What is competitiveness?

The WEF (World Economic Forum) breaks down countries' competitiveness into 12 areas. These are grouped into three sub-categories.

1. Basic requirements: Institutions, infrastructure, macroeconomic environment, and health & primary education.
2. Efficiency enhancers: Market size, goods market efficiency, labour market efficiency, financial market development, higher education and training, technological readiness.
3. Innovation and sophistication: Business sophistication, and innovation.

While the world is getting better at measuring things, there is still no fail-safe way to include a country's environmental record into its competitiveness core. Nor is there a way to measure if and how competitiveness makes people happy.

However, comparing the competitiveness of those economies engaged in monetary stimulus programmes, those with high competitiveness scores were more successful in driving economic growth.

Basic drivers of competitiveness such as infrastructure, health, education, and markets will always be important, but the data suggests that a nation's performance regarding technological readiness, business sophistication and innovation is as important in driving competitiveness and growth.

Leaders of emerging markets need to know that helping their economy succeed is more nuanced than previously thought.