This appendix first presents the methodology and detailed structure of the Global Competitiveness Index 4.0 (GCI 4.0) in Section A. Section B lists the minor changes made to the methodology of the Index in 2019. Section C details the methods used to impute missing data points and reports the imputed values by indicator. Section D presents the methodology used to compute progress scores. Finally, Section E provides detailed descriptions and sources for each indicator included in the Index.
A. Computation and Composition of the GCI 4.0
The computation of the GCI 4.0 is based on successive aggregations of scores, from the indicator level (the most disaggregated level) to the overall GCI 4.0 score (the highest level). At every aggregation level, each aggregated measure is computed by taking the average (i.e. arithmetic mean) of the scores of its components, with a few exceptions described in Section D. The overall GCI 4.0 score is the average of the scores of the 12 pillars.
For individual indicators, prior to aggregation, raw values are transformed into a progress score ranging from 0 to 100, with 100 being the ideal state. See Section D for more details.
In the list below, weights are rounded to one decimal place, but full precision is used in the computation. Weight (%) within immediate parent category
Enabling environment
(not used in calculation)1
Pillar 1: Institutions — 8.3%
A. Security — 12.5%
1.01 Organized crime
1.02 Homicide rate
1.03 Terrorism incidence
1.04 Reliability of police services
B. Social capital — 12.5%
1.05 Social capital
C. Checks and balances — 12.5%
1.06 Budget transparency
1.07 Judicial independence
1.08 Efficiency of legal framework in challenging regulations
1.09 Freedom of the press
D. Public-sector performance — 12.5%
1.10 Burden of government regulation
1.11 Efficiency of legal framework in settling disputes
1.12 E-Participation
E. Transparency — 12.5%
1.13 Incidence of corruption
F. Property rights — 12.5%
1.14 Property rights
1.15 Intellectual property protection
1.16 Quality of land administration
G. Corporate governance — 12.5%
1.17 Strength of auditing and accounting standards
1.18 Conflict of interest regulation
1.19 Shareholder governance
H. Future orientation of government — 12.5%
I. Government adaptability — 50%
1.20 Government ensuring policy stability
1.21 Government’s responsiveness to change
1.22 Legal framework’s adaptability to digital business models
1.23 Government long-term vision
II. Commitment to sustainability — 50%
1.24 Energy efficiency regulation
1.25 Renewable energy regulation
1.26 Environment-related treaties in force
Pillar 2: Infrastructure — 8.3%
A. Transport infrastructure2 — 50%
I. Road — 25%
2.01 Road connectivity
2.02 Quality of road infrastructure
II. Railroad 2 — 25%
2.03 Railroad density
2.04 Efficiency of train services
III. Air — 25%
2.05 Airport connectivity
2.06 Efficiency of air transport services
IV. Sea — 25%
2.07 Liner shipping connectivity3
2.08 Efficiency of seaport services
B. Utility infrastructure — 50%
I. Electricity — 50%
2.09 Electricity access
2.10 Electricity supply quality
II. Water — 50%
2.11 Exposure to unsafe drinking water
2.12 Reliability of water supply
Pillar 3: ICT adoption4 — 8.3%
3.01 Mobile-cellular telephone subscriptions
3.02 Mobile-broadband subscriptions
3.03 Fixed-broadband internet subscriptions
3.04 Fibre internet subscriptions
3.05 Internet users
Pillar 4: Macroeconomic stability — 8.3%
4.01 Inflation
4.02 Debt dynamics
Human capital
(not used in calculation)5
Pillar 5: Health — 8.3%
5.01 Healthy life expectancy
Pillar 6: Skills — 8.3%
A. Current workforce — 50%
I. Education of current workforce — 50%
6.01 Mean years of schooling
II. Skills of current workforce — 50%
6.02 Extent of staff training
6.03 Quality of vocational training
6.04 Skillset of graduates
6.05 Digital skills among active population
6.06 Ease of finding skilled employees
B. Future workforce — 50%
I. Education of future workforce — 50%
6.07 School life expectancy
II. Skills of future workforce — 50%
6.08 Critical thinking in teaching
6.09 Pupil-to-teacher ratio in primary education
Markets
(not used in calculation)5
Pillar 7: Product market — 8.3%
A. Domestic market competition — 50%
7.01 Distortive effect of taxes and subsidies on competition
7.02 Extent of market dominance
7.03 Competition in services
B. Trade openness — 50%
7.04 Prevalence of non-tariff barriers
7.05 Trade tariffs
7.06 Complexity of tariffs
7.07 Border clearance efficiency
Pillar 8: Labour market — 8.3%
A. Flexibility — 50%
8.01 Redundancy costs
8.02 Hiring and firing practices
8.03 Cooperation in labour-employer relations
8.04 Flexibility of wage determination
8.05 Active labour market policies
8.06 Workers’ rights
8.07 Ease of hiring foreign labour
8.08 Internal labour mobility
B. Meritocracy and incentivization — 50%
8.09 Reliance on professional management
8.10 Pay and productivity
8.11 Ratio of wage and salaried female workers
to male workers
8.12 Labour tax rate
Pillar 9: Financial system6 — 8.3%
A. Depth
9.01 Domestic credit to private sector
9.02 Financing of SMEs
9.03 Venture capital availability
9.04 Market capitalization
9.05 Insurance premium
B. Stability
9.06 Soundness of banks
9.07 Non-performing loans
9.08 Credit gap
9.09 Banks’ regulatory capital ratio
Pillar 10: Market size7 — 8.3%
10.01 Gross domestic product
10.02 Imports of goods and services
Innovation ecosystem
(not used in calculation)8
Pillar 11: Business dynamism — 8.3%
A. Administrative requirements — 50%
11.01 Cost of starting a business
11.02 Time to start a business
11.03 Insolvency recovery rate
11.04 Insolvency regulatory framework
B. Entrepreneurial culture — 50%
11.05 Attitudes towards entrepreneurial risk
11.06 Willingness to delegate authority
11.07 Growth of innovative companies
11.08 Companies embracing disruptive ideas
Pillar 12: Innovation capability9 — 8.3%
A. Diversity and collaboration
12.01 Diversity of workforce
12.02 State of cluster development
12.03 International co-inventions
12.04 Multistakeholder collaboration
B. Research and development
12.05 Scientific publications
12.06 Patent applications
12.07 R&D expenditures
12.08 Research institutions prominence index
C. Commercialization
12.09 Buyer sophistication
12.10 Trademark applications
B. Changes to the Methodology
Following the introduction of the GCI 4.0 methodology in the 2018 edition, minor changes have been made to the methodology this year. These changes are based on additional feedback received in the past year or made necessary as a result of data that is no longer being collected. They do not affect in any major way the comparability of results across the two editions.
Pillar 1: Institutions
- Budget transparency (indicator 1.06) is now assessed using the Open Budget Index, sourced from the International Budget Project. This indicator replaces the Open Budget Data score, which has been discontinued.
- Former indicator 1.13, Future orientation of government, which is comprised of four indicators derived from the Executive Opinion Survey, is now sub-pillar H of Pillar 1 (see Section A). The four indicators remain and are complemented by three new indicators: Energy efficiency regulation (indicator 1.24), Renewable energy regulation (1.25) and Environment-related treaties in force (1.26), which collectively measure a government’s commitment to sustainability, an indication of its future orientation. As a result of these changes, the numbering of indicators in Pillar 1 was modified according to the new order.
Pillar 7: Product market
The Service Trade Restrictiveness Index has been dropped owing both to the absence of updates to that index and to the fact that different methodologies are used to assess countries. These changes make any cross-country and time comparison impossible. By no means should this exclusion been interpreted as implying that services are no longer relevant for competitiveness.
Pillar 8: Labour market
Indicator 8.08, Internal labour mobility, no longer applies to city states, as the concept of internal mobility is of little relevance in such small economies. Bahrain, Brunei Darussalam, Hong Kong SAR, Kuwait, Malta, Qatar and Singapore were identified as city states.
C. Missing Data Imputation
Missing and outdated values (the cut-off year varies by indicator) are imputed for the purpose of the calculation. Table 1 on the following page presents the imputation method and the imputed values by indicator. Note that the Economy Profiles and interactive ranking tables (available online at http://www.weforum.org/gcr) do not report imputed values.
D. Computation of Progress Scores and Frontier Values
To allow the aggregation of indicators of different nature and magnitude, each indicator entering the GCI 4.0 is converted into a unit-less score, called “progress score”, ranging from 0 to 100 using a min-max transformation. Formally, each indicator is re-scaled according to the following formula:
where valuei,c is the “raw” value of country c for indicator i, worst performance (wpi,) is the lowest acceptable value for indicator i and frontieri corresponds to the best possible outcome. Depending on the indicator, the frontier may be a policy target or aspiration, the maximum possible value, or a number derived from statistical analysis of the distribution (e.g. 90th or 95th percentile). If a value is below the worst performance value, its score is 0; if a value is above the frontier value, its score is capped at 100. When a logarithmic transformation is applied on an indicator, the same transformation is applied to the frontier and worst performance values displayed in Table 1.
In the case of indicators derived from the Executive Opinion Survey, frontieri and wpi are always 7 and 1, respectively. These values correspond to the two extreme answers of any questions.
Table 2 on the following page provides the actual floor and frontier values used for the normalization of each individual indicator. In a few cases, reported in the table, a logarithmic transformation is applied to the raw value prior to conversion.
(Appendix A continues on the following page)