BENCHMARKING & INTERNA- TIONAL COMPARISONS
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6.4 Global Competitiveness Report (GCR)
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Figure 6.7 show the methods that are used by the enterprises used to increase the competitiveness of their product offerings in the market. Generally Malaysian companies indicated higher degree of importance in design, copyright, patent and trademark registrations compared to their European counterparts. But the European enterprises indicated higher importance to gaining competitive advantage through offering higher complexity in their products or processes. On employing trade secret to gain competitive advantage, Malaysian and European enterprises showed equal preference.
Figure 6.7 Methods for Maintaining or Increasing Competitiveness in Product and/or Process Innovative Companies by Degree of Importance
Source: Community Innovation Survey, 2016
Note: EU’s data is from 2010-2012, Malaysia’s data is from 2012-2014.
Figure 6.8 shows the sources of innovation that were used by respondents. These were organised such that for any source of innovation given (9 Sources), the companies would indicate if the source is important or otherwise to their innovation efforts. The figure shows that for sources from within the enterprise or enterprise groups (Source 2), Scientific journals and trade and technical publications (Source 5) and commercial labs and institutes(Source 6) the European countries and Malaysia rated them equally important. As for all other sources, Malaysian companies find them more important compared to the European countries. This is especially so with sources from universities and higher education institutes and government, public or private research institutes (Sources 8 and 9).
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Figure 6.8 Sources of information used for product and / or process innovations by degree of importance
Source: Community Innovation Survey, 2016
Note: EU’s data is from 2010-2012, Malaysia’s data is from 2012-2014.
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Figure 6.8 Sources of information used for product and / or process innovations by degree of importance
Source: Community Innovation Survey, 2016
Note: EU’s data is from 2010-2012, Malaysia’s data is from 2012-2014.
6.4 Global Competitiveness Report (GCR)
The Global Competitiveness Report (GCR) is a yearly report that ranks innovation performance of 140 countries (2015-2016) around the world compiled by the World Economic Forum (WEF). Speci�ically, GCR the institutions, policies and factors of a country which in�luence the sustainability of the current and medium term levels of economic prosperity. The report assesses the ability of the countries to provide high levels of prosperity to their citizens. Indeed, the analysis of this data is important to uncover how ef�icient a country uses their available resources.
The GCR obtained its data from two main sources:
1. Leading international sources:
a. United Nations Educational, Scienti�ic and Cultural Organisation (UNESCO);
b. International Monetary Fund (IMF); and c. World Health Organisation (WHO).
2. The WEF annual executive opinion survey.
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In general, 12 pillars were used to construct the competitiveness index of a country comprising:
institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market development, technology readiness, market size, business sophistication, and innovation. The findings of the GCR start with an analysis of selected overarching topics and then narrowing it down to regions and selected countries, providing detailed scorecards for all the economies of the countries in the full report.
The GCR ranking and score value of 17 selected countries for the year 2015-2016 and 2014- 2015 are shown in Table 6.3. The ranking shows that Switzerland was the most competitive country, followed by Singapore, United States of America, Germany, Netherland, Japan and Hong Kong. Among South East Asian countries, Singapore ranked highest, followed by Malaysia which is ranked 18th with GCR index of 5.23 for the year 2015-2016. All other countries in the South East Asian Countries (SEA) were ranked lower than Malaysia. Malaysia was also positioned higher than Australia, Republic of Korea, China, Thailand and Indonesia.
Table 6.3 Ranking of Selected Countries in the Global Competitiveness Report (GCR) 2014-2015 and 2015-2016
Country 2015-2016 2014-2015
Ranking Score Ranking Score
Switzerland 1 5.80 1 5.70
Singapore 2 5.68 2 5.65
United States 3 5.61 3 5.54
Germany 4 5.53 5 5.49
Netherland 5 5.50 8 5.45
Japan 6 5.47 6 5.47
Hong Kong 7 5.46 7 5.46
Finland 8 5.45 4 5.50
Sweden 9 5.43 10 5.41
United Kingdom 10 5.43 9 5.41
Taiwan 15 5.28 14 5.25
Malaysia 18 5.23 20 5.16
Australia 21 5.15 22 5.08
Republic of Korea 26 4.99 26 4.96
China 28 4.89 28 4.89
Thailand 32 4.64 31 4.66
Indonesia 37 4.52 34 4.52
Source: Global Competitiveness Report, WEF
Note: Ranking over 140 countries (2015-2016); 144 countries (2014-2015)
The GCR had further broken down the factors of innovation. The countries were further ranked based on the most important factors, namely the innovation (I), business sophistication (BS), and innovation and business sophistication combined (IBS). The ranking of the same selected 17 countries (arranged according to the main index ranking), based on these factors, are shown in Table 6.4.
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NATIONAL SURVEY OF INNOVATION 2015
In general, 12 pillars were used to construct the competitiveness index of a country comprising:
institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market development, technology readiness, market size, business sophistication, and innovation. The findings of the GCR start with an analysis of selected overarching topics and then narrowing it down to regions and selected countries, providing detailed scorecards for all the economies of the countries in the full report.
The GCR ranking and score value of 17 selected countries for the year 2015-2016 and 2014- 2015 are shown in Table 6.3. The ranking shows that Switzerland was the most competitive country, followed by Singapore, United States of America, Germany, Netherland, Japan and Hong Kong. Among South East Asian countries, Singapore ranked highest, followed by Malaysia which is ranked 18th with GCR index of 5.23 for the year 2015-2016. All other countries in the South East Asian Countries (SEA) were ranked lower than Malaysia. Malaysia was also positioned higher than Australia, Republic of Korea, China, Thailand and Indonesia.
Table 6.3 Ranking of Selected Countries in the Global Competitiveness Report (GCR) 2014-2015 and 2015-2016
Country 2015-2016 2014-2015
Ranking Score Ranking Score
Switzerland 1 5.80 1 5.70
Singapore 2 5.68 2 5.65
United States 3 5.61 3 5.54
Germany 4 5.53 5 5.49
Netherland 5 5.50 8 5.45
Japan 6 5.47 6 5.47
Hong Kong 7 5.46 7 5.46
Finland 8 5.45 4 5.50
Sweden 9 5.43 10 5.41
United Kingdom 10 5.43 9 5.41
Taiwan 15 5.28 14 5.25
Malaysia 18 5.23 20 5.16
Australia 21 5.15 22 5.08
Republic of Korea 26 4.99 26 4.96
China 28 4.89 28 4.89
Thailand 32 4.64 31 4.66
Indonesia 37 4.52 34 4.52
Source: Global Competitiveness Report, WEF
Note: Ranking over 140 countries (2015-2016); 144 countries (2014-2015)
The GCR had further broken down the factors of innovation. The countries were further ranked based on the most important factors, namely the innovation (I), business sophistication (BS), and innovation and business sophistication combined (IBS). The ranking of the same selected 17 countries (arranged according to the main index ranking), based on these factors, are shown in Table 6.4.
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Table 6.4 Country Ranking for Components of Innovation and Sophistication Factor Country Overall Innovation Factor BS Factor IBS Factor
Rank Rank Score Rank Score Rank Score
Switzerland 1 1 5.76 1 5.79 1 5.78
Singapore 2 9 5.24 18 5.13 11 5.19
United States 3 4 5.58 4 5.60 4 5.59
Germany 4 6 5.51 3 5.70 3 5.61
Netherland 5 8 5.37 5 5.56 6 5.46
Japan 6 5 5.54 2 5.77 2 5.66
Hong Kong 7 27 4.40 16 5.20 23 4.80
Finland 8 2 5.73 14 5.28 5 5.50
Sweden 9 7 5.46 7 5.44 7 5.45
United Kingdom 10 12 5.02 6 5.54 9 5.28
Taiwan 15 11 5.10 21 5.01 16 5.06
Malaysia 18 20 4.82 13 5.29 17 5.05
Australia 21 23 4.53 27 4.70 26 4.61
Republic of Korea 26 19 4.83 26 4.80 22 4.82
China 28 31 3.89 38 4.32 34 4.11
Thailand 32 57 3.41 35 4.36 48 3.88
Indonesia 37 30 3.94 36 4.35 33 4.14
Source: Global Competitiveness Report, 2015-2016, WEF
Note: BS - Business Sophistication Factor, IBS - Innovation and Business Sophistication Factor
In the innovation factor, Switzerland had the highest ranking, followed by Finland, USA and Japan. For the business sophistication factor, Switzerland was again ranked in the highest position followed by Japan, Germany, United States, and the Netherland. For both of these factor components combined, Switzerland was ranked in the highest position followed by Japan, Germany, USA, and Finland respectively. Malaysia was placed quite favorably in the ranking, being positioned 20th for innovation, 13th for business sophistication, and 17th for innovation and business sophistication combined. Comparing nations in the South East Asia region, Singapore was ranked 1st for innovation followed by Malaysia, Indonesia and Thailand respectively. For business sophistication, Singapore was again ranked 1st followed by Malaysia, Thailand and Indonesia respectively. Lastly, for innovation and business sophistication factor combined, Singapore is ranked 1st followed by Malaysia, Indonesia and Thailand. Malaysia nonetheless had improved its ranking in these aspects compared to the year before.
As a whole, Switzerland had the three top positions for all the factor components of innovation followed by Singapore, United States and Germany. Malaysia nonetheless has improved its ranking progressively through the years in the aspects of innovation and competiveness.
Malaysia’s continuing improvement in its position in the GCR ranking would mainly depend on the improvement of female participation in the workforce (now 118th, 59 women for every 100 men in the workforce), macroeconomic stability (35th), and technological readiness (47th) as small input in these pillars would improve the sectorial rankings tremendously. In the meantime the efforts to improve the other pillars should not be dawdled – balanced budget, general improvement in economic environment. However, private sector efforts to invest in technology,
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to pursue productivity, and to nurture innovations and talents are continuously needed to place Malaysia into better positions in the GCR as well as to be a developed nation by 2020.
Another speci�ic sector that needs to be looked at is the Environmental and Green economic sector, as this survey had shown that the companies had not really responded to the various calls to green the world.