Bìznes Inform (Aug 2020)
The Index of Global Competitiveness as an Indicator of Resilience of the World in the Global Crisis
Abstract
COVID-19 has developed into a serious threat to humanity and has demonstrated the systematicity of economic activity processes, creating a «domino effect». Initially, China was the only country to face the emergence of an unknown infection. However, in conditions of close interconnection and interdependence of participants of international economic relations, COVID-19 has spread to other world countries, causing a pandemic. These events show a high degree of integration of economic systems in the conditions of globalization, in which the problems of one country become universal and must be solved by joint efforts of the entire global community. The events of the second trimester of 2020 demonstrate the systemic consequences of COVID-19 – negative events in the health care system (pandemic, worsening of viral threat), catalization of the economic crisis, which in the international scientific studies is now marked as the COVID-19 crisis. This points out the significant risks in terms of deterioration of indicators of both economic growth and financial stability. The article is aimed at forming a hypothesis that if a country has a higher global competitiveness index in the ranking, it should have more resilience in relation to the global crisis than less competitive countries. At the present, it is too early to assess economic losses from the COVID-19 crisis with any accuracy, but some preliminary estimates can still be made. Experts at the World Economic Forum indicate that the world economy is poorly prepared for a possible downturn in business activity, as the past decade has been «lost» in terms of taking measures to boost productivity. The average IGC4.0 for all countries under research makes 60.7 points, which means that almost 40 points are lacking for the ideal state. The countries need to develop not only monetary-credit policy, but also other types of economic strategies, investments, need to seek incentives to revive productivity growth and anti-crisis strategies. Finding a balance between technological integration and investments in human capital will be crucial to productivity gains. The shortcomings of conservatism were noticeable before the COVID-19 crisis, but the latter would force managers to switch from ideological support for Industry 4.0 to the specific application of its measures in practice. The main task of the States in the crisis is to achieve the best for society balance between technological and social development. According to the results of the system update, those countries that will succeed in achieving the best balance will become leaders. On the way to this goal, a culture of governance, trust between society and the State, including the willingness of the population to follow the instructions of the latter, will have the most significant influence.
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