The World Economic Forum Competitiveness Report isn't much chop it seems

In World Economic Forum turns its forensic gaze on competition Bernard Keane and Glenn Dyer look at the latest Competitiveness Report from the World Economic Forum and find it to be severely flawed. It seems that much of the report is based on a survey of a fairly small number of executives. Some of the results of the surveys are ludicrous. For example:

Indeed, a recurring theme of the WEF report is its lavish praise for the oil sheikdoms. It coos over Saudia Arabia’s “solid institutional framework, efficient markets, and sophisticated businesses” and how Qatar’s “high levels of security are the cornerstones of the country’s very solid institutional framework”; Bahrain, which had to call in Saudi troops to brutally suppress an Arab Spring uprising, rates ahead of Australia in “trust in government”, and Qatar’s judiciary is rated as more independent than Australia’s (another area where executives thought Labor had dropped the ball), even though it is hand-picked by the kingdom’s ruling family.

Other points Keane and Dyer make include:

The question absent from the report, though, is: out of all the countries that WEF ranked ahead of Australia, where would you like to be doing business right now?

Switzerland? It came first, of course — the WEF is based there. That’s where the country’s central bank has spent the last year intervening daily in forex markets to keep its currency low to protect its exports. Second placegetter Singapore? It’s on the verge of recession after contracting in the second quarter this year; employment has shrunk for 14 straight months, and inflation is 4%. Bronze medalist Finland? That’s heading for a recession too — its economy contracted more than 1% in the second quarter. Unemployment is more than 8%.

How about the UK, mired in a depression? The US, struggling to get beyond feeble growth? Japan, facing its third lost decade and continuing political paralysis? Or Hong Kong? It pegs its currency to the US dollar and has done so for years.

It does seem to have good point though:

The only good thing about the report is the format — it’s the best, most accessible and user-friendly international report we’ve ever seen, and should be a template for every local and international comparative analysis.

Richard Chirgwin also gets stuck into the report in WEF dressing political polling as “research” calling it a joke and wondering "why, in spite of the report’s glaring flaws of methodology, does anyone take it seriously". He notes:

As I said, the report is no more than a gathering of political feelpinions from people whose entire interest stands or falls on their willingness to support whatever status quo they find themselves in.

The only appropriate response to the WEF’s report is to laugh and point. But because it’s the WEF, and the world’s entire cohort of business journalists – that is, stenographers of corporate announcements and worshipful acolytes of a ten-thousand-dollar suit – should be laughing. But they won’t: the number of business journalists in any country who aren’t either doe-eyed worshippers or advertorial captives could be counted without anyone pulling down their trousers to get to “twenty-one”.

So they’ll treat the WEF report as if it were serious research.

You’d be better trusting your weight to the anus-auctioneers of the international ratings agencies than giving any credence whatever to the WEF’s “competitiveness report”.

In other words, it's rubbish.