COMPETITIVENESS

Competitiveness is one of the key criteria that goes into assessing the success of countries, industries, and companies. According to the World Economic Forum, competitiveness is the set of institutions, policies, and factors that determine the level of productivity. So competition in a positive manner can help tremendously.

2016 Global Competitive Report

It gladdens me to write that, according to the IMD World Competitiveness ranking of 63 countries in 2017, the UAE has secured a place in the super league of the top 10 competitive countries in the world. In 2016, the UAE took 15th place, and I feel proud that it has since moved by five places to grab 10th spot in 2017.

Sheikh Mohammed bin Rashid, the Vice President and Prime Minister of the UAE and Ruler of Dubai, praised the efforts of federal, local, and private sector teams for their outstanding work, and said, “We’ll go at a steady pace to achieve our development vision and prosperity, well-being, and happiness for the homeland and its citizens; such global indicators were an effective incentive for continuous self-assessment and a mirror of our strengths and the opportunities for improvement and self-discovery.”

The World Economic Forum (WEF) stated, “The UAE continues to lead the MENA region, building on improvements in competitiveness in recent years. This year, small gains in areas such as technology adoption and business sophistication are partially offset by deteriorating macroeconomic stability that is the result of lower energy prices, which have led to a rise in inflation and public debt and to the emergence of a fiscal deficit. Overall, the UAE boasts a number of competitive strengths: infrastructure is top-notch (fourth overall), and goods and labor markets are open and efficient. Going forward, for the country to diversify its economy, enhancing innovationwhere the country currently ranks 25th—will be crucial. There is equal scope for better leveraging digital technologies that are an important enabler of business innovation; currently, the country ranks 29th in the use of information and computer technology.”

These factors truly justify UAE’s place on the competitive list.

Twelve Pillars of Competitiveness

The Global Competitiveness Report defines competitiveness as the set of institutions, policies, and factors that determine the level of productivity of a country. In essence, the more productive a country is, the more competitive it is in a globalized context. The World Economic Forum (WEF) uses 12 pillars of competitiveness, collecting reliable data from organizations such as the World Bank and the IMF to prepare the yearly index. The 12 pillars follow.

1. INSTITUTIONS: It is important that the institutional environment in which individuals, firms, and businesses interact be sound and fair. Excessive bureaucracy, corruption, overregulation, and dishonesty by government officials are deterrents to a country’s competitiveness globally
2. INFRASTRUCTURE: A productive economy requires extensive and efficient infrastructure. This determines the locations of economic activities and the types of activities that are suitable for specific areas of the economy.
3. MACROECONOMIC ENVIRONMENT: If a country is characterized by high macroeconomic instability (a rapidly depreciating exchange rate, high-interest rates, and inflation, etc.), it is difficult for the government to concentrate on providing the appropriate economic services.
4. HEALTH AND PRIMARY EDUCATION: A healthy work environment plays a vital role in a country’s competitiveness and productivity. Ill workers are less efficient and cannot function at their full potential. Hence, they cannot fulfil existing requirements properly. This leads to significant costs to the business, as sick workers are often absent. In addition to health, this pillar considers the quantity and quality of the basic education the population receives. This is increasingly important in today’s economy. Less educated workers find it much harder to adapt to more advanced production processes and techniques. As a minimum, a basic education is compulsory for every individual. It could be said that the well-educated can execute tasks more innovatively. In other words, lack of basic education can become a constraint on business development, making it difficult for firms to move up the value chain by producing more sophisticated or value-intensive products.
5. HIGHER EDUCATION AND TRAINING: Quality higher education and training are crucial for economies that want to move up the value chain beyond simple production processes and products. More specifically, the present globalizing economy requires countries to nurture pools of well-educated workers who can perform complex tasks and adapt rapidly to their changing environment and the evolving needs of the production system. This pillar measures secondary and tertiary enrolment rates, as well as the quality of education as evaluated by business leaders. It also considers the extent of staff training because of the importance of vocational and continuous on-the-job training—which are neglected in many economies—for ensuring the constant upgrading of workers’ skills.
6. EFFICIENCY IN THE GOODS MARKET: Countries position themselves to produce the right mix of goods and services based on their supply and demand conditions.
7. EFFICIENCY IN THE LABOR MARKET: Workers must get jobs that are well-suited to their education and skills. They must be able to switch from one job to the next at a low cost and with relative ease, depending on shifts in consumer demand.
8. A DEVELOPED FINANCIAL MARKET: The financial and economic crisis has highlighted the central role that a sound and well-functioning financial sector plays in economic activities. An efficient financial sector allocates the resources that a nation’s citizens, as well as those entering the economy from abroad, save for their most productive uses. It channels resources to the entrepreneurial or investment projects with the highest expected rates of return rather than channeling them to the politically connected ones. A thorough and proper assessment of risk is, therefore, a key ingredient of a sound financial market.
9. TECHNOLOGICAL READINESS: In today’s globalized world, technology has become an essential factor for firms’ competition and prosperity. The technological readiness pillar measures the agility with which an economy adopts existing technologies to enhance the productivity of its industries. Information and communication technologies have evolved into the “general purpose technology” of our time, given their critical spillover to other economic sectors and their role as industry-wide enabling infrastructure. Therefore, ICT access and usage are key enablers of countries’ overall technological readiness.
10. MARKET SIZE: The size of a country’s market determines how much the country produces. Small economies, such as Jamaica, must take advantage of globalization and increase production for export.
11. BUSINESS SOPHISTICATION: There is no doubt that sophisticated business practices are conducive to higher efficiency in the production of goods and services. Business sophistication concerns two elements that are intricately linked: the quality of a country’s overall business networks and the quality of individual firms’ operations and strategies. These factors are especially important for countries at advanced stages of development, when, to a large extent, the more basic sources of productivity improvements have been exhausted.
12. INNOVATION: Innovation can emerge from new technological and non-technological knowledge. Nontechnological innovations are closely related to the know-how, skills, and working conditions that are embedded in organizations and that, therefore, the 11th pillar of the GCI largely covers.

Dubai Competitiveness Center

Being an Emirati, I am proud to write about the Dubai Competitiveness Center (DCC) here. The DCC is the operational arm of the Dubai Economic Council and was established with the vision of enhancing Dubai’s global competitiveness and facilitating sustainable development. Its primary aim is to align Dubai’s laws, regulations, and policies to the best practices in the world to promote innovation, technological development, and entrepreneurship. Moreover, by enhancing the focus on innovation and R&D, it aims to rapidly reposition Dubai as a constant “great disruptive innovation wave,” thus granting it a more resilient place in the world. The strategies and activities of the Dubai Competitiveness Center are detailed below.

STRATEGIC OBJECTIVES:

• To produce the Dubai Annual Competitiveness Report and improve Dubai’s ranking in global reports by carrying out studies and providing accurate information to the stakeholders;
• To enhance Dubai’s competitiveness through the formation of sophisticated economic clusters;
• To spread awareness of Dubai’s competitiveness through constant interaction with various media channels;
• To participate in and lead local and international competitiveness projects; and
• To assist in establishing and running a regional competitiveness learning platform.

COMPETITIVENESS STRATEGY

The core of Dubai’s Competitiveness Strategy, which the DCC promotes, involves firms and sectors moving up the global value chains, and enhancing productivity, skills, and R&D in Dubai.

SETTING THE STAGE FOR POLICIES, REGULATIONS, & STANDARDS

The following strategies:

• Provide research and expertize to enhance the overall macroeconomic and microeconomic foundations of competitiveness.
• Measure the current state of competitiveness in Dubai by using various internationally-recognized methodologies and frameworks.
• Formulate draft policy and regulation proposals to increase the role of innovation and R&D in the economic and social development process in Dubai.

CLUSTER DEVELOPMENT AND PUBLIC PRIVATE PARTNERSHIP

• Establish cluster platforms/cluster working groups and play the role of a facilitator to enhance the Dubai clusters that have national and international growth.
• Work/align with cluster stakeholders as a facilitator of public and private dialogue for the continuous improvement of links within the cluster and across boundaries.
• Promote the enhancement of the innovation, R&D, and technological readiness components within each cluster through policy recommendations and partnerships with stakeholders.

PARTNERSHIP WITH INTERNATIONAL INSTITUTIONS

• Partner with international organizations and institutions working on competitiveness and economic development issues.
• Prepare joint research and policy recommendation work; organize local and international events on competitiveness.