IMD World Competitiveness Booklet 2022
6. Concluding remarks From the previous discussion, we identify three trends that may affect the long-term competitiveness of countries. First, the geopolitical issues that culminated in the re-emergence of armed conflict in Europe may have global repercussions for years to come. For instance, the stability of political systems – a fundamental element of government efficiency – may become under threat in some parts of the world, affecting the ability of governments to facilitate long-term value creation. Second, regional variations in terms of what are considered to be key chal- lenges reflect a potential neglect of global risks that could ultimately have a severe impact on all countries. Perhaps at the moment those risks seem “foreign” in some regions. The COVID-19 crisis that continues to dominate those challenges faced in parts of Asia, for example, seem to be largely background noise in Western Europe. It is, however, possible that new COVID variants could emerge, postponing the return to normality everywhere, not just in Asia. Similarly, while the Ukrainian war may for now be considered an issue that’s too far from home to be significant in the South American region, the full global implications remain to be seen.
We could label the third trend “the new phase of globalization”. So far, one of the assumptions surrounding globaliza- tion has been that there is a degree of institutional interconnectedness among countries which leads to, for example, an almost uniform protection of share- holders’ rights around the world. The culmination of the three recent crises – health, economic and geopolitical – does, however, lead us to conclude that this new phase of globalization must be able to accommodate these risks and other unexpected threats. Government policies, for instance, will need to become more adaptable to shifting global condi- tions. Otherwise, countries that lack such adaptability will be more exposed to risks which could in turn be detrimental for their overall competitiveness. For the last couple of years our analysis has focused on the health and economic crises that have been brought about by the pandemic. However, our argument has always been that the fundamentals of competitiveness have remained the same, even under turbulent conditions. The institutional framework, the rule of law, infrastructure and education – the pillars of competitiveness – were relatively intact. Will this remain the case after the re-emergence of global geopolitical risks?
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