GLOBAL COMPETITIVENESS INDEX 2019 BY CHULALONGKORN BUSINESS SCHOOL9 October 2019

Event Calendar Press Releases Wednesday October 9, 2019 14:27
Bangkok--9 Oct--Maxima Consultants Company
Chulalongkorn Business School, Chulalongkorn University, announces World
Economic Forum (WEF) Global Competitiveness Index (GCI) rankings for 2019 Thailand's ranking improves but further improvements are needed in order to reach the same level of competitiveness as other countries

Chulalongkorn Business School (CBS), the only university in Thailand with an official alliance with the WEF, has published the 2019 GCI rankings. The annual rankings assess the competitive positions of nations around the world.

Assistant Professor Wilert Puriwat, Dean of Chulalongkorn Business School, said: "Our Faculty has been the only official partner of the WEF in Thailand for many years. Our partnership means CBS has the right to publish the GCI and we join in the research that creates the GCI rankings. The competitiveness rankings are awarded to 141 countries around the world. The index is divided into four major categories and built on 12 pillars:

1. Enabling Environment: covers Institutions, Infrastructure, ICT Adoption and Macroeconomic Stability;
2. Human Capital: assesses Health and Skills;
3. Markets: includes Product Markets, Labor Market, Financial System, and Market Size
4. Innovation Ecosystem: assess Business Dynamism and Innovation Capacity.
These 12 pillars translate into 103 separate measures totaling a maximum of 100 points. The scores are summed across the four major categories to arrive at the GCI score.
Thailand's GCI ranking improved in 2019, as the score rose from 67.5 in 2018 to 68.1 in 2019. This score places Thailand in the top 40 among 141 countries surveyed.

Singapore ranked first in the survey this year, edging out the United States. The nations ranked third through tenth are: Hong Kong, Netherlands, Switzerland, Japan, Germany, Sweden, United Kingdom, and Denmark.

Vietnam climbed the most places in 2019, adding 3.5 points to its ranking in 2018, jumping 10 places from 77th in 2018 to 67th this year.
Thailand's score in 2019 placed it sixth of 12 countries in the ASEAN +3 grouping, trailing Singapore (ranked first worldwide), Japan (6th), South Korea (13th), Malaysia (27th), and China (28th).

Thailand received a higher ranking than six other ASEAN countries. Indonesia was ranked 50th, Brunei ranked 56th, followed by Philippines (64th) and Vietnam (67th), Cambodia (107th), and Laos (113rd). Myanmar was not included in the rankings.

A closer look at Thailand's scores in each of the four major categories shows some progress and some challenges.

In the first category, Enabling Environment, Thailand scored 233 out of 400. The score for the Institutions pillar dropped from 55.1 in 2018 to 54.8 this year and the ranking dropped from 60 to 67. However, Thailand's score on this pillar is still above the median score of neighboring countries. The score for the Infrastructure pillar also fell, dropping from 69.7 to 67.8, and Thailand's ranking slipped from 60th to 71st place. The survey revealed that the nation continues to do well in several categories, like the provision of basic infrastructure such as electricity and airport logistics. The main reason the ranking fell was the concentration of the railway system and the low efficiency of railway service.

Thailand's score was boosted because of a decline in the crime rate and the adoption of new regulations designed to reduce conflicts of interest and corruption. Thailand received a better score this year on the ICT Adoption pillar. The score rose from 56.6 to 60.1, bumping up the ranking from 64 to 62. Perhaps unsurprisingly, Thailand

received high marks in the use of smartphones by its citizens. The score on the Macroeconomic Stability pillar rose slightly from 89 to 90, but the ranking climbed from 48th to 43rd because the nation has good policies in place designed to control the inflation rate.

The second category is Human Capital. Thailand scored 151 out of 200 in this area. The Health score improved from 87.3 to 88.9, pushing the ranking from 42nd to 38th. However, the Skills score, which measures education and workforce skills, slipped from 63 to 62.3, dropping the nation's position from 66th in 2018 to 73rd this year. Despite the slide, Thailand's score was higher than the average score of its ASEAN neighbors. The assessment revealed the skills of new university graduates declined, especially in the area of critical thinking.

The third category is Market. Thailand scored 277 out of 400 in this category. In the Product Markets section, the score was boosted by the implementation of policies designed to encourage competition and limit the concentration of market power by reducing the instances of monopolies. Though Thailand's score in this section was nearly the same year to year, the ranking improved considerably climbing from 92nd in 2018 to 84th in 2019. In the Labor Markets section, the score was nearly unchanged 63.3 in 2019 versus 63.4 in 2018 but the ranking slipped to 46th from 44th in 2018. In contrast, neighboring countries, such as Vietnam, Laos, and Brunei, showed higher growth rates this year compared with 2018. In the Financial System section, the score rose from 84.2 to 85.1. Despite the rise, the ranking fell from 14th in 2018 to 16th this year. Thailand's financial markets remain well developed even though the ranking showed a slight decline.

The fourth aspect is Innovation Ecosystem. Thailand scored 116 out of 200 in this section. The score for Business Dynamism was higher in 2019, up from 71 to 72, while the ranking rose from 23rd to 21st. The agility of Thai businesses improved for two main reasons: better business conditions, and the use of entrepreneurial concepts. As for Innovation Capability, the score rose from 42.1 in 2018 to 43.9 in 2019, while the ranking climbed from 51st to 50th. Many aspects of Innovation Capacity improved, such as creating partnerships to develop creativity, research and development, and creating added commercial value.

Researchers at Chulalongkorn Business School at Chulalongkorn University have analyzed all the indicators. The WEF rankings show that Thailand is still not doing as well as it could even though the weighted average index is high. Future improvements in the rankings will come if there is rapid progress in several areas, such as reducing corruption, improving the quality of infrastructure, improving skills of the workforce, and boosting the level of competition in the domestic market. Thailand does have noteworthy performances in areas such as controlling inflation, growth in gross domestic product, and the health/longevity of Thais. Progress in the areas for tagged for improvement will increase by leaps and bounds Thailand's ability to compete and result in higher levels of national development.

The index numbers for 2019 reflect the development of Thailand over the past year. One major conclusion drawn from the competitiveness rankings is that increased competitiveness in the world arena – and the corresponding increases or decreases in the rankings – is not caused by national development alone. Although a rise in the rankings shows the level of ability is increasing, the context of the global economy is more advanced. As a result, nations must rely on development strategies that are superior to those of competing countries.


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