2: How do we measure it? We break down countries competitiveness into 12 distinct areas, or pillars, which we group into three sub-indexes. These are basic requirements which comprise institutions, infrastructure, macroeconomic environment and health and primary education. We call these basic as these pillars tend to be those that countries at earlier stages of development tackle first. Next comes our efficiency enhancers sub-index. Essentially were looking at markets – whether it is the functioning of goods, labour or financial markets – but we also consider higher education and training, and technological readiness, which measures how well economies are prepared for the transition into more advanced, knowledge-based economies. Our last pillar, innovation and sophistication, consists of two pillars: business sophistication and innovation. These are more complex areas of competitiveness that require an economy to be able to draw on world-class businesses and research establishments, as well as an innovative, supportive government. Countries that score highly in these pillars tend to be advanced economies with high gross domestic product per capita.
3: Factors determining the competitiveness of the country: