The conditions for doing business in the global economy are constantly changing presenting new challenges and opportunities.
DI ANALYSIS
DI ANALYSIS
GLOBAL
BENCHMARK
REPORT
Including themes on global investment ows and Africa
READY
FOR
GLOBALISATION
Global benchmark report 2014
FOREWORD
Businesses across the EU are beginning to see signs that a badly needed confidence
is returning to the economy as an indication that the European economy could return
to moderate growth in 2014. But the situation remains fragile. In order for Europe to
emerge stronger from the financial crisis and restore long-term growth, we need to
do much more to strengthen the fundamental determinants of competitiveness. We
need a reduction of financial, trade and labour market imbalances in all the European
countries in order to build a strong foundation for future growth. And we must be much
better at combining national and European reforms so they become mutually reinforcing. A continued focus on fiscal consolidation and growth enhancing structural reforms
is key to improving Europes international competitiveness, growth and employment
prospects.
With its rich data and insightful assessments, DIs Global Benchmark Report provides
a useful overview of the national policies that ultimately determine Europes overall
competitiveness. It can help each and every European member state to identify its
strengths and weaknesses in facing international competition.
BUSINESSEUROPE strongly supports this continued effort to provide facts and figures
for a fruitful dialogue on best practices. The DI Global Benchmark Report complements our own annual European Reform Barometer. We hope both publications can
inform and inspire policymakers to work on the difficult task of designing and implementing policies that will support businesses in their efforts to make the best of the opportunities presented by global markets and help return the EU economy to stronger
growth and full employment.
March 2014
Markus J. Beyrer
Director General, BUSINESSEUROPE
PREFACE
Economic recovery in the wake of the financial crisis is slow and uneven. Forecasts predict
some acceleration of growth in 2014 and 2015, though still hesitant. However, we have yet
to realise these expectations. In the current context, governments must avoid complacency in preparing nations for the future economic landscape. Clear and credible strategies
are needed to make the growth path irreversible and sustainable. These strategies require
a strong commitment to long overdue structural reforms. It is DIs intention that policymakers and business leaders can make use of the Global Benchmark Report to identify
strengths and weaknesses of their nations and apply these insights in the pursuit of creating open and prosperous nations capable of creating and sustaining growing economies in
balanced societies.
The Global Benchmark Report 2014 is the tenth in a series of reports presenting DIs annual assessment of how the global challenge is met in the OECD member states. Across five
pillars comprising level of globalisation, productivity and innovation, qualified labour, public
economy and costs, each nation is benchmarked on the basis of 87 indicators that support
the common aspiration for growth and prosperity. The report provides a snapshot of each
countrys ability to develop attractive business environments and seize opportunities presented by globalisation.
The conditions for doing business in the global economy are constantly changing presenting new challenges and opportunities. Therefore, the two theme chapters of the Global
Benchmark Report address how to make the most of these challenges and opportunities.
The first theme chapter focuses on the struggle to attract foreign direct investment, an issue
of growing concern in several OECD member states. Globalisation has increased foreign
direct investment flows and new, viable destinations for investment have emerged putting
pressure on the business and investment climates in several OECD countries. Foreign direct investment introduces new technologies and offers something unique in terms of innovation and productivity. It is vital to continually improve conditions that attract and retain
foreign companies.
The second theme chapter highlights opportunities of tapping into the vast and growing
African market and emphasises the major development results that can be achieved from
combining aid and trade promotion.
March 2014
Karsten Dybvad
CEO, Confederation of Danish Industry (DI)
CONTENT
18 Benchmarking
20 Level of globalisation
30 Productivity and innovation
46 Qualified labour
62 Public economy
70 Costs
78
Theme chapters
127
Description of sources
131
Summary of benchmarks
137
Index to benchmarks
GROWTH
Pillars
PERFORMANCE IN
THE GLOBAL ARENA
For the tenth consecutive year, the Global Benchmark Report examines how the
global challenge is met in the OECD member states. The report highlights strengths
and weaknesses of each OECD member state in facing international competition
and gives a picture of each countrys ability to develop attractive business environments and utilise the opportunities presented by globalisation. The Global Benchmark Report is an annually recurring publication intended as a benchmarking tool
for business leaders and policymakers to identify obstacles and opportunities presented in the global business arena.
This year, the report also includes two chapters on New trends in global investment flows and "Africa: Open for business". The first theme chapter focuses on
the struggle of attracting companies and their investment, an issue of growing concern in several OECD member states. Foreign investment introduces new technologies and offers something unique in terms of innovation and productivity. The second chapter highlights opportunities of tapping into the vast and growing African
market and emphasizes the major development results that can be achieved from
combining aid and trade promotion.
International benchmarking
The report compares the performance of 33 OECD member states and their business environments. When possible, data from Brazil, Russia, India and China is
included. The report is based upon five fundamental pillars of competitiveness. Together these five pillars constitute the foundation for creating open and prosperous
nations capable of creating and sustaining growing economies in balanced societies. Thus, the comparison is based on 87 benchmarks divided into Level of globalisation, Productivity and innovation, Qualified labour, Public economy and Costs.
Level of
globalisation
Productivity and
innovation
Qualified
labour
Public
economy
87 benchmarks
Costs
10
OECD
Chile
Turkey
Israel
South Korea
Poland
Australia
Mexico
New Zealand
Canada
Sweden
United States
Switzerland
Slovak Republic
Norway
Germany
Estonia
Austria
Japan
Belgium
France
United Kingdom
Czech Republic
Denmark
Netherlands
Finland
Hungary
Iceland
Ireland
Spain
Portugal
Italy
Slovenia
Greece
China
India
Brazil
Russia
-6
-4
-2
10
Per cent
11
OECD
Norway
United States
Switzerland
Canada
Australia
Austria
Netherlands
Ireland
Sweden
Iceland
Germany
Belgium
Denmark
United Kingdom
Japan
Finland
France
Israel
South Korea
New Zealand
Spain
Italy
Slovenia
Czech Republic
Slovak Republic
Greece
Portugal
Estonia
Poland
Hungary
Chile
Mexico
Turkey
Russia
Brazil
China
India
10,000
20,000
30,000
40,000
50,000
60,000 USD
The most prosperous members of the OECD continue to be Norway, United States
and Switzerland. The Norwegian first place ranking is mainly due to the country's
major oil production. Despite high growth for several years, the BRIC countries still
have low per capita GDP.
12
Average rank of OECD countries across all ve pillars* in the Global Benchmark Report
Switzerland
South Korea
Sweden
Ireland
Canada
Chile
Australia
Estonia
United States
Netherlands
United Kingdom
Finland
Denmark
New Zealand
Germany
Israel
Norway
Iceland
Austria
Czech Republic
Japan
Poland
Slovak Republic
Belgium
Portugal
Hungary
Spain
France
Slovenia
Turkey
Mexico
Greece
Italy
1
2
2
4
5
6
7
8
8
10
10
12
13
14
15
16
16
18
19
19
21
21
23
24
25
26
27
28
29
29
31
32
33
(1)
(2)
(3)
(8)
(4)
(7)
(5)
(13)
(9)
(6)
(15)
(12)
(10)
(17)
(11)
(19)
(18)
(14)
(16)
(21)
(20)
(23)
(22)
(26)
(24)
(28)
(24)
(30)
(28)
(27)
(31)
(32)
(33)
0
10
Note The numbers in the brackets indicate the countries ranks in the competitiveness index for 2013.
The coloured circle species if the country has either improved, worsened or kept its position.
15
20
25
30
13
1. Level of globalisation
Several OECD member states are still struggling with weak domestic demand. Improved access to major international export markets can help countries tap into
global economic growth. The process of globalisation cultivates interaction between countries and increases international sales. In this first pillar, a nation's level
of globalisation is determined by the degree of global market involvement in terms
of exports, foreign direct investment, global mindset among citizens and businesses, and the extent of cultural openness, to mention a few. The members of the
OECD should strive to seize the opportunities offered by globalisation in order to
create future growth.
Ireland has the position as the OECD country with the highest Level of globalisation. The Irish lead is based on several top rankings including the largest share of
exports relative to GDP, highest freedom to trade internationally, efficient customs
authorities, highest cultural openness, and a population with the most positive attitude towards globalisation. Chile ranks second.
Ireland no. 1
in Level of globalisation
Switzerland no. 1
in Productivity
and innovation
3. Qualified labour
A well-educated workforce contributes significantly to a nation's economic value
creation through productivity and business innovation. It is therefore of paramount
importance that the business conditions of society support education and R&D and
that businesses have access to employees with the desired competences. In this
pillar, the availability of qualified labour in the OECD member states is determined
by measuring investment in education, levels of educational attainment, business
conditions provided by society, and labour market participation.
Canada tops the Qualified labour pillar with a highly educated population and
strong focus on tertiary education. Furthermore, Canadian senior managers assess
that the country's legislation on equal opportunities supports economic growth.
Switzerland and South Korea together rank second with a series of solid performances.
Canada no. 1
in Qualified labour
14
4. Public economy
Among other lessons, the financial crisis and the following European debt crisis
have taught the world the importance of monitoring the health of a country's public sector. A country's economic robustness is dependent not only on a strong and
thriving private sector but also an efficient and balanced public sector. Therefore,
among other indicators, this fourth pillar assesses budget balance, public debt,
public expenditure, and corruption levels.
Switzerland no. 1
in Public economy
Switzerland excels as the OECD member with the best average ranking in Public
economy. The country has the lowest public expenditure as a proportion of GDP.
Additionally, Switzerland is one of the only OECD member states with a structural
surplus on its public budgets, and the Swiss public sector is among the smallest in
OECD. South Korea is the runner-up.
5. Costs
The final pillar of the Global Benchmark Report is Costs. The competitiveness of
businesses in a global economy depends on whether productivity and the quality of
the product offset the costs of production. Production costs and taxes are therefore
important indicators of competitiveness. In this pillar, the level of costs in the OECD
countries is determined by benchmarks that measure taxes, consumer prices and
compensation costs. Maintaining a competitive cost level is the fifth and final component of creating growth.
Switzerland no. 1
in Costs
Switzerland is the most competitive country in terms of Costs. This rank is earned
as a result of low marginal tax rates for especially medium wage earners and low
inflation. Furthermore, Swiss businesses have easy access to capital markets, and
this minimises financial costs and helps to stimulate economic growth. Chile holds
second place.
15
The trend is particularly evident in EU-15, where the gap has nearly tripled in the
past decade and currently constitutes 15 per cent of the countries overall GDP. Although many countries have experienced this development, the scope varies greatly as well as the underlying reasons for the development of the investment gap.
The situation is particularly problematic for countries experiencing a declining inflow since FDI can raise both employment and productivity wherever it occurs. It is
therefore important for all countries to be able to attract FDI.
In general, the pattern of the global FDI flows indicates that several affluent OECD
member states have difficulties attracting and maintaining businesses and jobs.
However, it is possible to reverse the trend and increase a countrys attractiveness
as a FDI destination. This involves reducing administrative burdens, better interaction between private and public investment, and enhanced direct financial incentives to invest.
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
16
Over the past decade, Africa has developed from being an extremely poor continent with dark prospects for the future to becoming the region with the highest
growth rates in the world. This provides a potential for European companies, but
also affects Europes involvement as an aid donor and trade partner for Africa.
The high African growth rates are thanks to a strong increase in inward foreign direct investment and major demand for African raw materials from growth countries
such as China, India and Turkey.
Contributing directly to the growth and attracting FDI, the African consumer has
become a significant player. African consumers demand a wealth of new products
and services and often pay for them through their mobile telephones. This generates business opportunities that many companies have gradually spotted.
Business conditions have also improved significantly in the African countries. Some
countries are even competing to implement most business-friendly reforms in order to be attractive for FDI. It is, however, important to realise that there are major
differences across the continent. Not all countries have been able to achieve skyhigh growth rates, and a group of African countries are still dominating the bottom
of all kinds of ranking from corruption to education.
Some European countries have had strong trade relations with Africa over many
years, and the EU is still Africas greatest trading partner. There are, however, major
differences as to how much the individual countries trade with Africa, and it is particularly the EU-15 member states that have high trade with Africa while the new
member states are lagging behind.
At the same time, several donor countries and African partner countries have
spotted the advantages of co-thinking aid and trade cooperation and in this way
achieved synergic effects between public development aid and private investment.
Historically, as Africas largest donor, the EU has placed the highest priority on oth-
Africa will be world champion in economic growth in the next five years
Expected average annual GDP growth, 2013-2018
Sub-Saharan Africa
Africa
Asia
* G7 are Canada, France,
Germany, Italy, Japan,
UK and USA.
Note Africa includes Northern
Africa
Source IMF, World Economic
Outlook, Database, October 2013
Middle East
Central and Eastern Europe
G7*
0
6 Per cent
er types of aid that aid with focus on job creation and growth. There are signs,
however, that in future the EU will place greater emphasis on industrialisation and
private sector development with focus on job creation. The chapter ends with a
number of recommendations for how the development aid can be structured so
that it harmonises most efficiently with the activities of businesses with a view to
optimising both development and business effects.
17
Ireland
Chile
Switzerland
Sweden
Netherlands
Estonia
Israel
United Kingdom
Belgium
Australia
Austria
Denmark
South Korea
Germany
Hungary
United States
Canada
New Zealand
Finland
Portugal
Mexico
Iceland
Czech Republic
Norway
Turkey
Slovak Republic
Poland
Spain
Slovenia
France
Japan
Italy
Greece
1
2
3
4
5
6
7
8
9
10
11
11
13
14
15
16
17
18
19
19
21
22
23
23
25
26
27
28
29
30
31
32
33
(1)
(2)
(3)
(5)
(4)
(7)
(6)
(8)
(10)
(12)
(14)
(9)
(11)
(13)
(18)
(16)
(15)
(21)
(19)
(20)
(23)
(17)
(29)
(22)
(26)
(27)
(24)
(25)
(28)
(30)
(31)
(32)
(33)
0
10
15
20
25
30
21
LEVEL OF GLOBALISATION
Several OECD countries are still struggling with weak domestic demand.
Improved access to major international export markets can help countries
tap into global economic growth. The process of globalisation cultivates interaction between countries and increases international sales. In order to
take advantage of the many new opportunities presented by globalisation,
great demands are placed on the global outlook of citizens, companies and
policy makers. A positive attitude towards globalisation and openness towards foreign ideas and cultures are prerequisites for success.
The top three countries in Level of globalisation, Ireland, Chile and Switzerland, have
retained the same positions as last year.
Ireland is the OECD country with the highest rank in Level of globalisation. The Irish
lead is based on several top rankings including the largest share of exports relative to
GDP, highest degree of freedom to trade internationally, efficient customs authorities,
highest degree of cultural openness and a population with the most positive attitude
towards globalisation.
Chile is second with a series of solid performances. The country has the most positive
image abroad and excels in terms of both attracting foreign investments and investing
abroad.
Switzerland ranks third. The country has the highest share of upmarket exports to
EU15, Swiss senior managers have the highest degree of international experience and,
additionally, Switzerland is a major investor abroad.
22
OECD
Estonia
South Korea
Slovak Republic
Turkey
Mexico
Poland
Australia
Czech Republic
Iceland
Spain
United States
Portugal
Hungary
Germany
New Zealand
Netherlands
Israel
Ireland
Switzerland
United Kingdom
France
Belgium
Austria
Sweden
Slovenia
Italy
Canada
Denmark
Japan
Norway
Finland
Greece
China
India
Brazil
Behind the benchmark
-4
-2
10
EUROZONE
Ireland
Slovak Republic
Hungary
Estonia
Netherlands
Belgium
Czech Republic
Slovenia
Iceland
Austria
South Korea
Denmark
Switzerland
Germany
Poland
Sweden
Portugal
Finland
Norway
Spain
Israel
Mexico
United Kingdom
Italy
Canada
Greece
New Zealand
France
Turkey
Australia
Japan
United States
Behind the benchmark
Ireland continues to be the country with the largest export as a percentage of GDP. Ireland is followed
by the Slovak Republic and Hungary. Ireland has been able to attract
international companies that sell a
large proportion of their production
outside the Irish domestic market.
20
40
60
80
100
120
23
India
China
Russia
Brazil
Behind the benchmark
-0.4
-0.2
0.0
0.2
0.4
0.6
0.8
1.0
OECD
Switzerland
Japan
Ireland
United States
Israel
Australia
Canada
Denmark
Austria
Mexico
Sweden
South Korea
Estonia
United Kingdom
New Zealand
Hungary
Czech Republic
Slovak Republic
Germany
Netherlands
Italy
Portugal
Belgium
Slovenia
Greece
France
Finland
Turkey
Spain
Poland
Iceland
Chile
Norway
India
Brazil
China
Russia
Behind the benchmark
10
20
30
40
50
60
70
80
90
24
OECD
South Korea
Japan
Australia
Turkey
Chile
New Zealand
Greece
Estonia
United States
Israel
Finland
Italy (2011)
Slovenia
France
United Kingdom
Switzerland
Germany
Spain
Hungary
Portugal
Poland
Sweden
Austria
Denmark
Belgium
Netherlands
Iceland
Czech Republic
Slovak Republic
Canada
Mexico
Ireland
Norway
Behind the benchmark
10
20
30
40
50
60
70
EUROZONE
Belgium
Ireland
Switzerland
Iceland
Estonia
Hungary
Chile
Netherlands
Sweden
Czech Republic
Slovak Republic
Portugal
United Kingdom
New Zealand
Denmark
Poland
Spain (2011)
France
Austria
Australia
Norway
Finland (2010)
Canada (2011)
Slovenia
Israel (2011)
Mexico
United States (2011)
Turkey
Germany
Italy
Greece
South Korea
Japan (2011)
Globalisation is characterised by increasing investment across national borders. This development should
be viewed in the light of a wish to
strengthen ties with foreign customers and benefit from favourable production conditions in other parts of
the world.
The holdings of foreign direct investment indicate the attractiveness of a
countrys general business conditions
such as taxes, access to raw materials, wages and level of education.
Belgium is the OECD country where
FDI holdings take up the greatest
share of the economy. Ireland and
Switzerland come next.
Brazil
Russia
India (2009)
China
Behind the benchmark
Source UNCTAD
50
100
150
200
250
25
EUROZONE
Belgium
Switzerland
Ireland
Netherlands
Sweden
Iceland
United Kingdom
Denmark
France
Finland
Austria
Spain
Germany
Norway
Canada
Chile
Portugal
United States
Israel
Italy
Hungary
Australia
Estonia
Japan
Slovenia
Greece
South Korea
Poland
Mexico
New Zealand
Czech Republic
Slovak Republic
Turkey
Russia
Brazil
India
China
Behind the benchmark
Source UNCTAD
50
100
150
200
250
EUROZONE
Belgium
Ireland
Chile
Estonia
Hungary
Iceland
Israel
Australia
Norway
Switzerland
Sweden
Czech Republic
United Kingdom
Poland
Portugal
Canada
Slovak Republic
Spain
Mexico
Turkey
Austria
New Zealand
United States
France
Netherlands
Slovenia
South Korea
Germany
Greece
Finland
Italy
Denmark
Japan
The ability to attract foreign investment is central for domestic companies in a globalised world economy
and vital for economic growth in
society. A high investment flow indicates that foreign investors anticipate a major growth potential.
Belgium has clearly recorded the
highest average inflow of FDI in
the past 5 years corresponding to
almost 18 per cent of GDP. Ireland
and Chile take the following two
places.
Russia
Brazil
India
China
Behind the benchmark
Source UNCTAD
10
15
20
26
EUROZONE
Belgium
Switzerland
Ireland
Chile
Sweden
Netherlands
Norway
Austria
United Kingdom
Canada
France
Hungary
Finland
South Korea
Denmark
Germany
Israel
Estonia
United States
Spain
Italy
Japan
Australia
Mexico
Portugal
Poland
Czech Republic
Slovak Republic
Slovenia
Greece
Turkey
New Zealand
Iceland
Russia
China
India
Brazil
Source UNCTAD
-5
10
15
OECD
Mexico (2011)
Slovenia
Chile
Estonia
Greece
Korea
Hungary
Turkey
Japan
Norway
Austria
Switzerland
United States
Israel (2011)
Canada
Australia (2011)
Ireland
Poland
Portugal
United Kingdom
Spain
Italy
Czech Republic
Slovak Republic
New Zealand
Denmark
Netherlands
Germany (2011)
Belgium
France
Sweden
Finland
Iceland
Behind the benchmark
An increasing share of direct investments takes place in markets outside the OECD. Such investments
can be explained by low production
costs, but another important goal
is to get hold of a share of the high
growth in several of these markets.
Mexico has the greatest share of its
direct investment holding in emerging markets. Slovenia and Chile are
runners-up.
20
40
60
80
100
27
EUROZONE
Ireland
United Kingdom
New Zealand
Netherlands
Finland
Estonia
Denmark
Chile
Belgium
Portugal
Slovak Republic
Sweden
France
Israel
Germany
Austria
Spain
Italy
Hungary
Czech Republic
United States
Australia
Canada
South Korea
Greece
Slovenia
Poland
Norway
Turkey
Switzerland
Japan
Mexico
Iceland
Brazil
China
India
Russia
Behind the benchmark
10
Index 0 -10
China
India
Russia
Brazil
10
Index 0 -10
28
EUROZONE
Ireland
Sweden
Israel
Denmark
Chile
Netherlands
Australia
Turkey
Mexico
Finland
South Korea
Norway
Switzerland
Germany
Iceland
Canada
United Kingdom
Japan
United States
Portugal
Italy
Estonia
Czech Republic
New Zealand
Belgium
Slovak Republic
Austria
Greece
Spain
Slovenia
Poland
France
Hungary
India
China
Brazil
Russia
Behind the benchmark
10
Index 0 -10
OECD
Ireland
Sweden
Israel
Netherlands
Canada
Australia
Portugal
Chile
New Zealand
United Kingdom
Denmark
Belgium
United States
Poland
Mexico
Turkey
Austria
Spain
Switzerland
Norway
Germany
Iceland
Italy
Finland
Greece
Czech Republic
South Korea
Slovak Republic
Estonia
Japan
Hungary
France
Slovenia
China
Brazil
India
Russia
Behind the benchmark
10
Index 0 -10
29
EUROZONE
Switzerland
Sweden
Poland
Netherlands
Ireland
Germany
Belgium
Finland
Mexico
Austria
Denmark
Israel
Hungary
United Kingdom
Chile
United States
Turkey
Canada
Greece
Norway
Czech Republic
Australia
France
South Korea
New Zealand
Slovak Republic
Italy
Iceland
Estonia
Portugal
Slovenia
Spain
Japan
Brazil
India
China
Russia
10
Index 0 -10
EUROZONE
Chile
Germany
Sweden
South Korea
Switzerland
Canada
Austria
Australia
Ireland
New Zealand
Netherlands
Denmark
United States
Japan
Finland
Norway
United Kingdom
Estonia
Turkey
Iceland
Czech Republic
Slovak Republic
Israel
Belgium
Slovenia
Italy
Mexico
France
Spain
Portugal
Poland
Greece
Hungary
Brazil
China
India
Russia
Behind the benchmark
10
Index 0 -10
30
Switzerland
Sweden
Netherlands
United States
Finland
Denmark
Australia
Ireland
Canada
United Kingdom
Iceland
Germany
South Korea
Norway
Japan
Belgium
New Zealand
Austria
France
Estonia
Israel
Portugal
Spain
Czech Republic
Chile
Slovenia
Poland
Hungary
Turkey
Slovak Republic
Italy
Mexico
Greece
1
2
3
3
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
25
27
28
29
30
31
32
33
Switzerland is most
successful in terms of average
ranking in benchmarks for
Productivity and innovation.
(1)
(2)
(3)
(5)
(9)
(6)
(4)
(10)
(8)
(11)
(7)
(12)
(13)
(14)
(17)
(16)
(19)
(15)
(18)
(20)
(21)
(22)
(23)
(24)
(25)
(26)
(27)
(27)
(29)
(29)
(31)
(32)
(33)
0
10
15
20
25
30
31
The level of development varies across the OECD, and so does the specific
need for development in the areas of productivity and innovation. The most
advanced countries are strongly reliant on the design and development of
cutting-edge innovations in order to maintain their competitive advantage.
Countries less advanced can still reap benefits from adopting existing technologies. Developing a country's level of productivity and innovation includes prioritizing investment in research and development, taking out patents and facilitating entrepreneurship.
Switzerland excels as the country with the highest levels of Productivity and innovation. The country has particularly strong university/industry research collaboration
and is leading in both patent applications and innovation performance. Switzerland
has been successful in attracting businesses in sectors with high patent activity. Finally, Switzerland has the most widespread use of fixed broadband subscriptions and is
one of the most energy efficient countries in the OECD.
Sweden is the runner-up in Productivity and innovation, and good rankings include
high patent activity including European patent applications and triadic patent families. The country also has a high level of innovation performance.
The Netherlands earns third place as a result of the high quality of infrastructure, efficient supply of electricity, and a large number of fixed broadband subscribers.
32
OECD
Australia
Estonia
South Korea
Norway
Chile
Canada
Mexico
Czech Republic
Austria
Belgium
Switzerland
Japan
New Zealand
Poland
Turkey
France
United States
Finland
Sweden
Israel
Slovak Republic
Spain
Germany
Italy
Denmark
Hungary
Slovenia
Netherlands
Portugal
United Kingdom
Iceland
Greece
Ireland
Note Investment covers private sector investment, public sector investment and housing
investment.
China
India
Russia
Brazil
Behind the benchmark
10
20
30
40
50
Per cent
OECD
Poland
South Korea
Estonia
Czech Republic
Slovenia
Sweden
Netherlands
Japan
Norway
Comparisons of public sector investment across countries are influenced by the fact that some countries have developed the public
sector at a much earlier stage than
others, and currently do not need
investment at the same scale.
Furthermore, the definition of public
investment differs among the countries suggesting cautious interpretation of the figure.
Hungary
France
Spain
Portugal
Ireland
Finland
Slovak Republic
Switzerland
Denmark
Italy
Iceland
Israel
Belgium
Germany
Greece
Austria
Russia (2009)
33
Brazil
10
20
30
40
50
60
70
80
OECD
Poland
Ireland
South Korea
Estonia
Spain
Japan
Slovak Republic
New Zealand
Australia
United States
Mexico
Iceland
Denmark
Portugal
Sweden
Canada
Chile
Norway
France
Austria
Germany
Turkey
Belgium
Finland
Italy
Switzerland
Hungary
Czech Republic
Israel
Netherlands
United Kingdom
Slovenia
Greece
Countries with a low level of productivity will often develop faster than
countries with a high productivity level because the aforementioned countries can more easily improve their
productivity through imports of modern capital equipment and reorganisation of their production structure.
Brazil
-3
-2
-1
34
OECD
Israel
South Korea
Finland
Japan
Sweden
Iceland (2009)
Denmark
Germany
Switzerland (2008)
United States
Austria
Slovenia
Estonia
France
Australia (2010)
Belgium
Netherlands (2010)
Czech Republic
United Kingdom
Canada
Ireland
Norway
Portugal
Spain
New Zealand
Italy
Hungary
Turkey
Poland
Slovak Republic
Mexico
Chile (2010)
China
Russia
Behind the benchmark
Russia
China
Behind the benchmark 0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
35
OECD
Israel
Switzerland
United Kingdom
Belgium
United States
Germany
Netherlands
Australia
Japan
Finland
France
Ireland
Sweden
Canada
Denmark
New Zealand
Portugal
Hungary
Norway
Austria
South Korea
Estonia
Czech Republic
Iceland
Slovenia
Spain
Italy
Chile
Mexico
Poland
Turkey
Slovak Republic
Grkenland
India
China
Brazil
Russia
Behind the benchmark
Index 1-7
EUROZONE
Switzerland
Finland
United States
United Kingdom
Belgium
Israel
Germany
Sweden
Netherlands
Ireland
Norway
Australia
Japan
Canada
New Zealand
Denmark
Austria
Iceland
South Korea
Portugal
France
Czech Republic
Estonia
Chile
Hungary
Mexico
Spain
Turkey
Slovenia
Italy
Poland
Slovak Republic
Greece
China
India
Brazil
Russia
Behind the benchmark
Index 1-7
36
EUROZONE
Switzerland
Sweden
Finland
Germany
Netherlands
Denmark
Austria
Japan
Belgium
France
Iceland
Israel
Ireland
South Korea
United States
Norway
United Kingdom
Canada
Italy
Slovenia
Australia
Spain
Estonia
New Zealand
Czech Republic
Hungary
Poland
Portugal
Greece
Slovak Republic
Turkey
Chile
Mexico
China
Russia
Brazil
India
Behind the benchmark
100
200
300
400
500
600
700
800
900
OECD
Japan
Switzerland
Sweden
Germany
Finland
Netherlands
Denmark
United States
Israel
Austria
South Korea
France
Belgium
United Kingdom
Norway
Ireland
Canada
Italy
Australia
New Zealand
Iceland
Spain
Slovenia
Hungary
Estonia
Czech Republic
Portugal
Slovak Republic
Greece
Chile
Poland
Turkey
Mexico
China
Russia
Brazil
India
Behind the benchmark
10
20
30
40
50
60
70
80
90
100
110
37
Switzerland
Sweden
Germany
Denmark
Finland
Netherlands
Belgium
Iceland
United Kingdom
Austria
Ireland
France
Slovenia
Estonia
Norway
Italy
Spain
Portugal
Czech Republic
Greece
Slovak Republic
Hungary
Poland
Turkey
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
Index 0-1
OECD
Turkey
Australia (2011)
Chile (2011)
Czech Republic (2011)
Estonia
South Korea
Iceland (2010)
Japan
Slovak Republic
Hungary
Ireland
Denmark
United Kingdom
United States
Poland
Portugal
Germany
France
Slovenia
Israel
Belgium
Mexico
Finland
Netherlands
Norway
Italy
Sweden
Switzerland
Greece
Austria
Spain
Russia
China
Brazil
Behind the benchmark
10
20
30
40
50
Per cent
38
EUROZONE
Chile
Estonia
United States
Turkey
Iceland (2010)
Australia (2011)
Netherlands
Slovak Republic
Austria
Poland
Hungary
United Kingdom
Portugal
Czech Republic (2011)
Norway
South Korea
Israel
Greece
Sweden
Ireland
Finland
Switzerland
Spain
Slovenia
Denmark
Germany
Belgium
France
Italy
Japan
Brazil
China
Russia
Behind the benchmark
10
15
20
25
Per cent
OECD
New Zealand
Canada
Australia
Portugal
Slovenia
Belgium
Netherlands
Finland
Ireland
Denmark
Sweden
Hungary
France
Iceland
Norway
Estonia
South Korea
United States
Israel
Greece
United Kingdom
Chile
Turkey
Italy
Mexico
Poland
Switzerland
Slovak Republic
Germany
Japan
Austria
Czech Republic
Spain
In order to support the establishment of new businesses it is important that the structures and legislation of society provide good
conditions for entrepreneurship.
Again this year, New Zealand wins
most points and gets the maximum
score (100 per cent). Canada and
Australia are close to 100 per cent in
second and third place.
Russia
China
India
Brazil
Behind the benchmark
10
20
30
40
50
60
70
80
90
100
Per cent
39
EUROZONE
Ireland
Japan
Canada
Belgium
Finland
Norway
Australia
Denmark
Iceland
United Kingdom
Austria
Netherlands
Germany
New Zealand
South Korea
Spain
United States
Italy
Mexico
France
Hungary
Israel
Portugal
Slovenia
Sweden
Czech Republic
Estonia
Poland
Switzerland
Chile
Turkey
Greece
Slovak Republic
China
Russia
Brazil
India
Behind the benchmark
Years
Denmark
Switzerland
Sweden
Finland
Norway
Ireland
Belgium
Hungary
United Kingdom
France
Netherlands
Germany
Portugal
Austria
Spain
Italy
Czech Republic
Greece
Poland
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
0.45
40
Estonia (2009)
France
Canada (2009)
Israel
Portugal
Hungary
Slovenia (2009)
Sweden
New Zealand
Italy
Spain
Denmark*
United States
0.2
0.4
0.6
0.8
1.0
1.2
EUROZONE
United States
Switzerland
Israel
Ireland
Sweden
Canada
Australia
Chile
Germany
New Zealand
United Kingdom
Netherlands
Estonia
Finland
Norway
South Korea
Iceland
Denmark
Turkey
Mexico
Japan
Belgium
Austria
Greece
Slovak Republic
Czech Republic
Portugal
Italy
France
Slovenia
Poland
Spain
Hungary
India
China
Brazil
Russia
Behind the benchmark
10
Index 0-10
41
EUROZONE
Ireland
Israel
Poland
Turkey
Sweden
United States
Iceland
Denmark
New Zealand
Canada
Switzerland
Mexico
Portugal
Australia
South Korea
United Kingdom
Netherlands
Estonia
Slovak Republic
Greece
Norway
Italy
Finland
Belgium
Chile
Czech Republic
Germany
Austria
Japan
Spain
Hungary
France
Slovenien
Brazil
India
China
Russia
Behind the benchmark
10
Index 0-10
EUROZONE
Switzerland
Netherlands
Denmark
South Korea
France
Norway
Iceland
United Kingdom
Germany
Belgium
Canada
Sweden
Finland
United States
New Zealand
Japan
Australia
Austria
Israel
Spain
Estonia
Slovenia
Greece
Ireland
Portugal
Italy
Hungary
Czech Republic
Poland
Slovak Republic
Chile
Mexico
Turkey
Behind the benchmark
10
15
20
25
30
35
40
45
42
Iceland
Norway
Sweden
Denmark
Czech Republic
Belgium
Ireland
Germany
Netherlands
United Kingdom
Finland
Portugal
Slovenia
Spain
Slovak Republic
Austria
Estonia
France
Hungary
Poland
Turkey (2010)
Greece
Italy
Source Eurostat
10
15
25
20
30
35
40
OECD
New Zealand
Switzerland
Finland
Canada
Australia
Chile
United Kingdom
Denmark
Estonia
United States
Germany
Ireland
Austria
Hungary
Sweden
Netherlands
Norway
Spain
Japan
South Korea
Slovak Republic
France
Iceland
Belgium
Portugal
Israel
Czech Republic
Poland
Turkey
Italy
Greece
Mexico
Slovenia
Brazil
China
India
Russia
Behind the benchmark
Index 0-10
43
EUROZONE
Finland
Estonia
New Zealand
Switzerland
Sweden
Chile
Netherlands
Ireland
Iceland
United Kingdom
Canada
Germany
Norway
Turkey
United States
Japan
Austria
South Korea
Denmark
Israel
Mexico
Spain
Australia
France
Portugal
Poland
Belgium
Czech Republic
Slovenia
Slovak Republic
Hungary
Greece
Italy
China
India
Russia
Brazil
Behind the benchmark
Index 1-7
EUROZONE
Netherlands
Finland
France
Switzerland
Germany
Spain
Japan
South Korea
Iceland*
Belgium
United States
Canada
Sweden
United Kingdom
Portugal
Austria
Denmark
New Zealand
Ireland
Australia
Norway
Czech Republic
Chile
Turkey
Slovenia
Estonia
Italy
Israel
Greece
Mexico
Hungary
Slovak Republic
Poland
China
India
Russia
Brazil
Behind the benchmark
Index 1-7
44
OECD
Ireland
Switzerland
United Kingdom
Denmark
Italy
Portugal
Spain
Austria
Germany
Greece
Israel
Turkey
Japan
Netherlands
Norway
Chile
France
Mexico
Australia
Hungary
Slovenia
Poland
Slovak Republic
Sweden
Belgium
New Zealand
Czech Republic
United States
South Korea
Canada
Finland
Estonia
Iceland
Brazil
India
China
Russia
Behind the benchmark
0.0
0.1
0.2
0.3
0.4
0.5
0.6
EUROZONE
Switzerland
Netherlands
Austria
Finland
Denmark
Iceland
United Kingdom
France
Norway
Sweden
Canada
Ireland
Czech Republic
Belgium
Portugal
Spain
Slovenia
Australia
United States
Slovak Republic
Germany
New Zealand
Japan
Italy
South Korea
Israel
Hungary
Poland
Greece
Chile
Estonia
Turkey
Mexico
China
Brazil
Russia
India
Behind the benchmark
Index 1-7
45
46
Canada
South Korea
Switzerland
Australia
United Kingdom
Finland
Ireland
New Zealand
United States
Norway
Sweden
Japan
Denmark
Netherlands
Estonia
Austria
Iceland
Chile
Germany
Israel
France
Belgium
Poland
Czech Republic
Spain
Mexico
Portugal
Slovenia
Greece
Hungary
Turkey
Italy
Slovak Republic
1
2
2
4
5
6
6
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
(1)
(3)
(2)
(5)
(14)
(6)
(9)
(4)
(7)
(13)
(8)
(10)
(10)
(10)
(17)
(16)
(15)
(19)
(18)
(22)
(21)
(20)
(24)
(23)
(25)
(26)
(27)
(28)
(31)
(30)
(32)
(33)
(29)
0
10
15
20
25
30
47
QUALIFIED LABOUR
48
China (2010)
Russia
Brazil (2011)
India (2010)
Behind the benchmark
10
20
30
40
50
60
70
80
90
Per cent
EUROZONE
Iceland
Sweden
New Zealand
Switzerland
Norway
Japan
Israel
Germany
Estonia
Chile
South Korea
United States
Denmark
Canada
Australia
Finland
Netherlands
United Kingdom
Mexico
Ireland
Spain
Portugal
Czech Republic
Slovak Republic
France
Austria
Italy
Greece
Poland
Belgium
Hungary
Slovenia
Turkey
China (2010)
India (2010)
Brazil (2011)
Russia
Behind the benchmark
10
20
30
40
50
60
70
80
90
Per cent
49
EUROZONE
South Korea
Norway
Japan
Switzerland
Austria
Mexico
Germany
Iceland
Australia
Chile
New Zealand
Netherlands
Israel
Czech Republic
Denmark
Canada
United States
United Kingdom
Sweden
Finland
Estonia
Belgium
Turkey
Hungary
Poland
France
Slovenia
Italy
Ireland
Slovak Republic
Portugal
Spain
Greece
Russia
Behind the benchmark
10
15
20
25
30
Per cent
EUROZONE
Mexico
South Korea (2011)
Greece
Chile
Poland
Israel
Estonia
Hungary
Turkey
Czech Republic
United States
Slovak Republic
Italy
Japan
New Zealand
Australia
Canada
Iceland
Austria
Portugal
Spain
Finland
United Kingdom
Slovenia
Switzerland (2011)
Sweden
Belgium
Denmark
Ireland
France
Norway
Germany
Netherlands
Russia
Behind the benchmark
500
1,000
1,500
2,000
2,500 Hours
50
3.05 Share of employees with tertiary education in the private sector 2012
EUROZONE
Ireland
Belgium
Finland
United Kingdom
Spain
Estonia
France
Norway
Sweden
Netherlands
Iceland
Germany
Denmark
Slovenia
Poland
Greece
Hungary
Austria
Czech Republic
Slovak Republic
Portugal
Italy
10
15
20
25
30
40
35
Per cent
EUROZONE
Iceland
Denmark
Switzerland
Estonia
Canada
United Kingdom
Ireland
Hungary
United States
New Zealand
Israel
Chile
Turkey
Greece
Norway
South Korea
Poland
Japan
Netherlands
Mexico
Austria
Sweden
Germany
Portugal
Czech Republic
Finland
Spain
Australia
France
Italy
Slovak Republic
Belgium
Slovenia
China
Russia
India
Brazil
Behind the benchmark
10
Index 0-10
51
EUROZONE
Chile
South Korea
Turkey
Australia
Mexico
Iceland
Denmark
Sweden
Canada
Finland
Estonia
Norway
Switzerland
Austria
United Kingdom
Netherlands
Spain
France
Germany
Hungary
Ireland
Belgium
Poland
Slovenia
Portugal
Czech Republic
Italy
Slovak Republic
Greece
Brazil (2009
Behind the benchmark
10
15
20
25
35
30
40
EUROZONE
Denmark
Switzerland
Ireland
Austria
Japan
Norway
Sweden
Germany
Iceland
Netherlands
Finland
Israel
United States
Canada
New Zealand
Mexico
Turkey
Belgium
United Kingdom
Australia
Chile
Czech Republic
Estonia
South Korea
Slovak Republic
France
Italy
Hungary
Greece
Portugal
Poland
Slovenia
Spain
China
Brazil
India
Russia
Behind the benchmark
10
Index 0-10
52
EUROZONE
Australia
Greece
Turkey
New Zealand
South Korea
United Kingdom
United States
Poland
Chile
Sweden
Estonia
Hungary
Belgium
Italy
Spain
Austria
Ireland
Finland
Canada
Japan
Norway
Czech Republic
Germany
Iceland
Slovak Republic
France
Netherlands
Denmark
Slovenia
Israel
Portugal
Switzerland
Behind the benchmark
10
20
30
40
50
60
70
80
90
EUROZONE
Norway
Sweden
Canada
Iceland
Finland
Ireland
Denmark
Israel
Switzerland
Chile
United States
Australia
Japan
Netherlands
New Zealand
United Kingdom
Mexico
Belgium
Turkey
Poland
France
Spain
Portugal
Estonia
Germany
Czech Republic
Greece
South Korea
Austria
Slovenia
Slovak Republic
Hungary
Italy
Equal opportunities for all, irrespective of age, gender, culture and religion are important prerequisites for
a well-functioning society. The institutional framework for equality is
central in order to exploit the human
resources of society in the best
possible way and support economic
and social growth.
The Nordic countries are generally
characterised by a high degree of
equality and equal opportunities.
In Brazil, senior managers assess
that the countrys legislation on
equal opportunities supports
economic growth to a degree that
corresponds to both Eurozone and
OECD averages.
Brazil
India
China
Russia
Behind the benchmark
10
Index 0-10
53
South Korea
United States
Norway*
Denmark
New Zealand*
Canada
Ireland
Iceland
United Kingdom
Finland
Australia
Israel
Belgium
Netherlands
Chile
Sweden
France
Estonia*
Mexico
Portugal
Switzerland*
Slovenia
Austria
Poland
Spain
Germany (2009)
Japan
Italy
Czech Republic
Slovak Republic
Hungary*
Turkey*/**
Tertiary school
Brazil
Russia
India (2009)
*
**
OECD
Eurozone
Behind the benchmark
United States
Canada
South Korea
Chile
Finland**
Denmark
Sweden
Netherlands
Norway
Israel
Australia
Estonia
New Zealand
Ireland**
Japan
Austria*
France**
Poland
Portugal**
Belgium**
Mexico
United Kingdom
Spain
Switzerland**/****
Germany (2009)
Slovenia**
Iceland***
Czech Republic*
Italy**
Slovak Republic
Hungary**/****
*
**
***
****
Russia**/***
India (2009)**/***/****
Brazil****
OECD
Eurozone
Behind the benchmark
No government expenditure
No data for government expenditure
for loans
No data for government for subsidies
No data for private expenditure
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
54
3.13 Intended instruction time in public institutions per year for 7 to 14-year-olds
(average), 2011
OECD
EUROZONE
Primary schooling is an important
contributor in providing pupils with
basic competences needed for their
continuing education, such as reading and mathematical skills. The
planned instruction time for pupils
in the 7-14 age group is an indicator
of the level of education in the country, and of the degree to which funding for education is spent on instruction time. A high level of instruction
time helps to increase the level of
competence.
Chile
Australia
France
Israel
Netherlands
Spain
Italy
Mexico
Portugal
Canada
Ireland
Belgium
Iceland
Turkey
Austria
Denmark
Japan
Slovak Republic
Germany
Norway
Greece
Hungary
Sweden
Slovenia
Czech Republic
South Korea
Poland
Finland
Estonia
Russia
Behind the benchmark 400
500
600
700
800
900
1,000
1,100 Hours
China (Shanghai)
Russia
Brazil
Behind the benchmark 350
400
450
500
550
600
PISA score
55
EUROZONE
South Korea
Japan
Switzerland
Netherlands
Estonia
Finland
Canada
Poland
Belgium
Germany
Austria
Australia
Ireland
Slovenia
Denmark
New Zealand
Czech Republic
France
United Kingdom
Iceland
Norway
Portugal
Italy
Spain
Slovak Republic
United States
Sweden
Hungary
Israel
Greece
Turkey
Chile
Mexico
China (Shanghai)
Russia
Brazil
Behind the benchmark
350
400
450
500
550
600
650
PISA score
China (Shanghai)
Russia
Brazil
Behind the benchmark
350
400
450
500
550
600
PISA score
56
OECD
South Korea
Czech Republic
Slovak Republic
Poland
Slovenia
Canada
Sweden
Finland
Israel
Switzerland
United States
Austria
Chile
Hungary
Germany
Estonia
Ireland
Australia
United Kingdom
Norway
France
Belgium
Netherlands
New Zealand
Denmark
Greece
Iceland
Italy
Spain
Portugal
Mexico
Turkey
Russia
Brazil
Behind the benchmark
20
40
60
80
100
Per cent
OECD
South Korea
Japan
Canada
Ireland
United Kingdom
Norway
New Zealand
Israel
Australia
United States
France
Sweden
Belgium
Chile
Switzerland
Netherlands
Finland
Iceland
Poland
Spain
Estonia
Denmark
Slovenia
Greece
Hungary
Germany
Portugal
Slovak Republic
Czech Republic
Mexico
Austria
Italy
Turkey
Russia
Brazil
China (2010)
Behind the benchmark
10
20
30
40
50
60
70
Per cent
57
Fast completion of tertiary education helps to ensure a large workforce, high tax income and low
government expenditure. This is
particularly important at a time
when the workforce in many
European countries will be diminishing in coming years due to an
ageing population.
Belgium
Netherlands
Turkey
Estonia
Slovak Republic
United Kingdom
Spain
Hungary
Czech Republic
Portugal
Poland
Italy
Norway
Slovenia
Denmark
Austria
Germany
Switzerland
Finland
Sweden
10
20
30
40
50
60
70
80
90
South Korea
Germany
Greece
Finland
France (2009)
Austria
Estonia
Spain
Japan
Mexico
Czech Republic
Portugal
Sweden
Slovenia
United Kingdom
Belgium
Italy
Switzerland
Ireland
Slovak Republic
Canada
Denmark
Turkey
Hungary
Israel
New Zealand
Chile
Australia
Poland
Norway
Iceland (2010)
United States
Netherlands
Russia
Brazil
Eurozone
OECD
Behind the benchmark
10
20
30
40
50
60
70
80
90
100
Per cent
58
EUROZONE
United States
Ireland
Czech Republic
Slovenia
Poland (2008)
Slovak Republic
Portugal
United Kingdom
Hungary
Austria
South Korea
Canada
Spain
France
Australia
Israel
Finland
Japan (2007)
Netherlands (2008)
Estonia
Italy (2008)
Belgium
Germany
Norway
Greece
Sweden
Denmark
New Zealand
50,000
100,000
150,000
200,000
250,000
OECD
New Zealand
Switzerland
Australia
United Kingdom
Austria
Canada
France
Ireland
Denmark
Belgium
Sweden
Germany
Czech Republic
Netherlands
Norway
Iceland
Portugal
Spain
Finland
Greece
Hungary
Slovak Republic
Japan
Estonia
Italy
Slovenia
South Korea
Poland
Israel
Chile
Turkey
Russia
China
Brazil
Behind the benchmark
10
15
20
25
30
59
3.23 Attractive business environment for foreign highly skilled people, 2013
OECD
EUROZONE
Switzerland
United States
Australia
United Kingdom
Canada
Netherlands
Ireland
Norway
Chile
Austria
New Zealand
Poland
Mexico
Germany
Belgium
Sweden
Turkey
South Korea
Denmark
Czech Republic
France
Israel
Estonia
Finland
Spain
Japan
Portugal
Hungary
Slovak Republic
Italy
Iceland
Greece
Slovenia
Brazil
China
India
Russia
10
Index 0-10
OECD
Switzerland
Germany
United Kingdom
France (2010)
Denmark
Ireland
Finland
Austria
Sweden
Norway
Czech Republic
Slovenia
Belgium
Netherlands
Italy
Spain
Estonia
United States
Portugal
Iceland (2010)
Greece
Japan
Poland (2009)
Hungary
Turkey
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
60
EUROZONE
Denmark
Switzerland
Iceland
Sweden
Finland
Norway
Netherlands
United Kingdom
Austria
Slovenia
Estonia
Czech Republic
Spain
Portugal
Germany
Ireland
Belgium
Italy
France
Poland
Turkey
Slovak Republic
Greece
Hungary
10
15
20
25
30
35
61
62
Switzerland
South Korea
Estonia
Finland
Chile
Norway
New Zealand
Sweden
Australia
Denmark
Slovak Republic
Czech Republic
Germany
Iceland
Poland
Canada
Netherlands
Austria
Hungary
Slovenia
Israel
United States
Turkey
United Kingdom
France
Ireland
Mexico
Japan
Italy
Portugal
Spain
Greece
Belgium
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
25
27
28
29
30
31
32
33
Switzerland is most
successful in terms of
average ranking in the
benchmarks for Public
economy.
(1)
(2)
(3)
(6)
(7)
(4)
(9)
(8)
(5)
(10)
(11)
(12)
(13)
(14)
(16)
(18)
(19)
(15)
(20)
(17)
(23)
(22)
(21)
(24)
(28)
(32)
(27)
(26)
(29)
(24)
(30)
(31)
(33)
0
10
15
20
25
30
PUBLIC ECONOMY
Among other lessons, the financial crisis and the following European debt
crisis have taught the world how important it is to monitor the health of a
country's public sector. A country's economic robustness is dependent not
only on a strong and prosperous private sector but also on an efficient and
balanced public sector. Among other factors, the fourth pillar assesses budget
balance, public debt, public expenditure, and corruption levels.
Switzerland excels as the OECD country with the best average ranking in Public economy. The country has the lowest public expenditure as a share of GDP. Additionally,
Switzerland is one of few OECD countries with a structural surplus on its public budgets and the Swiss public sector is among the smallest in the OECD.
South Korea ranks second with the largest structural surplus on its public budgets.
Furthermore, South Korea places the highest priority on investing government funds in
areas most likely to generate future growth, such as education and R&D.
Estonia is in third place. The country has the lowest public gross debt as a percentage
of GDP as well as frequent use of the Internet for communication between the public
and private sectors.
63
64
EUROZONE
Switzerland
Mexico
Chile
Turkey
United States
South Korea
Slovak Republic
Greece
Poland
Ireland
Portugal
Australia
Austria
Estonia
Germany
New Zealand
Italy
Spain
Hungary
Japan
Czech Republic
Slovenia
Norway
Canada
United Kingdom
Israel
France
Belgium
Finland
Iceland
Sweden
Netherlands
Denmark
China
Russia
Behind the benchmark
Source OECD.Stat
10
15
20
25
30
EUROZONE
South Korea
Switzerland
Turkey
Slovak Republic
Estonia
Israel
Japan
Poland
Czech Republic
Iceland
Germany
Norway
Spain
Ireland
Greece
United Kingdom
Italy
Portugal
Hungary
Netherlands
Austria
Slovenia
Belgium
Sweden
France
Finland
Denmark
Russia (2008)
10
20
30
40
50
60
70
65
EUROZONE
South Korea
Greece
Italy
Switzerland
Germany
Sweden
Denmark
Norway
New Zealand
Finland
Austria
Netherlands
Czech Republic
Iceland
Belgium
Hungary
Portugal
Australia
France
Canada
Spain
Ireland
Poland
United States
United Kingdom
Japan
Russia*
China*
Brazil*
India*
Behind the benchmark
-10
-8
-6
-4
-2
OECD
Estonia
Norway
Australia
South Korea
New Zealand
Switzerland
Sweden
Czech Republic
Denmark
Slovak Republic
Poland
Finland
Israel
Slovenia
Germany
Netherlands
Austria
Hungary
Canada
Spain
United States
Belgium
United Kingdom
France
Iceland
Ireland
Portugal
Italy
Greece
Japan
The size of the public debt is significant for the governments freedom
of economic action. A country with
high debt is burdened with significant interest payments. Public gross
debt primarily covers the liabilities
of the public sector.
Estonia, Norway and Australia had
the lowest public gross debt in
2013.
40
80
120
160
200
240
66
Public net debt comprises all financial assets and liabilities in the
public sector. The size of public
debt is a determining factor in a
states ability to act economically. A
country with high debt is burdened
with sizeable interest payments.
Norway
Finland
South Korea
Estonia
Sweden
Switzerland
New Zealand
Denmark
Australia
Czech Republic
Slovenia
Slovak Republic
Poland
Canada
Netherlands
Germany
Austria
Iceland
Hungary
Spain
France
United Kingdom
United States
Belgium
Ireland
Portugal
Italy
Greece
Japan
-160
-120
-80
-40
40
80
120
160
200
South Korea
Poland
Switzerland
Norway
Iceland
Slovenia
Sweden
Netherlands
Czech Republic
Spain
Portugal
Denmark
Japan
Finland
Israel
France
Hungary
Belgium
Ireland
Germany
Austria
Italy
OECD
Eurozone
10
15
20
25
30
35
40
Per cent
67
EUROZONE
Finland (2011)
Hungary
Canada
Japan (2011)
Norway
France (2011)
Denmark
South Korea (2011)
United States (2011)
Austria (2011)
Switzerland
Sweden
Australia
Slovak Republic
Germany
Netherlands (2011)
Italy (2011)
Portugal
Czech Republic (2010)
Spain (2010)
United Kingdom
Ireland (2011)
New Zealand
Greece (2011)
Turkey (2009)
0.2
0.4
0.6
0.8
1.0
1.2
1.4
OECD
United Kingdom
Finland
Iceland
Netherlands
Hungary
Czech Republic
Estonia
Germany
Sweden
Slovak Republic
Switzerland
Poland
Denmark
Slovenia
Italy
Spain
Austria
Norway
Ireland
Portugal
France
Greece
Belgium
10
20
30
40
50
60
68
Finland
Iceland
France
Denmark
Estonia
Ireland
Sweden
Czech Republic
Norway
Slovenia
Austria
Portugal
Slovak Republic
United Kingdom
Netherlands
Poland
Belgium
Italy
Greece
Hungary
Germany
Spain
Turkey
Source Eurostat
10
20
30
40
50
60
70
80
90
100
EUROZONE
Denmark
New Zealand
Finland
Sweden
Norway
Switzerland
Netherlands
Australia
Canada
Germany
Iceland
United Kingdom
Belgium
Japan
United States
Ireland
Chile
France
Austria
Estonia
Portugal
Israel
Poland
Spain
Slovenia
South Korea
Hungary
Turkey
Czech Republic
Slovak Republic
Italy
Greece
Mexico
Brazil
China
India
Russia
Behind the benchmark
Index 0-10
69
70
5.00 Costs
Switzerland
Chile
Poland
Ireland
Slovak Republic
Canada
Czech Republic
United States
Japan
Spain
South Korea
Turkey
Portugal
Estonia
Israel
Sweden
Greece
Slovenia
United Kingdom
Mexico
Germany
Hungary
Australia
France
Iceland
Netherlands
Austria
New Zealand
Belgium
Denmark
Norway
Finland
Italy
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
18
20
21
22
23
23
25
26
27
28
29
30
31
32
32
(1)
(2)
(13)
(4)
(3)
(5)
(7)
(9)
(10)
(6)
(8)
(11)
(15)
(26)
(16)
(21)
(12)
(20)
(19)
(28)
(14)
(24)
(22)
(24)
(22)
(16)
(18)
(29)
(31)
(32)
(27)
(30)
(33)
0
10
15
20
25
71
COSTS
72
EUROZONE
Mexico (2011)
Chile
United States
Australia (2011)
South Korea
Turkey
Switzerland
Ireland
Slovak Republic
Japan (2011)
Canada
Israel
Poland (2011)
Portugal
Estonia
Spain
New Zealand
Greece
United Kingdom
Czech Republic
Iceland
Slovenia
Germany
Netherlands (2011)
Hungary
Norway
Austria
Finland
Sweden
Italy
Belgium
France
Denmark
Behind the benchmark
10
15
20
25
30
35
40
45
50
5.02 Marginal tax rate for medium wage earners*, including indirect taxes, 2012
Direct marginal tax
Indirect taxes
Chile
Mexico
Switzerland
South Korea
Japan
New Zealand
Australia
United States
Israel
Canada
Poland
Ireland
United Kingdom
Turkey
Iceland
Slovak Republic
Estonia
Denmark
Spain
Portugal
Czech Republic
Sweden
Greece
Slovenia
Netherlands
Italy
Norway
Hungary
Finland
France
Germany
Austria
Belgium
OECD
Eurozone
Behind the benchmark
10
20
30
40
50
60
70
80
Per cent
73
5.03 Marginal tax rate for high wage earners*, including indirect taxes, 2012
Direct marginal tax
Indirect taxes
Chile
South Korea
Mexico
Japan
Switzerland
New Zealand
Canada
United States
Spain
Poland
Australia
Austria
Slovak Republic
Germany
Israel
Estonia
Turkey
United Kingdom
Czech Republic
Iceland
Netherlands
Hungary
Portugal
Norway
Ireland
Greece
Finland
Denmark
France
Slovenia
Italy
Sweden
Belgium
OECD
Eurozone
Behind the benchmark
10
20
30
40
50
60
70
80
Per cent
OECD
Ireland
Slovenia
Czech Republic
Poland
Chile
Iceland
Turkey
Hungary
Estonia
Switzerland
Sweden
Slovak Republic
United Kingdom
South Korea
Finland
Austria
Denmark
Israel
Netherlands
Greece
Canada
Italy
New Zealand
Norway
Germany
Australia
Mexico
Spain
Portugal
Belgium
France
Japan
United States
Russia
China
India
Brazil
Behind the benchmark
10
15
20
25
30
35
40
45
Per cent
74
EUROZONE
Belgium
Canada
Slovak Republic
Czech Republic
Estonia
France
Iceland
Switzerland
Greece
Hungary
Ireland
Slovenia
Finland
Poland
South Korea
Portugal
Austria
Sweden
Turkey
Denmark
Italy
Netherlands
Chile
Spain
United Kingdom
Germany
Israel
Mexico
Norway
Australia
Japan
United States
New Zealand
China
Russia
India
Brazil
Behind the benchmark
10
15
20
25
30
35
Per cent
China
Brazil
Russia
India
Behind the benchmark
-2
10
12
Per cent
75
OECD
Poland
Switzerland
Sweden
Germany
Norway
Israel
Belgium
United States
Denmark
Netherlands
United Kingdom
Canada
Turkey
Australia
Chile
Finland
Czech Republic
Ireland
France
New Zealand
Japan
Austria
South Korea
Slovak Republic
Estonia
Mexico
Portugal
Hungary
Italy
Spain
Greece
Slovenia
Iceland
Easy access to capital markets minimises the financial costs for businesses, contributes to increased
investment, and stimulates
economic growth. In the wake of
the financial crisis, access to capital
markets is still difficult in many
countries.
In their own assessment, senior
managers in Poland, Switzerland
and Sweden have easy access
compared with the other OECD
countries.
India
Brazil
China
Russia
Behind the benchmark
10
Index 0-10
EUROZONE
Poland
Hungary
Slovak Republic
Czech Republic
Portugal
Slovenia
Greece (2009)
United Kingdom
Spain
Italy
Ireland
Japan
United States
Austria
Netherlands (2011)
Finland
Germany
France
Denmark
Belgium
Sweden
Norway
50
100
150
200
250
300
350
400
DKK
76
OECD
Greece
Ireland
Spain
Japan
United States
Estonia
Switzerland
Slovak Republic
Czech Republic
Sweden
Slovenia
Denmark
Poland
France
Netherlands
Canada
Italy
Hungary
South Korea
Germany
Belgium
Australia
Austria
United Kingdom
Finland
Norway
Iceland
-3
-2
-1
Per cent
Spain
France
Slovak Republic
Iceland
Belgium
Germany
Czech Republic
Portugal
Austria
Sweden
Hungary
Poland
Ireland
United Kingdom
Norway (2010)
Greece
Italy
Estonia
Finland
Slovenia
Netherlands
Denmark
Eurozone
OECD
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
77
78
79
GLOBAL BENCHMARK REPORT 2014 NEW TRENDS IN GLOBAL INVE STMENT FLOWS
81
In 2012, for the first time ever, more than half of the worlds foreign direct investment (FDI) was channelled to countries outside OECD member states,
which, on the other hand, are still responsible for the majority of the investments. This development is apparent when looking at the balance between inward and outward FDI in the EU-15, where stocks of outward FDI increasingly exceed inward FDI. The situation is particularly problematic for countries experiencing a declining inflow since FDI can raise both employment and
productivity wherever it occurs. It is therefore important for all countries to be
able to attract FDI.
A large gap in FDI has evolved in the EU-15 countries
Many affluent countries have more outward foreign direct investment (FDI) than
inward. In other words, they have invested more abroad than other countries have
invested in them and this gap in FDI seems to be growing. In fact, the FDI gap of
the EU-15 has nearly tripled over the past decade and overall currently constitutes
about 15 per cent of GDP in these countries. Although many countries have experienced this development, the scope varies greatly as well as the underlying reasons
for the development of the investment gap.
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
82
GLOBAL BENCHMARK REPORT 2014 NEW TRENDS IN GLOBAL INVE STMENT FLOWS
OECD
The world excluding
the OECD
USD bn
2,500
Financial crisis
2,000
European
debt crisis
Dot-com bubble
1,500
1,000
Note Estonia and the Slovak Republic
are not included in flow to the OECE
before 1992.
The world's aggregate inward and
outward FDI flows should be the same but
are not due to measurement errors.
Source UNCTAD and DI
500
0
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010 2012
Similar to the EU-15, many OECD member states are experiencing a gap between
inbound and outbound FDI. The reason is a general and growing tendency to invest outside these countries. In 2006, 70 per cent of the worlds FDI flows went to
OECD member states while, in 2012, less than half landed there.
The main part of the worlds FDI, however, still comes from OECD member states
even though there has been a small decline in their share of the worlds outward
FDI flows from 80 per cent in 2006 to 70 per cent in 2012. This means that in 2012,
70 per cent of the worlds FDI came from OECD member states while only half of
global FDI was channelled to those countries. The result is that overall the gap has
increased.
Furthermore, the financial crisis in 2008 and the debt crisis in 2011 had a restraining effect on global FDI flows. The flows, however, were only below the 2006 level
in 2009; otherwise, they have been higher. The general increase in FDI has to do
with the general growth of the world economy and is similarly an expression of an
increasingly globalised world.
In comparing OECD member states, it appears that outward FDI primarily exceeds
inward FDI in the most affluent countries. The question is then whether such a FDI
gap is good or bad?
GLOBAL BENCHMARK REPORT 2014 NEW TRENDS IN GLOBAL INVE STMENT FLOWS
83
USD bn
2,500
OECD
The world excluding
the OECD
Financial crisis
2,000
European
debt crisis
1,500
Dot-com bubble
1,000
Note Estonia and the Slovak Republic
are not included in flow to the OECE
before 1992.
500
0
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Although investment gaps seem to have occurred primarily in the most affluent
OECD member states, the pattern of inward FDI is not the same across the states.
OECD member states differ significantly in their ability to attract direct investments
from abroad. This shows that although a larger share of global FDI is channelled
outside OECD member states, there is still great potential to attract more FDI within these countries.
Great differences in a
countrys ability to attract
FDI
It is not obvious whether a gap between the outward and inward FDI is a positive or
negative development for a given country. As an example a FDI gap that occurs due
to less inward FDI and increasing outward FDI could indicate that domestic businesses increasingly remain with domestic owners while they are acquiring foreign
companies and expanding their operations in export markets. At face value that
sounds positive, but is foreign ownership necessarily a bad thing, or could it even
be preferable?
On the other hand, the gap could signify that both domestic and foreign companies
have lost interest in the given country. In that case, a large and growing FDI gap is
undesirable.
In order to understand whether a FDI gap is good or bad, it is necessary to take a
closer look at the development of the investment balance, and at what FDI actually entails. Based on the development in many European countries, it appears that
there are both positive and negative aspects to a growing FDI gap.
GLOBAL BENCHMARK REPORT 2014 NEW TRENDS IN GLOBAL INVE STMENT FLOWS
84
-80
-60
-40
-20
20
40
60
80
100
Per cent of GDP
0
Source UNCTAD and DI
10
15
20
25
30
Per cent
GLOBAL BENCHMARK REPORT 2014 NEW TRENDS IN GLOBAL INVE STMENT FLOWS
85
Australia
Norway
Denmark
France
Frances stocks
of both inward and
outward FDI have
decreased in the
same period, and
since outward FDI
has decreased more,
the gap has become
smaller. An explanation could be that
France is generally
struggling with poor
competitiveness and
has had a tough time
in the financial crisis
and the successive
debt crisis.
Similar to Denmark,
outward FDI in
Norway exceeds
inward FDI, but in
Norway, the gap is
smaller today than
in 2006 because the
inward FDI stock has
increased more than
the outward FDI. The
increase in inbound
FDI is mainly found
in oil production and
real estate.
In Australia, the
stock of outward FDI
has declined from
2006 through 2012
while the stock of
inward FDI has
increased.
It is primarily the
major inflow of
FDI to the mining
industry that has
caused Australias
stock of inward FDI
to exceed outward
FDI.
GLOBAL BENCHMARK REPORT 2014 NEW TRENDS IN GLOBAL INVE STMENT FLOWS
86
Start-up of new companies will involve the creation of new jobs since it can be characterised as green field investment. This is a particularly interesting aspect of inward FDI.
The transfer of capital to subsidiaries may also involve green field investment in
cases where the capital is used to expand the activities of the subsidiaries. There
may be other motives, though. If, for instance, the companys investment goes to
improvements in production equipment, it does not immediately create a need for
more employment. On the other hand, it increases productivity. However, investment in a subsidiary may also be pure cash management with no real economic effect since it is simply a transfer of money that will be returned at a later stage.
Acquisitions have no obvious effect on employment. Since a major part of FDI covers whole or partial acquisitions of companies, no direct correlation between FDI
and employment can be expected.
GLOBAL BENCHMARK REPORT 2014 NEW TRENDS IN GLOBAL INVE STMENT FLOWS
87
Flow-through investment
has no effect on the
economy
This means that not all FDI has an effect on the economy, but over the years, the
FDI will presumably include all types.
3 Acquisition of company
4 Flow-through investments
American DuPont paid 5.8 billion dollars for the acquisition of Danish Danisco in 2011. The company was acquired
through a holding company in Luxembourg. Therefore, the
investment did not affect the economy of Luxembourg, even
though it was considered an American investment in Luxembourg and an investment from Luxembourg into Denmark.
billion euros
billion USD
billion USD
88
GLOBAL BENCHMARK REPORT 2014 NEW TRENDS IN GLOBAL INVE STMENT FLOWS
Danish owners
Foreign owners
Last, but not least, a general interest from foreign investors is important in terms
of being able to obtain capital for the companies of a country. Major interest will
make it easier and less expensive for companies to find financing. This will make
more investment attractive, and this again will increase the physical capital stocks
and raise productivity.
GLOBAL BENCHMARK REPORT 2014 NEW TRENDS IN GLOBAL INVE STMENT FLOWS
89
No
Yes, but without concrete
productivity targets
80
60
40
20
0
Foreign ownership
Danish owners
1.3%
Danish owned
19.8%
98.7%
Foreign owned
80.2%
Number of companies
Number of employees
GLOBAL BENCHMARK REPORT 2014 NEW TRENDS IN GLOBAL INVE STMENT FLOWS
90
Measured by the number of employees, one fifth of those employed in the private
sector in Denmark are working in a company with non-Danish owners. These do
not only count companies acquired by foreign investors, but also jobs that were created as a result of foreign companies green field investment.
Relocation may be necessary for companies
You could fear that companies that are being acquired will relocate to another
country. It seems at least plausible that foreign owners do not have the same sense
of belonging to the countries where they buy companies that the national owners
have. On the other hand, it is not a given fact that national owners have a choice in
deciding whether to keep the company in the original country. Irrespective of the
nationality of the owner, it is difficult for a company to survive if the product or service it offers can be produced more efficiently and cheaply abroad.
What keeps the companies at home in the long term are not the boundaries to the
outside world, but rather the conditions businesses operate under. National borders simply have diminishing significance for many companies. The increasing investment flows across national borders are evidence of that.
New markets abroad and high labour costs in Denmark are main motives for establishing jobs abroad
Indicate how you weighted the motives for the decision to establish jobs abroad and not in Denmark
Very important
Important
Less important
Not important
Don't know
Taxes
Not sucient access to qualied labour in Denmark
20
40
60
80
100
GLOBAL BENCHMARK REPORT 2014 NEW TRENDS IN GLOBAL INVE STMENT FLOWS
91
in relation to the second most quoted motive for establishing jobs abroad, which
was reduction of labour costs.
In Denmark, as in several other affluent countries, we are not interested in competing directly with low-wage countries on wages. In order to avoid that, work carried out in Denmark must have a high level of knowledge in order to give it a higher
value, and production must be smarter or more automated. Many other European
countries also meet these criteria; so irrespective of how innovative Danish companies are, costs are still very important.
Costs are a common cause of outsourcing in many other European countries, particularly the most affluent among them.
Denmark
Netherlands
Norway
Portugal
Sweden
Belgium
Estonia
Slovak Republic
France
Romania
Lithuania
0
6 Per cent
Source Eurostat
92
GLOBAL BENCHMARK REPORT 2014 NEW TRENDS IN GLOBAL INVE STMENT FLOWS
Finland
Denmark
Sweden
Ireland
Norway
Belgium
Netherlands
Slovak Republic
France
Latvia
Portugal
Estonia
Source Eurostat, International sourcing
Romania
statistics survey 2012
Lower wage costs
Lower costs
(excluding wage costs)
10
20
30
40
50
60 Per cent
As mentioned earlier, there is major difference as to how much FDI the various
countries attract. It is, however, equally interesting whether the individual countries, irrespective of level, have been able to increase their attraction of FDI or
whether they have experienced a distinct fall in recent years.
This picture is also rather mixed, but in general, most countries have increased
their attraction of new FDI in the period 2007-2012 compared with the period
2001-2006. This has to do with the fact that the flow of FDI to OECD member
states has generally increased in the period despite constituting a smaller proportion of the worlds total FDI.
However, many countries have also experienced a major decline in inward FDI,
which is a development that those countries should aim to reverse since it means
that they miss out on investment that can increase productivity and create jobs.
GLOBAL BENCHMARK REPORT 2014 NEW TRENDS IN GLOBAL INVE STMENT FLOWS
93
In low wage countries, quality, knowledge and qualifications motivate companies to outsource
Proportion that states quality, knowledge and qualification as motivation factor for outsourcing
Romania
Estonia
Latvia
Portugal
Slovak Republic
Ireland
Finland
Norway
Belgium
Sweden
Netherlands
France
Denmark
0
10
15
20
30 Per cent
25
Ireland
Norway
Chile
Australia
Japan
Turkey
Belgium
Canada
Israel
Austria
USA
Iceland
Switzerland
Poland
Hungary
Spain
United Kingdom
Sweden
Mexico
New Zealand
Greece
Germany
Portugal
Netherlands
Luxembourg
Italy
Estonia
Slovenia
Czech Republic
France
Finland
South Korea
Denmark
Slovak Republic
-100
-50
50
100
150
200
250
300
350
94
GLOBAL BENCHMARK REPORT 2014 NEW TRENDS IN GLOBAL INVE STMENT FLOWS
The increasing global flow of foreign direct investment makes it important to understand the factors that determine whether national and international companies
expand abroad or at home. The easy answer is that businesses locate wherever it is
most profitable, and this is determined by the return on investment (ROI) and the
security for achieving the desired ROI.
because high costs re- For countries such as Denmark, which attract less FDI than their neighbours and
duce the yield other comparable countries, as a minimum, investments should return the same
yield as in the other countries. Declining or relatively low inward FDI is not simply a
natural development that must be accepted.
The fact that this is not the case is because other factors limit investment in Denmark. Locating in Denmark does not provide access to a large market. This factor
is difficult to change. On the other hand, we can do something about the high level
of costs, which many businesses point to as an important motive for choosing to
invest abroad rather than in Denmark.
We are not talking about Denmark lowering the level of cost to that of Eastern Europe or Asia. The high level of knowledge in the products that are made in Denmark
vouch for that. It is rather about competing with the cost levels in the countries
around us.
Many other factors could be adjusted in order to make Denmark or any other country an attractive investment destination. This would make long-term investment
far more attractive along with an increased focus on ensuring sufficient labour with
the right qualifications, a good infrastructure and improved conditions for research
and development.
GLOBAL BENCHMARK REPORT 2014 NEW TRENDS IN GLOBAL INVE STMENT FLOWS
95
In addition, an investment always involves a certain degree of risk, and the greater
the risk, the larger the ROI required. For this reason, we must also consider how
the risk can be minimised. One way for governments to contribute is by being forthcoming and action-oriented towards foreign investors. If, from the outset, the companies experience fast and efficient service from the public authorities, it will be a
clear indication that they do not risk their investment and subsequent operation
being negatively affected by unpredictable costs due to slow case processing or
other administrative burdens. Fewer administrative burdens, per se, will reduce the
costs of the companies.
DI RECOMMENDS
In general, these recommendations deal with the following categories: administrative burdens, interaction with government investment, and direct financial incentives. The recommendations touch upon areas that any country should aim to improve if it wants to attract and retain more investment.
Financial incentives
>> Competitive corporate tax
>> Ensuring competitiveness of several other taxes that affect
businesses, which compete on the international markets
>> Improved wage competitiveness
Portugal
Denmark
Belgium
The Netherlands
Switzerland
France
Germany
Spain
Italy
USA
Eastern
Europe
India
China
India
part 2
China
part 2
Great Britain
Japan
97
In the past decade, Africa has developed from being an extremely impoverished
continent with gloomy prospects for the future to accommodating some of the
worlds fastest growing economies. The progress is thanks to high growth rates
caused by a strong increase in inward foreign direct investment, major
demand for African raw materials and a remarkable development of the
African consumer markets. Business conditions in Africa have also improved.
The EU is still Africa's largest donor and trading partner. However, the EU is
getting less relevant to the continent due to other countries' interest in trading
with and investing in the African countries. With changes in trade agreements
and aid policy underway, 2014 holds ample opportunity for revitalizing the
cooperation between the two regions.
Imagine Africa as the worlds factory floor. The first place that any CEO would consider to have any kind of product manufactured at a reasonable price and quality.
The question is only whether to locate the production in Uganda, Ethiopia or Mali.
Imagine Africa as the worlds food producer. A producer of tonnes of meat, vegetables, fruit, cereals and dairy products that are shipped both as processed and
unprocessed goods to consumers across the world.
Or imagine Africa as one of the worlds most interesting consumer markets. New
trends are created and born here, and any international brand worth its salt has a
massive presence.
These three scenarios may all sound utopian. The reality, however, is that now, in
2014, Africa is in the midst of a development process that may very well lead to all
three situations coming true by 2040.
may be found in
Africa in 2040
The continent has already made so much progress that what is reality today that
half of the African countries are middle income states and that there are more
than 650 million mobile telephone subscribers in Africa would have sounded like
science fiction for a citizen of the world in the year 2000.
98
At that time, Africa was named The hopeless continent by the Economist.
In the early 1990s, a few African countries had experienced years of decent growth
rates, but around the turn of the millennium, growth rates had fallen to 1-3 per
cent, and with major population growth the countries were in reality in economic
recession. In the 1990s, several new leaders had given the impression that they
were more concerned with fighting poverty than lining their own pockets, but by
2000 several of them had thrown their countries into war. On top of this, a number of states suffered natural disasters such as floods, drought and, subsequently,
failed harvests and floods of refugees. In addition, diseases such as aids threatened
to make major inroads into the new generations.
The future of Africa was far
from bright in 2000
In conclusion, prospects for Africa were far from promising in 2000. In spite of this,
something surprising happened in the first decade of this century. Most African
countries have arrived at a positive course that has turned out to be self-reinforcing. Many years have displayed stable, high growth rates driven by external and internal demand and increasing direct investment from the rest of the world. There
have been fewer wars and more good leaders. Less disease and more education.
Most of all, however, optimism and growing self-confidence bring even more fuel to
Africas wish of creating a better life for coming generations.
In brief, Africa is open for business.
99
Africa had the world's third highest growth rates in the 2000s
Average annual GDP growth, 2000-2012
Asia
Middle East
Africa
Sub-Saharan Africa
* G7 are Canada, France, Germany,
Italy, Japan, UK and USA.
Central and
Eastern Europe
G7*
7 Per cent
Growth will speed up even more in the next five years when Africa led by the
sub-Saharan states is expected to be world champion in growth. According to
forecasts by the International Monetary Fund, Africa will have an average annual
growth rate of more than five per cent in the years up to 2018. And this even in a
period when the majority of advanced economies are licking their wounds after the
financial crisis.
Africa will be world champion in economic growth in the next five years
Expected average annual GDP growth, 2013-2018
Sub-Saharan Africa
Africa
Asia
Middle East
Central and
Eastern Europe
G7*
6 Per cent
100
In 2012, a quarter of the African countries recorded growth rates of seven per cent
or higher. Several of them were even among the countries in the world with the
highest growth rates. These include Sierra Leone, Niger, Ivory Coast, Liberia, Ethiopia, Burkina Faso and Rwanda. It should be considered, however, that most of
them come from a very low level. If they can maintain high growth rates, many African states will quickly ascend the worlds GDP charts.
1980
346,000
1995
485,000
AND THE
DEVELOPMENT
IS EXPECTED TO
CONTINUE
2018
1,400,000
2010
920,000
101
Even today, exports of raw materials and natural resources are important elements
in the African growth adventure, but they are now accompanied by increasing inward FDI and increasing demand by the African countries own markets. Altogether, it means that a series of self-reinforcing trends have started accumulating, and
this may forge high and stable growth rates in many African countries for several
years ahead.
While local consumers would previously only really be relevant for local shopkeepers, the markets now reflect a larger degree of variety. The middle and upper income segments are growing fast; and a third of the African populations are currently considered middle class. At the same time, the lower income segments are
dwindling.
Per cent
100
> $ 20,000
$ 10,000 $ 20,000
$ 5,000 $ 10,000
$ 2,000 $ 5,000
< $ 2,000
80
60
40
20
0
2000
2008
2020
102
The increasing incomes in Africa are generating demand for a long list of products
and services. Consumers increasingly demand quality and branded goods. At the
same time, prices are important since low prices may signal low quality and on the
other hand it is limited how much the lower income segments can pay.
Some countries have particularly interesting consumer markets. Nigeria and South
Africa are large countries and in the forefront in all segments with annual income of
more than USD 2,000. Countries such as Kenya, Sudan and Angola also have major groups in the upper income segments.
70 African cities with a
population of over one
million
In many places, however, the purchasing power of ordinary citizens is still so low
that the market for classic Danish quality products is limited. Developments are
fast, though, and a significant proportion of the middle class is concentrated around
Africas financial centres including Lagos, Nairobi and Johannesburg. Seventy African cities currently have a population of over a million, and in Lagos, for example,
the population is nearly three times that of the whole of Denmark.
At the same time, Africa is one of the continents in which most people are migrating
to the cities. About 40 per cent of the continents population live in urban areas;
and this percentage is expected to increase rapidly over the coming years.
In 2008-2011, African cities grew on average by 3.5 per cent annually, and in some
countries, the tendency is even stronger. Led by Lagos, Nigeria, which is the worlds
seventh fastest growing city, urbanisation will be one of the strong trends that will
fuel the development of the African consumer markets over the coming years.
Urbanisation supports the
development of consumer
markets
Urbanisation strengthens the African consumer markets for several reasons. One
reason is that a major part of the middle class and the higher income segments will
be moving to the cities an urban dwellers consumption is often twice as high as
that of a farmer and the average income in the cities is 80 per cent higher than
the national average.
Urbanisation is also important for the development of the African consumer markets because it is easier to reach the consumers in cities. The majority of Africans
used to be spread over a large continent with poor infrastructure that made the
development of a distribution network very difficult. But distribution channels in
the cities are developing fast, and several large supermarket chains are expanding
significantly. In Nigeria alone, the number of international shops opening on the
market is increasing by 36 per cent annually.
103
84 per cent of the African consumers expect to be far better or somewhat better off in two years
In two years I expect my family to be
10
20
30
40
50
60 Per cent
Another interesting trend is the high degree of optimism among Africans. African
consumers are generally highly optimistic regarding the future. As many as 84 per
cent expect to be far, or somewhat, better off two years from now than today. Most
optimistic are the Ghanaians with 97 per cent expecting their family to be far, or
somewhat, better off in two years than now. The same tendency applies to many of
the other Sub-Saharan countries while North African countries are less optimistic.
This is not surprising in the light of the political unrest of recent years in the North
African region.
Optimistic consumers
The high degree of optimism is undoubtedly a consequence of many of the other predominating trends in Africa today: higher household incomes, high growth
rates, and a young population with a median age of just 18.
Ghana
Nigeria
Senegal
Angola
Ethiopia
South Africa
Kenya
Algeria
Egypt
Morocco
20
40
60
80
104
PERCENTAGE OF
WORLDS PRODUCTION
ESTIMATED ANNUAL
EXPORT REVENUES
Nigeria
Angola
Oil Exports
US$ 100 BN
annual
US$ 70 BN
annual
US$BN,
constant
2011 dollars
Per cent
2011 GDP
30.7%
9%
US$
1.6 BN
Gold
Ghana, Tanzania,
Mali, Guinea and
Burkina Faso
Iron ore
Guinea
147.8%
US$
1.7 BN
8%
Bauxite
Guinea
15.0%
53%
US$
3.5 BN
21%
Cobalt
Industrial diamonds
Democratic Rebublic of Congo
16%
Uranium
Namibia and Niger
27.3%
22%
US$
3.5 BN
Diamonds
Botswana
77%
46%
21%
Platinum
Chromite
South Africa
Manganese
* Estimates are intended to show order of magnitude. Revenue projections are highly sensitive
to assumptions about prices, phasing of production, and underlying production and capital costs
** Data represents annual revenue at peak production
Sources Africa Progress Panel Report 2013
105
EU
4
3
Southeast Asia
2
1
0
Africa
Sub-Saharan Africa
1962
1967
1972
1977
1982
1987
1992
1997
2002
2007
2012
106
Apart from raw materials, the telecommunication and financial sectors are the
most attractive targets for non-African investors. There is also some interest in the
retail sector due to the advance of the African consumer markets.
China has been a particularly remarkable investor in Africa in recent years. Contrary to general perception, the majority of Chinese investment is not directed at the
raw materials sector, but at the service sector. In addition, the Chinese have invested in agriculture and industry; and this trend will presumably be intensified with
the development of industrial estates aimed at attracting production companies, in
countries such as Nigeria, Ghana, Kenya and South Africa.
It is difficult to calculate the total Chinese investment in Africa since not all FDI is
officially registered. The figure on the next page, however, presents an estimate of
the official and unofficial parts of Chinese FDI in Africa.
In recent years, China has channelled a lot of FDI to particularly Zimbabwe, Ghana
and Ethiopia.
Trade between China and the African countries has also increased in recent years.
China bought more than 10 per cent of Africas total exports in 2011, and this is
15 times as much as in 2001. In 2012, the overall trade between China and the African countries amounted to USD 198 billion, an increase of 20 per cent from the
previous year.
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
107
Number of projects
300
50
250
40
200
30
150
20
100
10
50
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Chinese FDI in Africa often generates negative news in the western world. Stories speak of the overexploitation of African raw materials without sufficient
compensation to the local populations, the use of Chinese labour rather than
local labour, and a lack of respect for the environment and people in general.
If, however, you ask the individual Kenyan or Zambian of their perception of the
Chinese, you would rarely get such a one-dimensional picture. First, the Chinese have built a visible infrastructure that has significantly improved the lives
of many Africans and created a basis for further development. The western
donors have rather focused on other forms of aid such as budgetary support,
anti-corruption and the development of a state structure. While the donors believe these types of development aid are more effective, they are less visible for
the individual African citizen.
Secondly, the Chinese intention to trade with the African countries is highly
appreciated. Many Africans feel that this approach is more dignified than the
donor-recipient relations that exist with the western world. The aid from western countries may be presented as donations, but there are also conditions
and conditions attached.
An important point is that the African states increasingly demand trade and
investment and, to a lesser extent, donations. This means that the western
donors, including the EU, should not be afraid of integrating trade and aid on
the contrary. Naturally, European involvement should be based on European
values with focus on cooperation and social and environmental sustainability.
Number of projects
Official total value
Unofficial total value
Source AidData
108
Ghana
Nigeria
50
Angola
40
Egypt
30
Morocco
Congo, Dem
South Africa
Algeria
20
Cte d'Ivoire
10
Kenya
0
Sudan
EU-28 average
-10
0
20
40
60
80
100
Business Climate (index 1-100)
Note The size of the circle indicates the total size of the economy (GDP/PPP), 2012
Source World Bank, IMF and DI calculations
109
Population
Size of population 2013, UN
Level of income
GDP per capita, 2013, IMF
Industrialisation
Value increment in production sector/GDP 2011,
World Bank
Internationalisation
Trade/GDP 2011, World Bank
Business Climate
World Banks Doing Business Index 2014
174
million
93,000
Nigeria
Seychelles
USD
22,344
USD
215
Equatorial Guinea
Malawi
43.8%
2.4%
Swaziland
Sierra Leone
154.6%
35.6%
Lesotho
Central African
Republic
No.
20
No.
189
Mauritius
Chad
110
Africa has fought corruption, but is still the worlds most corrupt region
Change of average CPI score 2006-2013
CPI score 2013
Africa
32.7
Latin America
37.2
Central and
Eastern Europe
49.7
Asia
38.6
Middle East
40.9
OECD
68.6
-3
-2
-1
Despite continued high levels of corruption across the continent, the development
reflects an actual intention of several African governments to fight corruption, with
selected countries as the frontrunners.
In addition to enhancements of the business climate and the level of corruption,
the African infrastructure has also improved although developments started at a
very low level. There have also been fewer conflicts. The 1960s saw 21 successful
coups dtat in Africa. In comparison, there have only been five successful coups
since 2000. Political stability has also improved with far more peaceful elections
across the continent.
111
The many positive changes in Africa have also led to a distinct development
of the African business community. Previously, only few African companies
were visible outside their domestic market or in a position to measure up to the
global elite of large corporations. This has changed with a number of African
companies reaching a substantial size and experiencing constant high growth
rates. Most large African companies still have their roots in South Africa, but
companies of other nationalities are breathing down their necks. Many of the
com-panies are primarily working in the natural resource sector, but in keeping
with developments, more sectors are being represented.
72.0
A.P. Moller-Maersk
Transport and energy
60.2
Sonangol
Oil
33.3
Sasol
Energy and chemicals
17.5
MTN Group
Telecommunication
15.0
14.6
Eskom
Electricity
14.1
Shoprite Holdings
Trade
8.9
Vodacom Group
Telecommunication
8.2
Imperial Holdings
Industry
8.0
7.4
0
10
20
30
40
50
60
70
80
112
Africa
1,200
India
China
900
600
Europe
300
Source UN - World Population Prospects
1955
1965
1975
1985
1995
2005
2015
2025
2035
2045
This development offers a unique opportunity for economic and social development if the African countries succeed in creating a sufficient number of new jobs.
You could say that Africa has the last, major labour resource in the world, which
means that Africa has a unique potential as a major unexploited labour production
location. If this opportunity is to be brought to fruition, and Africa is to become a
real alternative to other production destinations, a further improvement is required
in business climates, infrastructure, the level of education, and access to crossborder trading.
Many of the trends that create opportunities for the African countries also have
a downside. The large young population could turn out to be a ticking time bomb
under the stability in countries unable to generate a sufficient number of new jobs.
With many young people migrating to the cities hoping to find a job, the infrastructure is under heavy pressure while this migration may also cause increasing problems of slums with poor living conditions and social tensions.
At the same time, the authoritarian, repressive, undemocratic and generally ineffective governments of many countries may halt the positive development. Unrest
in one land can rapidly infect the neighbouring countries making it vital that all
countries join the progress.
Inflation and exchange rate fluctuations are also risks affecting the African countries. Although inflation following the increasing oil and food prices in 2008 has decreased, it is still at a high level around 7 per cent. Earlier this year, Morgan Stanley
included South Africa in the Fragile Five group along with Turkey, Brazil, India
and Indonesia due to the risk connected to the exchange rate.
113
200
400
600
800
1,000
EU exports to Africa from the 28 member states have more than doubled in the period 2000 2012. Again, some member states are clearly in the lead some building on top of already large exports to Africa such as Portugal and the Netherlands,
others starting from a lower level such as Poland.
114
Austria
600
Belgium
Denmark
Spain
France
Netherlands
Poland
Portugal
EU15
500
400
300
200
100
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Looking at imports of African goods to Europe, the picture is much the same. Total
imports have more than doubled in the period, but import growth for the individual
member states is highly diversified. The Netherlands and Portugal have increased
their imports from Africa by a factor three to four during the period, as have Denmark and Sweden, whereas Hungarys imports from Africa have actually decreased
in the same period.
Austria
Sweden
Belgium
Belgium
Denmark
Denmark
Spain
France
France
United Kingdom
Netherlands
Hungary
Poland
Poland
Portugal
Portugal
EU15
EU27
600
500
400
300
200
100
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
115
Sida, the Swedish aid agency, is currently working with a vision of making the private sector as close a partner to Swedish development aid as governments and
civil society. Based on this objective, Sida has already developed a number of innovations in development aid. One example of how the vision has been transformed into reality is a project with the Swedish bus and truck manufacturer Volvo. The two partners have established a programme to train car mechanics in
Ethiopia, a country with large gaps in the supply of skilled labour. Sida also supports the development and test of new products and services for the poor, private
sector contributions to peace building, and a number of other interventions. With
plans to integrate private sector aid into all its strategies, Sida will continue to develop new ideas for cooperation with business over the coming years.
Several other European countries have taken concrete steps and launched new
strategies in 2013 for working closer with the business world:
> UK Secretary of State for International Development Justine Greening announced three priorities for development: 1) Lowering barriers to trade and
investment, 2) promoting entrepreneurs and businesspeople in developing
countries, and 3) greater investment by UK businesses.
> In a new policy by the Netherlands, A World to Gain, three types of relationships will be pursued: aid relationships guided by altruism for fragile and
post-conflict states, trade relationships with other wealthy countries, and
transition relationships, which link aid with commercial policies and are
guided by enlightened self-interest.
> The German government has an announced commitment to strengthening
the linkage between foreign trade and development cooperation, and it is a
priority for German businesses to play a stronger role in official development
cooperation.
Economic Partnership
Agreements to promote
trade and support
development
116
The European Commission has set a deadline of October 1, 2014 for regions to
conclude, sign, and start implementing the agreements. If the deadline is not met,
African countries that are no longer eligible for GSP will lose some or all of their
preferential access to the European market. Furthermore, the prospects of losing
this access with serious consequences for exports and growth may prompt some
countries to split from their regional grouping and instead negotiate individual
trade deals with the EU.
Therefore, there is a strong interest from all sides in ensuring that the EPAs are finalised before the deadline. However, it is still uncertain whether it will be possible
to identify acceptable compromises with all regions before October 2014.
EU aid to Africa
Between 2007 and 2012, the EU donated more than EUR 24 billion to Africa in official development assistance. In light of the great advances made by many African
countries in recent years, and the African countries increased interest in trade and
investments, the role of development aid is diminishing although, an amount of this
scale is still significant, especially to some countries. Furthermore, while African
leaders have put industrialisation high on their agendas over the past few years, the
EU has largely maintained a focus on aid for social sectors.
EU aid to focus more on
supporting inclusive and
sustainable growth than
before
In an effort to adjust to the changing circumstances, the EU developed the aid reform strategy Agenda for Change in 2011. Alongside a focus on human rights, democracy and governance, the Agenda for Change prioritises inclusive and sustainable growth for human development, including job creation driven by the private
sector.
Following this, the EU is trying to work closer with business and other private sector partners. For many years, business was not considered a relevant partner in development. Rather, this was a field for public donors and civil society organisations
only. Similarly, the issue of job creation was not considered as important as support
to social sectors such as health and education.
However, the rise of several countries from developing country status to developed
or emerging economies has proven that job creation driven by the private sector
is inseparable from longterm development objectives. Without it, improving the
health and education level of a country is unsustainable in the long run. Therefore,
the role of job creation and the private sector as a partner in development have
been added to the agenda of almost all important international development meetings and fora over the past few years.
In September 2000 world leaders came together at United Nations Headquarters in New York to adopt the United Nations Millennium Declaration. They
each committed their nations to a new global partnership to reduce extreme
poverty by setting out a series of time-bound targets with a deadline of 2015
that have become known as the Millennium Development Goals.
1
2
3
4
5
6
7
8
However, the reality is that not all MDGs will be reached before 2015. Also, the
achievement of the MDGs has been uneven among and within countries. Africa
is one of the continents that lags behind. In fact, Africa as a whole is off-track
on five out of the eight MDGs.
While the deadline of 2015 draws closer, the world is debating what should
come after the MDGs. The MDGs have been widely praised for their ability to
make the world come together and collaborate on achieving these eight goals.
However, the drawback of this is that focus has been pulled away from other
important issues, which are not prominent among the eight goals.
One example is the issue of job creation. Even though it is an important part of
fighting extreme poverty (MDG1), it has not received sufficient attention from
donors. While some countries whose leaders have had a strong focus on job
creation are well on track to reaching the goal (e.g. several countries in Asia),
the unemployment rate remains much the same or has increased in many
African countries.
This is one of the reasons why the High-level Panel on the Post-2015 Development Agenda has included the following as one of five transformative shifts
that the post-2015 development agenda should build on:
The EU is currently working on a new Communication, which will set the framework
for strengthening the role of the private sector in achieving inclusive and sustainable growth in developing countries in relation to EU development aid over the coming years. It is important that this Communication is adjusted to the current state
of the world and flexible enough to be workable for several years to come. Furthermore, the EU should look to some of the member countries for inspiration on how
to work with the business sector.
117
118
DI RECOMMENDS
African countries need growth, income, infrastructure, goods, and services. European companies can offer all this. If development aid is structured in a way so that it
leverages business activities in the best possible way, positive development effects
would be enormous.
With that in mind, DI recommends the following:
DI and Africa
DI has been actively involved in Africa on behalf of, and in cooperation with Danish businesses since the early 1990s. At that time, DI entered into dialogue with
the Danish development aid agency, Danida, to discuss how the Danish business
community could be involved in developing the business sectors of Danidas partner countries. This marked the beginning of a long and constructive dialogue on
the development of private sector programmes and various financing instruments,
which are now an integrated part of Danish aid policy.
DI has also been active in the global dialogue on business and development on
its own and as a member of organizations such as the European Business Council
on Africa and the Mediterranean (EBCAM), BUSINESSEUROPE and Business and
Industry Advisory Committee to the OECD (BIAC). Currently, DI's focus is on contributing to the dialogue on the post-2015 development agenda and the issue of
development effectiveness.
Furthermore, since 1996, DI has provided consulting to more than 250 Danish
companies on how to develop their businesses in numerous African countries. The
generated expertise includes everything from discussion on initial considerations,
across strategy development, to the implementation of new and innovative business concepts. This knowledge makes DI one of the organisations in Denmark
with the most extensive experience in business development directed at the base
of the income pyramid. For many years, DI has also been initiator and coorganiser
of delegations to selected African countries.
Finally, since 1996, DI has been a close partner to more than 20 African business
organisations. Through capacity building, DI has contributed to making the African business organisations professional voices for the business sector in their
countries. DI has helped gather sister organisations in regional networks to promote cooperation aimed at improving business conditions across national borders.
119
121
123
METHODOLOGY, DEFINITIONS
AND SOURCES
In this report we have benchmarked the global performance and general business
conditions of 33 OECD member states in terms of their utilisation of the opportunities offered by globalisation. All the members of the OECD except for Luxembourg
are benchmarked.
Benchmarking
33 OECD countries
87 benchmarks across
five pillars
For each of the 87 benchmarks, the countries have been ranked according to how
well they perform in international competition and whether they have the proper
conditions and prerequisites to exploit the opportunities offered by globalisation.
Data for the BRIC countries (Brazil, Russia, India, and China) is included whenever
available. With their high growth and increasing purchasing power, these countries
have growing significance in global competition, and it is interesting to compare
them with the OECD countries. They are not, however, included in rankings and
overall results.
Calculations of average
Most charts show an OECD average and an average for eurozone countries. The average is only calculated on the basis of countries for which data is available. Data is
weighted for GDP at PPP using the following formula:
G = Average
i = 1,,I. Number of OECD member states for which data exists
gdpi = GDP for country i
Vi = Data value for country i
For a few benchmarks, for which data exists for less than two thirds of the OECD
member states, an overall OECD average is not calculated. Similarly, there is no
average for the eurozone in the few cases where data is unavailable for the largest
euro-countries.
124
Within each of the five pillars of benchmarks, we have calculated the average rank
of each country. Since data does not exist for all countries, this calculation requires
several steps. First we calculate an average rank for each country based on the
benchmarks that include data for the country in question. This average is used to
create a relative ranking for the country in benchmarks for which there is no data
for the country. Then we rank again and calculate an average ranking in the whole
section.
In the few cases where a benchmark includes data for less than two thirds of the
OECD countries, this benchmark will not be used in the calculation of the average
for the pillar.
When two (or more) countries obtain the same ranking, they are shown with the
same ranking corresponding to the highest possible ranking.
Overall average
The summary on page 12 includes an overall average of the countries ranks in the
five pillars called The Global Benchmark Reports Competitiveness Index 2014. It
is calculated as a simple average of the countries ranks in each of the five pillars.
The purpose is to present an overall ranking of the OECD countries and not just
their ranks in the individual pillars and benc
Last year, the structure of the report was revised such that it is aligned with five fundamental pillars of competitiveness. Together these five pillars constitute the foundation for creating open and prosperous nations capable of creating and sustaining
growth and balance. Thus, the comparison is based on 87 benchmarks divided into
Level of Globalisation, Productivity and Innovation, Qualified Labour, Public Economy and Costs. Furthermore, it should be noted that the two benchmarks GDP
growth and GDP per capita in the summary only contribute to the greater picture of
globalisation and are not part of the global competitiveness index ranks.
The benchmarks have been selected with a view to providing as good a picture as
possible of the countries competitiveness and general business conditions. Data
has been drawn from internationally recognised sources and is internationally comparable. The sources of each benchmark can be found in the figures and in the list
of tables at the end of the report. See a list and a description of sources on the following pages.
In cases where historical data is not available for each country, the last known value
is used. Not all 33 OECD countries have been members of the OECD for the whole
period. Israel, Chile, Estonia and Slovenia joined in 2010. There countries are nevertheless included in the period.
Benchmark 2.26 (Quality of electrical supply) is new in the Global Benchmark Report 2014.
125
Because new data was not available during the preparation of the Global Benchmark Report 2014, 2.12 (Growth expectations among entrepreneurs) and 2.13
(Entrepreneurial activity) are identical with the benchmarks of last year.
Metadata for each individual benchmark has been prepared. It explains what the
benchmark shows, why it is of relevance to a country's international competitiveness and provides a thorough description of the source. Metadata is available in
the PDF version of the Global Benchmark Report 2014, which can be downloaded
from di.dk/gbr.
Further information
126
127
DESCRIPTION OF SOURCES
The African Report is a magazine with focus on African economy and politics.
www.theafricanreport.com
Africa Progress Panel is a panel consisting of ten high level members with great
insight in the African region. They are working towards a more sustainable and
equitable development in Africa and publish an annual report with different topics.
www.africaprogresspanel.org
AidData is a research and innovation collaboration providing easy accessible information on development financing.
www.aiddata.org
BLS (Bureau of Labour Statistics) is the US governments premier research institute focusing on labour market and economics.
www.bls.gov
Carlsberg Group is a Danish multinational brewery and the fourth largest brewery in the world.
www.bls.gov
www.cato.org
intstat.da.dk
The Conference Board is a global, independent business organisation. It publishes financial reports and analyses business trends.
www.conference-board.org
Danida is Denmarks official development agency and part of the Danish Ministry
of Foreign Affairs.
www.um.dk/da/danida
The Danish Ministry of Business and Growth seeks to improve the conditions
for growth in Denmark. The Ministry conducts economic analyses and suggests
policy initiatives in areas imperative to economic growth. The Ministry publishes
an annual account of Danish competitiveness called Denmark in the global economy.
www.evm.dk
The Danish Ministry of Taxation consists of the Department and the Danish Tax
Authority (SKAT). The Department works as staff function for the entire organisation and holds the main leadership. SKAT collects income, business and corporate
taxes.
www.skm.dk
128
The Danish Patent and Trademark Office issues patent and design rights, and
registers trademarks and utility models.
www.ip-center.dkpto.dk
www.dell.com
DI's company panel consists of 2,100 member companies. Four times per year,
panel members respond to questionnaires on the companys financial state, employee situation and growth opportunities supplemented by various theme questions.
www.di.dk
The Economist is a weekly magazine with focus on economics, politics and financial matters.
www.economist.com
www.energiforskning.dk
The European Commission is the executive body of the European Union. Among
other publications, the Commission publishes Taxation Trends in the EU.
www.ec.europa.eu
The European Patent Office is the executive arm of the European Patent Organisation.
www.epo.org
Eurostat is the statistical body of the European Commission, producing data for
the European Union.
www.epp.eurostat.ec.europa.eu
EVCA (European Private Equity and Venture Capital Association) is an association of European equity funds.
www.evca.eu
GEM (Global Entrepreneurship Monitor) is a non-profit academic research consortium focusing on international research on entrepreneurship.
www.gemconsortium.org
www.iea.org
IFU (Investment Fund for Developing Countries) is providing consulting and venture capital for Danish companies wishing to start up business and partnerships
in developing countries.
www.ifu.dk
IMD, the International Institute for Management Development, located in Lausanne, Switzerland, is one of the worlds leading management schools. It is the
publisher of the World Competitiveness Yearbook.
www.imd.ch
www.imf.org
www.proinno-europe.eu
129
www.kpmg.com/Global
McKinsey Global Institute is the economic and business research unit of the
American management and consulting company McKinsey & Company.
www.mckinsey.com
www.maersk.com
www.morganstanley.com
www.nationalbanken.dk
www.oecd.org
OECD.stat is the statistics bank of the OECD. It has data from member states as
well as non-member states.
www.stats.oecd.org
www.pwc.com
Produktion360 is an internet portal about management, organisation and technological challenges in production, food and life science companies. The IT company Columbus is behind the initiative.
www.p360.dk
www.siemens.com
www.dst.dk
www.transparency.org
www.unctad.org
WDI (World Development Indicators) is the World Banks bank of statistics and
consists of data for development countries.
www.data.worldbank.org
WEF (World Economic Forum) is an independent international organisation committed to improving the situation in the world by engaging leaders in partnerships
to shape global, regional, and industrial agendas. WEF publishes the annual Global Competitiveness Report.
www.weforum.org
The World Banks Doing Business report provides a status of the conditions for
operating a business in 189 countries.
www.doingbusiness.org
World Bank is an international bank working for reconstruction and development. The objective is to fight poverty by financing states.
www.worldbank.org
131
SUMMARY OF BENCHMARKS
Benchmark
No. 1
No. 2
No. 3
Page
1.00
Level of globalisation
Ireland
Chile
Switzerland
1.01
Estonia
South Korea
Slovak Republic
22
1.02
Ireland
Slovak Republic
Hungary
22
1.03
Poland
Israel
Slovak Republic
23
1.04
Switzerland
Japan
Ireland
23
1.05
South Korea
Japan
Australia
24
1.06
Belgium
Ireland
Switzerland
24
1.07
Belgium
Switzerland
Ireland
25
Belgium
Ireland
Chile
25
Belgium
Switzerland
Ireland
26
Mexico
Slovenia
Chile
26
1.11
Ireland
United Kingdom
New Zealand
27
1.12
Sweden
Ireland
Finland
27
1.13
Ireland
Sweden
Israel
28
1.14
Ireland
Sweden
Israel
28
Switzerland
Chile
Sweden
Poland
29
Germany
Sweden
29
132
Benchmark
No. 1
No. 2
No. 3
Switzerland
Sweden
Netherlands
Australia
Estonia
South Korea
32
2.02
Poland
South Korea
Estonia
32
2.03
Norway
United States
Belgium
33
2.04
Poland
Ireland
South Korea
33
2.05
Israel
South Korea
Finland
34
2.06
Iceland
Austria
South Korea
34
2.07
Israel
Switzerland
United Kingdom
35
2.08
Switzerland
Finland
United States
35
2.09
Switzerland
Sweden
Finland
36
2.10
Japan
Switzerland
Sweden
36
2.11
Switzerland
Sweden
Germany
37
2.12
Turkey
Australia
Chile
37
2.13
Chile
Estonia
United States
38
2.14
New Zealand
Canada
Australia
38
2.15
Ireland
Japan
Canada
39
2.16
Denmark
Switzerland
Sweden
39
2.17
Czech Republic
Estonia
France
40
2.18
United States
Switzerland
Israel
40
2.19
Ireland
Israel
Poland
41
2.20
Switzerland
Nederlands
Denmark
41
2.21
E-commerce, 2012
Iceland
Norway
Sweden
42
2.22
New Zealand
Switzerland
Finland
42
2.23
Finland
Estonia
New Zealand
43
2.24
Nederlands
Finland
France
43
2.25
Ireland
Switzerland
United Kingdom
44
2.26
Switzerland
Netherlands
Austria
44
2.00
2.01
Page
Benchmark
133
No. 1
No. 2
No. 3
Page
3.00
Qualified labour
Canada
Switzerland
South Korea
3.01
Iceland
Switzerland
Sweden
48
3.02
Iceland
Sweden
New Zealand
48
3.03
Unemployment, 2013
South Korea
Norway
Japan
49
3.04
Mexico
South Korea
Greece
49
3.05
Ireland
Belgium
Finland
50
3.06
Iceland
Denmark
Switzerland
50
3.07
Chile
South Korea
Turkey
51
3.08
Denmark
Switzerland
Ireland
51
3.09
Australia
Greece
Turkey
52
3.10
Norway
Sweden
Canada
52
3.11
South Korea
United States
Norway
53
3.12
United States
Canada
South Korea
53
3.13
Chile
Australia
France
54
3.14
Japan
South Korea
Finland
54
3.15
South Korea
Japan
Switzerland
55
3.16
Japan
Finland
Estonia
55
3.17
South Korea
Czech Republic
Slovak Republic
56
3.18
South Korea
Japan
Canada
56
3.19
Belgium
Nederlands
Turkey
57
3.20
South Korea
Germany
Greece
57
3.21
United States
Ireland
Czech Republic
58
3.22
New Zealand
Switzerland
Australia
58
3.23
Switzerland
United States
Australia
59
3.24
Switzerland
Germany
United Kingdom
59
3.25
Denmark
Switzerland
IcelandB 6060
134
Page
No. 1
No. 2
No. 3
4.00
Benchmark
Public economy
Switzerland
South Korea
Estonia
4.01
Switzerland
Mexico
Chile
64
4.02
South Korea
Switzerland
Turkey
64
4.03
South Korea
Greece
Italy
65
4.04
Estonia
Norway
Australia
65
4.05
Norway
Finland
South Korea
66
4.06
South Korea
Poland
Switzerland
66
4.07
Finland
Hungary
Canada
67
4.08
United Kingdom
Finland
Iceland
67
4.09
Finland
Iceland
France
68
4.10
Denmark
New Zealand
Finland
68
No. 1
No. 2
No. 3
Switzerland
Chile
Poland
Mexico
Chile
United States
72
Benchmark
5.00 Costs
Page
Page
5.01
5.02
Chile
Mexico
Switzerland
72
5.03
Chile
South Korea
Mexico
73
5.04
Ireland
Slovenia
Poland
73
5.05
Belgium
Canada
Slovak Republic
74
5.06
Japan
Switzerland
Ireland
74
5.07
Poland
Switzerland
Sweden
75
5.08
Poland
Hungary
Slovak Republic
75
Greece
Ireland
5.10
Spain
France
Spain
Slovak Republic
76
76
135
136
137
INDEX TO BENCHMARKS
> 3.25
60
> 3.23
59
> 4.10
68
> 2.20
41
> 4.03
65
> 2.23
43
> 5.07
75
> 2.15
> 5.08
75
> 5.05
74
> 5.04
73
> 1.14
Cultural openness
39
28
> 1.12
27
> 1.07
> 1.10
25
26
E-commerce
> 2.21
Economic freedom
42
> 2.22
42
> 4.09
68
> 2.26
44
> 3.08
Employee motivation
51
> 3.05
> 2.25
Entrepreneurial activity
Equal opportunities
44
> 2.13
50
38
> 5.10
76
> 3.10
52
> 3.11
> 3.12
53
53
138
> 1.03
Export performance
23
> 1.02
22
> 1.05
24
> 1.01
Exports, growth in
22
> 3.09
52
> 2.19
41
> 1.06
> 1.08
25
> 1.09
26
> 3.22
24
58
> 2.14
38
> 1.11
27
> 2.17
Gazelle enterprises
40
> 1.13
28
> 4.08
67
> 2.12
37
> 4.06
66
> 3.04
49
> 1.16
Image abroad
Inflation, annual
29
> 5.06
74
> 2.24
Infrastructure, quality
Innovation performance
43
> 2.11
37
> 1.15
> 3.13
54
29
> 2.01
32
Job mobility
> 3.07
51
> 3.01
48
48
> 2.03
> 3.02
33
> 2.04
33
> 3.06
50
Marginal tax rate for high wage earners, including indirect taxes
> 5.03
Marginal tax rate for medium wage earners, including indirect taxes
Mathematical qualifications, OECD's PISA Study
Mentality of society supporting competitiveness
> 3.15
> 2.18
> 5.02
73
72
55
40
139
> 2.09
36
> 2.10
36
> 3.21
> 3.24
59
> 4.04
58
65
> 4.05
66
> 4.02
> 2.02
64
32
> 4.01
64
> 3.14
54
> 2.05
34
> 2.06
34
> 4.07
67
> 3.16
55
> 2.07
35
> 5.01
72
> 3.19
57
> 3.18
56
> 3.20
57
Unemployment
> 3.03
49
> 5.09
76
> 2.08
35
> 1.04
23
> 3.17
56
> 2.16
39
For the tenth consecutive year, the Global Benchmark Report 2014
examines how the global challenge is met in the OECD countries.
The assessment is based on 87 benchmarks across ve pillars comprising Level of globalisation, Productivity and innovation, Qualied
labour, Public economy and Costs. Together these pillars constitute
the foundation for creating open and prosperous nations capable of
creating and sustaining growth and balance. The report highlights
strengths and weaknesses of each OECD country in facing international competition, providing a picture of each countrys ability to develop attractive business environments and utilise opportunities presented by globalisation.
The conditions for doing business in the global economy are constantly changing presenting new challenges and opportunities.
DI ANALYSIS
DI ANALYSIS
GLOBAL
BENCHMARK
REPORT
Including themes on global investment ows and Africa