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For a corporation or a nation to possess competitiveness, it must secure core competence. Securing a competitive advantage is a fundamental concept covered in the very first chapter of business management studies. In a global market economy where economic borders have effectively vanished, it is difficult to achieve a "competitive advantage" (or even survival) without world-class technological prowess. National competitiveness refers to the overall economic level of a country.
The World Economic Forum (WEF)—where chairpersons of global conglomerates, cabinet-level officials, and scholars discuss global challenges and seek international tasks—publishes an annual National Competitiveness Report. This report quantifies and ranks countries by covering economic "hardware" such as social overhead capital, and "software" such as globalization, management capability, and finance. This year's report was released on October 13 at its headquarters in Davos, Switzerland.
Notable points in this report include Finland maintaining its 1st place position, followed by the United States in 2nd. Nordic countries such as Sweden (3rd), Denmark (5th), Norway (7th), Iceland (10th), and the Netherlands (12th) dominate the top ranks. Globally, it is striking that Italy, which ranked 21st in 2001, plummeted to 47th (just behind China at 46th). Chile, which signed an FTA with Korea, ranked 22nd—the highest in South America and notably higher than Korea. In Asia, while most countries like Taiwan (4th), Singapore (7th), Japan (9th), and Hong Kong (21st) saw their rankings rise, Korea fell from 18th last year to 29th this year. Despite being the world's 12th largest economy, Korea’s national competitiveness sits at 29th. Specific areas showing significant lack of competitiveness are as follows:
Labor-Management Cooperation: 92nd / 93 countries
Hiring and Firing Practices: 73rd / 93 countries
Trust in Politicians: 85th / 104 countries
Efficiency of Parliament: 81st / 104 countries
Waste in Government Spending: 57th / 104 countries
Government’s Economic Forecasting Ability: 78th / 104 countries
Commonly identified issues include lack of policy consistency, inefficient bureaucracy, rigid labor laws, and high barriers in the financial market. The results clearly demonstrate that policy uncertainty, an unproductive political sphere, and unstable labor-management relations are hindering competitiveness. To restore competitiveness, suggested solutions include: abolishing regulations that impede business activities, resolving anti-corporate sentiment, establishing consistent policy stances, and easing hostile labor relations and labor market rigidity.
Government authorities and the Financial Supervisory Commission claimed the report lacks objectivity, calling it "merely reference material." It is true that the WEF rankings are based on surveys of approximately 8,700 prominent figures (mostly executives) across 104 countries regarding macroeconomic environments, the quality of public institutions, and technology/innovation, which can lead to questions regarding objectivity and reliability. Some groups argue that certain media outlets highlight this report due to an anti-government conservative bias. Currently, South Korea is experiencing deep conflict and hostility between progressives and conservatives across political, economic, and social sectors. This binary division of public opinion is a massive waste of time and moves the country further away from securing a competitive advantage. One wonders if the government would still treat the report as "mere reference material" if Korea's ranking had risen. Given the anti-corporate sentiment, high oil prices, rising raw material costs, high unemployment, stagnant domestic demand, and deep labor-management conflict, it is questionable to treat the decline in competitiveness as a trivial matter. Is it not a sign of maturity to gratefully accept even harsh advice, knowing that friends or neighbors can often see us more objectively?
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