticipated to be launched early October this year. At the same time, the Government is currently finalising the establishment of the National Competitiveness Commission.
This is ground breaking for Zimbabwe. As a matter of fact, Zimbabwe is the fourth country to undertake the National Competitiveness Report after Egypt, Tanzania and Senegal. With respect to the National Competitiveness Commission, Zimbabwe is second in Africa to establish the National Competitiveness Commission after Egypt.
In order to bring everyone to speed with the importance of the developments for Zimbabwe, this week’s discussion will be centred on the role of the National Competitiveness Reports in fostering inclusive growth.
Traditionally, the purpose of a National Competitiveness Report (NCR) is to inform by analysing a region or nation’s current economic standing and assessing how it performs relative to other countries in selected criteria and measures of competitive prowess. NCRs also raise public awareness of the critical link between a nation’s competitiveness and its public well-being. Over time, the scope of NCRs has evolved significantly, from a simple global benchmarking tool into an agile tool kit for National Competitiveness Councils/Commissions (NCCs) to influence policy and steer their initiatives.
NCRs are valuable reference documents often cited in developing policy and serve as a platform for NCCs to make specific policy recommendations and clearly articulated broad goals to improve a nation’s well-being, such as social inclusion and sustainability. Additionally, NCRs play an important role in guiding the types of activities NCCs might want to participate in by giving perspectives and advice to existing council initiatives and incubating new projects focused on a nation’s productivity drivers.
NCRs also serve as a tool for measuring the impact of a council’s work to help build credibility and formulate a convincing case for its recommendations. NCRs can also provide an annual report card on the competitiveness of a given economy, thereby informing and improving the quality of public-private dialogue.
It is important to recognise that NCRs are not only produced by NCCs; other groups and players such as government ministries, business associations, think tanks and more play a large role in a country’s competitiveness landscape. To that end, NCRs may serve as an important tool for other actors in the economy and society as well, especially in those countries where an NCC may not yet exist. In fact, NCRs can often serve as a jumping off point for the formation of an NCC.
NCRs serve as comprehensive toolkits for NCCs. As such, in countries where such reports are produced, the NCCs have spent great deal of time in utilising the report than mere benchmarking against other economies. In order to maximise the impact of NCRs, countries have developed a list of objectives to support the organisation’s/NCC’s mission.
Standard examples of objectives of the NCRs are:
◆ To guide policy-makers
◆ To stimulate dialogue between private sector leaders and their Governments
◆ To stimulate economic research in universities and think tanks
◆ To introduce accountability for implementation of policies and initiative by providing an annual “dashboard” for measuring competitiveness improvements
◆ To mobilise popular understanding and support for competitiveness-related reforms
Credibility is essential to producing a successful report; building the right team lays the foundation for developing a high quality and credible report. Convening leaders from industry, academia and government will ensure the most authoritative and comprehensive competitiveness metrics to gauge competiveness, as well as build credibility.
Additionally, galvanising this coalition as a mode of outreach will enhance visibility of the report in their respective sectors and to the public. This is an all inclusive engagement with all stakeholders in policy making which obviously build a shared vision and consensus which is critical requirement for policy implementation.
The process of formulating the metrics for NCRs involves the use of data when selecting indicators. The data is analysed within a reasonable historical context to measure changes over a relevant time period. In most cases, in order to ensure credibility, when feasible, the report should include data from authoritative sources like the World Bank. It is common for NCRs to require data not readily available, such as surveys but again the methodology should be robust and credible.
There are two different methodology frameworks used in developing competitiveness reports: an index or a scorecard. Both are commonly customised in competitiveness reports to produce hybrid models. Normally, the methodology selected coincides with the purpose and objectives of the report; some are useful to simply inform while others are intended to both inform and provide targeted recommendations.
With respect to an index, a single ranking of the economies formulated from the aggregation of the indicators and analysis. An index is commonly used in competitiveness reports to simply inform the public of the competitive landscape, and do not necessarily provide targeted recommendations.
An example of an index is the World Economic Forum’s Global Competitiveness Index, which is found within the Global Competitive Report. This is the most comprehensive index of its kind covering roughly 140 countries. It is often used as a starting point and reference for countries embarking on developing national competitiveness reports.
A scorecard provides both a snapshot about an economy’s competitive standing, as well as ranks the economy within each indicator. This methodology is useful for competitiveness reports because it identifies an economy’s competitive challenges and formulates targeted and actionable recommendations to address and track the challenges. Examples of scorecard methodology include Ireland’s Competitiveness Scorecard and the United States Competitiveness Index, which were created by their respective NCCs.
Naturally, the results of the NCRs can be summarised as strengths and weaknesses for the country. It is important to note that the NCRs does not provide recommendations for the country BUT analytical underpinnings from which recommendations to improve competitiveness can be made. Specific recommendations will be developed for Government, industry, academia and labour groups for them to develop a comprehensive strategy for enhancing competitiveness in their respective constituencies. This process brings in ownership and incentives to successfully implement policies.
NCR carries actionable recommendations and target leaders in government, academia and industry to effect change. In most cases, the recommendations will be balance in both long-term and short-term strategies. In many cases some recommendations will call for legislative change which takes a bit of time, it is important to also develop recommendations that have a quick and measurable impact to build momentum for change.
Even more important than producing a credible and high quality competitiveness report, is how it is used. NCRs can contribute to shaping the agenda for policy dialogue and encouraging government-industry-university initiatives. Countries which successfully carried out NCRs like Egypt, Ireland and USA developed an ambitious outreach are essential programme for effective dissemination and communications strategy.
Unlike other reports like academic papers, NCRs are used to raise public awareness of the critical link between competitiveness and public well-being. As a result, they are written in non-technical language and adopt an objective tone based on facts and evidence to stimulate dialogue. Unlike academic papers which are rigour, NCRs considers the desired audiences targeted and craft customised messages outlining findings and recommendations for specific target groups. Because most policy-makers will not spend the time to read an extensive report, NCRs have a condensed summary, highlighting important findings and recommendations in their field as an insert.
NCRs once developed are used as an important tool to market the country’s assets or opportunities for investors. Hence, in order to reach a wider audience, a mix of products should be created in addition to a NCR.
A competitiveness council or other relevant bodies within the competitiveness landscape (i.e. business associations, Government ministries, etc), publishes condensed summaries of findings and recommendations, as well as utilise social media, interactive websites or web applications.
NCCs normally carry out workshops at industry councils, university faculties, research institutes or Government agencies. In countries with NCRs/NCC such as Egypt, they have shared their NCRs at regional conferences and events to support a country’s brand and inform potential trade and investment partners.
The release of an NCR and the subsequent outreach strategy is extensive. The initial release of the report is a high-profile event, with leaders from Government, industry and academia in attendance.
Following the launch of the report, leaders are briefed on the key findings and recommendations.
This could consist of a series of town hall meetings and workshops, as well as regional conferences and events. This process in itself brings inclusivity and a shared vision for the nation.
Lastly, the most interesting feature of the NCR is that it carries letters of endorsement: from the President of the country, chairman of the sponsoring organisation, and, if relevant, the prime minister, finance or trade minister, or respected private sector leader or representatives of the trade union.
This in itself brings unity of purpose since these players participate in the social contract.
- Dr Mugano is an economic advisor, trade and competitiveness expert, and Research Associate at Nelson Mandela Metropolitan University (SA) Feedback: Email: [email protected] , cell: +263 772 541 209.
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