Milan, 27 January 2015 Where do we stand? Global perspectives on the Industrial Competitiveness of Italian manufacturing International Conference The industrial competitiveness of Italian manufacturing A comparison between the UNIDO s Competitive Industrial Performance Index, the WEF and the IMD rankings Antonio Andreoni SOAS Economics Department, University of London Institute for Manufacturing, University of Cambridge
International benchmarking of Industrial competitiveness: diffusion and impact Growing interest for Benchmarking tools Competitiveness indexes (both performances and drivers) among policy makers, manufacturing companies and financial markets Impact on: Policy debate and targeting Companies location investment Financial markets
International benchmarking of Industrial competitiveness: variety Trade based indexes and economic complexity analysis International Trade Centre UNCTAD/WTO (Trade Performance Index) OECD (TiVA Methodology and Analysis) + Edison Foundation (Fortis Corradini Index) + Harvard University et al. (Economic Complexity Index and Analysis) Approaches focused on National Competitiveness Benchmarking World Economic Forum (Global Competitiveness Index) EU Commission (European Competitiveness Index and Analysis) + IMD Business School (World Competitiveness Scoreboard) Approaches focused on Industrial Competitiveness Benchmarking UNIDO (Competitive Industrial Performance Index) Deloitte and US Competitiveness Council (Global Manufacturing Competitiveness Index)
The Italian manufacturing puzzle UNIDO 2012 IMD 2014 WEF 2014 EU WEF 2014 (EU28) Deloitte/USCC 2013 Germany (1) USA (1) Switzerland (1) Finland (1) China (1) Japan (2) Switzerland (2) Singapore (2) Sweden (2) Germany (2) USA (3) Singapore (3) USA (3) Netherlands (3) USA (3) Netherlands (8) Philippines (42) Turkey (45) Lithuania (17) Russia (28) Ireland (9) Portugal (43) Oman (46) Czech Rep (18) Romania (29) Belgium (10) India (44) Malta (47) Latvia (19) UAE (30) Taiwan (11) Slovak Rep (45) Panama (48) Cyprus (20) Colombia (31) Italy (12) Italy (46) Italy (49) Italy (21) Italy (32) France (13) Romania (47) Kazakhstan (50) Poland (22) Spain (33) UK (14) Hungary (48) Costa Rica (51) Slovak Rep (23) Saudi Arabia (34) Austria (15) Ukraine (49) Philippines (52) Croatia (24) Portugal (35) Sweden (16) Peru (50) Russian Fed (53) Hungary (25) Egypt (36)
Countries movements across rankings (>5 positions) UNIDO Country name WEF Ranking Diff IMD Ranking Diff Ranking Diff 2011 (Top 25= 83.43% WMVA) 2012 UNIDO WEF 2012 UNIDO IMD WEF IMD 1 Japan 10 9 27 26 5 2 Germany 6 4 9 7 3 3 United States of America 7 4 2 1 6 4 Republic of Korea 19 15 22 18 2 5 China, Taiwan Province 13 8 7 2 6 6 Singapore 2 4 4 2 2 7 China 29 22 23 16 8 8 Switzerland 1 7 3 5 8 9 Belgium 17 8 25 16 2 10 France 21 11 29 19 6 11 Italy 42 31 40 29 1 12 Netherlands 5 7 11 1 10 13 Sweden 4 9 5 8 7 14 United Kingdom 8 6 18 4 5 15 Ireland 27 12 20 5 8 16 Austria 16 0 21 5 14 17 Canada 14 3 6 11 3 18 Finland 3 15 17 1 6 19 Spain 36 17 39 20 11 20 Czech Republic 39 19 33 13 16 21 Malaysia 25 4 14 7 8 22 Mexico 53 31 37 15 1 23 Thailand 38 15 30 7 7 24 Denmark 12 12 13 11 7 25 Poland 41 16 34 9 24
International benchmarking: comparative mapping of methodologies Drivers + Performance Performance Trade based indexes & analyses Industrial & trade composite index Industrial Competitiveness (revealed strengths) National Competitiveness (qualities)
The Industrial competitiveness of IT IMD World Competitiveness Scoreboard 60 Countries 1 Composite 4 Sub composites (331 criteria in total)
The Industrial competitiveness of IT IMD & Sub composites Ranking 60 55 50 45 40 35 30 25 20 15 10 5 0 Composite index + 4 Sub composites 2010 2011 2012 2013 2014 Declining competitiveness Competitiveness Germany Competitiveness France Competitiveness UK Competitiveness Italy Economic performance Government efficiency Business efficiency Infrastructure
The Industrial competitiveness of IT World Economic Forum 20% 50% 30% 49!!!
The Industrial competitiveness of IT World Economic Forum: 49 35 26 25 12 22 38 < 38!!! > 100!!!
The Industrial competitiveness of IT European Competitiveness Index EU WEF
The UNIDO Competitive Industrial Performance Index (CIP Index) 1. Manufacturing industries are the main drivers of economic development and countries competitiveness Industrialised economies Emerging industrial economies Least developed countries Other developing countries 2. Separation between structural and institutional variables: varieties of capitalism, beyond a fits for all institutional model of national competitiveness
The UNIDO Competitive Industrial Performance Index (CIP Index) 3. Focus on performances rather than drivers 4. Focus on quantitative data, transparency and modularity 5. Focus on mediumlong term structural trajectories
12 The UNIDO Competitive Industrial Performance Index (CIP Index) World150
The UNIDO Competitive Industrial Performance Index (CIP Index) Italy is the: 12 th most competitive industrial country in the world 2 nd most competitive industrial country among EU major economies (above France and UK and only below Germany) Italy was the: 4 th most competitive industrial country in the world from 1990 until 2005 Italy hit harder, still resilient: Lost 8 positions between 2005 2012 (Vs France, 7; Vs UK 6)
World Impact and EU comparators in 2010 7th most competitive industrial country with respect to its Shares in World Manufactures Trade (3.791 %) vs Germany (10.219%), UK (2.989%), France (4.189%) 8th most competitive industrial country with respect to its Shares in World Manufactures Value Added (2.325%) vs Germany (5.317%), UK (2.691%), France (2.494%)
EU main comparator 1995 2010 Same structural pattern Persistent structural differences Technological specialisation Value capture dynamics in SVCs
A two speed world: Structural transformations in the global manufacturing landscape Average Annual MVA growth rate
The manufacturing loss and the new forms of industrial polarisation New forms of industrial polarisation across regions in the world (China and the rest) between nations in the same regions (Europe) within countries (from North South to Export oriented vs Inward oriented companies among the Northern regions)
Where do we stand?... Where should Italy go? Competitiveness is in the eye of the beholder Beyond simplistic analyses Composite puzzle Need for triangulation and multi level analyses Need for a new open debate about regional and national industrial policies in Italy and crossregional industrial policies in Europe No industrial policy, is the worst type of industrial policy (especially when the other countries are implementing technology, manufacturing and industrial policies).
Sources Andreoni, A. and Upadhyaya, S. (2014) Growth and distribution pattern of the world manufacturing value added: A statistical profile, UNIDO Working paper series 2/14. IMD World Competitiveness Yearbook (2014) UNIDO (2013) Industrial Competitiveness Report UNIDO WEF (2014) The Future of Manufacturing World Economic Forum (2014) The World Competitiveness Report 2014 15 O Sullivan, E., Andreoni, A., Lopez Gomez, G. and Gregory, M. (2013) What is New in the New Industrial Policy? A Manufacturing System Perspective, Oxford Review of Economic Policy, 29(2), 432 462. Andreoni, A. (forthcoming 2015) Varieties of Industrial Policy: Models, Packages and Transformation Cycles, IPD/JICA Task Force on Industrial Policy and Transformation, Jordan, June 5 6. The paper was invited for publication in a volume jointly edited by the Task Force Chairs Joseph Stiglitz, Jose Antonio Ocampo and Akbar Noman. In preparation for Columbia University Press.