Insights from the Executive Opinion Survey 2016
The sampling guidelines for the Executive Opinion Survey aim to reflect in the composition of surveyed companies the economic structure of the country while maintaining a 50 percent share of respondents from previous years. Figure 1 summarizes respondent demographics from the 2016 edition of the survey, thus demonstrating the efforts undertaken by the Partner Institutes to follow the sampling guidelines.
Because small- and medium-sized enterprises (SMEs) account for a large share of economic activities in most countries, the Partner Institutes are asked to collect the opinions from SMEs as well as from large companies (Figure 1a). In 2016, small enterprises, defined here as those with fewer than 50 employees, account for a share of respondents ranging from 18 percent in North America to 49 percent in Sub-Saharan Africa. On average, one respondent out of three has already taken part in the survey in the past. This allows maintaining a panel of constant respondents within the sample and increases the comparability of data across years (Figure 1b).
Being one of the most comprehensive, regular, and large-scale exercises of its kind, the Executive Opinion Survey allows us to monitor across time which areas businesses see as particularly problematic for the economic competitiveness of their countries. It is therefore an invaluable source that can inform public-private dialogue at the national and regional levels and help policymakers in prioritizing their efforts.
Figure 2 looks at the 2016 Executive Opinion Survey results in a new, innovative way. Focusing exclusively on the questions that feed into the Global Competitiveness Index, the answers of each respondent have been normalized as the distance (in percentage terms) from the respondent-specific average. These distances have then been re-aggregated through simple averages to form areas of analysis that, to the extent possible, mirror the components and subcomponents of the Global Competitiveness Index. Areas with a negative distance are the ones that, on average, respondents in the region have assessed as relatively more problematic. Importantly, given this normalization, results do not indicate the level of development of each element in the region. For example, a score of –18 percent for the efficiency of the financial market in Europe should not be compared with a score of –17 percent in sub-Saharan Africa to conclude that the level of efficiency in the two regions is similar. Rather these two negative scores indicate that business executives in both regions prioritize this element in a similar way in terms of how problematic it is with respect to the other drivers of competitiveness.
In the East Asia and Pacific region, businesses have given lower scores especially to the performance of the public sector and to the incidence of undue influence in their countries. With few exceptions, such as New Zealand, this holds true across most countries in the region, including advanced economies. The same areas are also problematic in Europe, according to the executives there, who have also expressed a negative assessment of the efficiency of their financial market. In that region, public institutions receive low scores in many Central and Eastern European countries, while financial market efficiency attracts most of the private sector’s discontent in the western half of the continent, particularly in the southern economies. This is also true in Eurasia, where falling oil prices have hit particularly hard and have put the financial sector under stress. Private companies in Eurasia also complain about the quality of public institutions, with undue influence being the factor with the second-lowest average score. Low fuel prices have also put a strain on the efficiency of financial markets in the Middle East and North Africa, where the use of human talent is also deemed particularly inefficient. As for Latin America and the Caribbean, executives seem to believe that most countries in the region remain plagued by high levels of corruption, undue influence on the government and other public institutions, and poor performance of the public sector. Latin America is also the region where results are most skewed, with the distance from the average score ranging from –27 percent (ethics and corruption) to +36 percent (trustworthiness and confidence in the financial sector). Public institutions collect low scores also in North America, although with a much smaller distance from the average (–11 percent on undue influence), while financial markets seem to have recovered well in the continent and their assessment is generally in line with that of other competitiveness factors. Ethics and corruption and undue influence are the areas that receive the lowest appraisal by businesses in South Asia, followed by infrastructure. This finding shows how the region, one of the poorest in the world, still needs to work on the basic foundations of competitiveness to allow its private sector to thrive. Sub-Saharan Africa economies appear to face many of the same challenges, although in this case the infrastructure gap appears even wider than it is in South Asia. The inefficiency of the financial market also attracts a lot of the discontent of businesses in the region, receiving an average score that is 17 percent lower than that of all competitiveness factors.
In terms of general trends, businesses across all regions appear generally optimistic about the capacity of their countries to adopt existing technologies, but, with the relevant exception of North America, all of them are almost equally negative about the quality of their innovation environment. Almost a decade after the outbreak of the global economic crisis, the efficiency of the financial markets is still a source of discontent across all regions, with a negative delta ranging from –22 percent for Eurasia to –4 percent in North America.