Global Sustainable Competitiveness Index

(3 February 2021) The competitiveness of Eastern European and some African countries may be underestimated while that of the world's top economies, like the United States and Singapore, overestimated. Wonder why? We'll give you a clue: sustainability.

The Global Sustainable Competitiveness Index (GSCI) by SolAbility* is one of multiple measures available today to estimate the competitiveness of countries. Others include the Global Competitiveness Index (GCI) by the World Economic Forum (WEF) and the World Competitiveness Ranking by IMD.

As its unique feature, SolAbility claims that the GSCI captures real competitiveness by integrating three dimensions of sustainable development: society, the environment, and the economy. The GSCI may be better aligned with ESG investing as it takes into account the framework that enables and defines the current situation rather than describing symptoms. Comparing SolAbility's index and that of the WEF for 2019 reveals commonalities and deviations although, on net, the two measures are positively correlated.

• The top spots in both indices are dominated by European and, in particular, Northern European countries, such as Sweden, Denmark, and Finland.
• The SolAbility GSCI demotes some countries relative to their strong performances in the WEF GCI, notably including the United States and Singapore, which ranked 32nd and 44th, respectively. And, they aren't the only ones - Japan and Australia also underperform on the GSCI.
• In contrast, some Eastern European countries, including Croatia, Latvia, and Estonia, have stronger results in the GSCI, each ranking in the top 10 despite falling outside even the top 30 in the GCI. Some of the world's least developed economies are right there with them; Ethiopia, Bolivia, and Paraguay each earned considerably higher GSCI rankings than their GDPs or the GCI would otherwise suggest.

*SolAbility is a Swiss-Korean sustainable intelligence think-tank providing expert sustainability solutions for corporate clients and ESG research for institutional investors.