Development of OECD Competitiveness Indicators Platform Eun-Pyo HONG Head, Labour Statistics and Competitiveness Indicators Unit Statistics Directorate/OECD
OECD competitiveness indicators platform (OCIP) Development of OCIP is an ongoing project began in 2009 to provide a comparable and harmonized set of indicators for OECD MSs to assess and monitor the level and the progress of competitive positions So far, the followings are completed: Determination of structure Variable selection and collection
Background (1/2) Growing needs from OECD community to compare one s competitive position against others. As a result of accelerated globalisation for the past decades, players in the international community have become closer and more interdependent STD of the OECD has continuously been providing various measures to evaluate and monitor competitiveness such as OECD system of unit labour costs and productivity via OECD.stat. Recently, MSs are looking for more comprehensive competitiveness measures in order to optimise their benefit as members of the global community
Background (2/2) No consensus on the precise nature of competitiveness Theoretical concepts can be broadly grouped into three main approaches: Comparative advantage (traditional approach) Productivity (P. Krugman) Diamond Model (M. Porter) Numerous organisations provide competitiveness measures based on own concept and data whose comparability yet to be confirmed
OCIP - Value-added OCIP intends to provide value-added: Focusing on economic leaders Using official statistics Providing long-run dynamics Recognising globalization Flexibility for users OCIP can also be used for nations whose socioeconomic characteristics are similar to those OECD MSs such as BRIIICS
OCIP- Structure(1/2) Endowments and conditions Policy Performanc e Physical infrastructure Economic development Sustainability Natural endowment Regulations & institutions Efficiency Efficiency Economic condition Technological Capacity Welfare Human & Social resources Social improvements Knowledge Enhancement
OCIP- Structure (2/2) Endowments and conditions are to capture a country s advantage determined by the nature or stock of resources accumulated by the past activities. It is split into four subcategories of Natural endowment, Physical infrastructure, Economic condition, and Human & social resources. Policy is to reflect a country s effort or initiatives to enhance its competitiveness position by efficient use of resources. Policies for promoting economic development, social improvement, regulations and institutions, and technological capacity are key determinants embodied into this category. Performance is to understand how resources and policies are efficiently mixed to produce competitive output. Thus, degrees of sustainability, efficiency, welfare, and knowledge enhancement of the society are considered for this category.
OCIP - Concept: endowments and conditions (1/3) Category Natural endowment Physical infrastructure Economic condition Human & social resources Conceptual background Refers to pre-conditions given by the nature, environmental status or energy profile determined over the long-run. Refers to various types of infrastructures accumulated by economic and social activities in the past. Refers to economic indicators related to economic infrastructure, status of economic liability, stability, production cost, and income distribution. Refers to human or social infrastructure and their performance with long-term implication. Thus, this indicator comprise of demographic situation, status of health, labour quality and meeting global responsibility
OCIP - Concept: Policy (2/3) Category Economic development Social improvements Regulations & institutions Technological capacity Conceptual background Refers to macroeconomic policies which stimulate and support short- or medium-term economic development and stability, namely fiscal and monetary policies. Refers to policies fostering and improving the quality of life. It consists of actions to enhance health and education status as well as employment protection. Refers to policies facilitating free market competition, or to remove legal barriers. They also include microeconomic policies encouraging innovation and investment. Refers to policies (e.g. investment and expenditure) that promote technological innovation and improve technological infrastructure.
OCIP - Concept: Performance (3/3) Category Conceptual background Sustainability Refers to flow of economic performance that ensures sustainable and environmentally favourable growth in the long-run. Efficiency Welfare Knowledge enhancement Refers to productivity, performance at industry or micro level, or comparative advantages in global market and performance of R&D investment. Reflects the improvements in the overall quality of life of the population. Reflects advancement in technological innovation and human and social capital.
OCIP Candidate variables (1/4) Criteria: Long-run dynamics: 1996-2008 Timeliness: lag of less than 2 years Availability: covers most OECD MSs Comparability: official sources Comprise a wide range of variables: 251 variables 80; 72; 99
Category Natural endowment Physical infrastructure Economic condition Human & social resources OCIP Candidate variables (2/4) Potential variables Total land area and forest area, water capacity (fresh water and river), waste water plants, agricultural and fishery product, mining capacity or product, energy status including electricity, oil capacity and renewable energy. IT infrastructural or their use such as standard access lines, number of internet or mobile subscribers, households with broadband, roads paved, capacity of harbour and airport, length of rail road, numbers of vehicles, freight and passenger transport, etc. Long-term interest rates, GDP growth by components, fiscal balance, net national saving, annual inflation, compensation of employees and value added, pension payments, poverty and income equality Population (domestic and foreign born), labour force and economically active population, birth rates and life expectancy density, fertility rate, age structure, ageing index, infant mortality rate, tobacco consumption, percentage of adults with obesity.
Category Economic development OCIP - Candidate variables (3/4) Potential variables Government expenditures, direct and indirect taxes, investment, short-term interest rate, monetary aggregates and share prices. Social improvements Regulations & institutions Technological capacity Health and education expenditure, number of non-governmental organizations, quantity of employment and training programs, expenditure in recreational activities, investment in public safety. Price controls, scope of public enterprise, number of trade agreements, trade associations, reduction of tariffs, simplification of rules and procedures, energy and telecom regulations indices, number of industrial or sector clusters and transfer prices. Technological transfers, innovative capacity yields, expenditure on R&D, number of think tanks and vocational training providers, protection to intellectual property, level of attraction of specialists, numbers of enterprises involved in government sponsored technology projects, amount of income tax deduction reflecting research expenses, industry-financed GERD as a percentage of GDP,
OCIP - Candidate variables (4/4) Category Potential variables Sustainability Real GDP growth rate, greenhouse gas emissions, carbon emissions (e.g. by sector or per capita), carbon taxes, major protected land area, use of forest resources, environment R&D budget. Efficiency Sectoral contributions to gross value added (e.g. services value added), number of enterprises, production, number of employees, number of multinationals, trade coverage ratios, export market shares, trade by commodities, wages, hours worked, international positions. Welfare Knowledge enhancement Number of well-being programs, physical and mental health conditions of the population, livability of the countries, crime index, unemployment benefits and welfare payments, happiness index, per capita income levels. Number of researchers, patenting activity (e.g. ICT and biotechnology), entrepreneurship variables, rate of technological innovation, degree of specialization in jobs.
OCIP- Consolidation Variables can be used to evaluate competitiveness positions of OECD member countries as a whole and various sectors. STD/OECD do not intend to provide a composite index of competitiveness but leave users free to choose own list of variables and methodologies accordingly to their purpose, etc.
OCIP- Next step in 6 months Analyse quality of variables selected for OCIP Prepare the first edition of the OCIP compendium Create Competitiveness cube in the OECD.Stat: Consolidate all the competitiveness databases such as ULCs, productivity, OCIP, etc.
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