IMD World Competitiveness Center

2016 IMD World Competitiveness Yearbook: Portugal

Christos CabolisChief Economist, IMD World Competitiveness Center

IMD & The World Competitiveness Center

Leading Global Business School

The IMD World Competitiveness Center (WCC) - Publisher of the annual IMD World Competitiveness Yearbook (since 1989)

IMD Definition of Competitiveness

“the extent to which a country is able to facilitate an environment in which enterprises can generate sustainable value,”

…sustainable value creation is the long term capacity of enterprises to remain profitable, create fulfilling jobs, while minimizing the environmental impact of their activities

Economic Performance

GovernmentEfficiency

BusinessEfficiency

Infrastructure

Domestic Economy International Trade International Investment Employment Prices

Public Finance Fiscal Policy Institutional Framework Business Legislation Societal Framework

Productivity Labor Market Finance Management Practices Attitudes and Values

Basic Technological Scientific Health & Environment Education

OVERALLRANKING

2/3s Statistics

Competitiveness that can be measured!

The emphasis on HARD FACTS

ensures objectivity and transparency

342 Criteria 20 Sub-Factors 4 Factors Overall Ranking

1/3 Survey

Competitiveness as it is perceived!

Over 6,200 respondents

Competitiveness Breakdown:Methodology / Overall Ranking

Overall Ranking 2016Top 10 countries

Economic Performance

GovernmentEfficiency

BusinessEfficiency

Infrastructure

Domestic Economy International Trade International Investment Employment Prices

Public Finance Fiscal Policy Institutional Framework Business Legislation Societal Framework

Productivity Labor Market Finance Management Practices Attitudes and Values

Basic Technological Scientific Health & Environment Education

OVERALLRANKING

48th

28th

46th

48th

4333425515

3946504935

3833322117

2/3s Statistics

Competitiveness that can be measured!

The emphasis on HARD FACTS

ensures objectivity and transparency

342 Criteria 20 Sub-Factors 4 Factors Overall Ranking

39thOut of 61

1/3 Survey

Competitiveness as it is perceived!

Over 5,400respondents

Competitiveness Breakdown: PortugalMethodology / Overall Ranking

5746392231

Competitiveness Landscape: Portugal2016 & 2015

Portugal 2016 43 33 42 55 15 57 46 39 22 31 39 46 50 49 35 38 33 32 21 17Portugal 2015 44 36 22 54 21 52 41 33 14 31 42 47 47 52 38 36 30 32 23 15

+1

+3

-20

-1

+6

-5

-5

-6

-8

-

+3

+1 -3+3

+3 -2

-3-

+2

-2

Dom

estic

Eco

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y

Inte

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l Tra

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Inte

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l Inv

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ent

Empl

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Pric

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Publ

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Fisc

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olicy

Inst

itutio

nal F

ram

ewor

k

Busin

ess

Legi

slatio

n

Soci

etal

Fram

ewor

k

Prod

uctiv

ity &

Effi

cien

cy

Labo

r M

arke

t

Fina

nce

Man

agem

ent

Prac

tices

Att

itude

s an

d Va

lues

Basic

Infra

stru

ctur

e

Tech

nolo

gica

l Inf

rast

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ure

Scie

ntifi

c In

fras

truc

ture

Hea

lth a

nd E

nvir

onm

ent

Educ

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n

Economic Performance Government Efficiency InfrastructureBusiness Efficiency

Overall

2628

4846

3448

4548

3639

Portugal 2016

Portugal 2016

Portugal 2016

Portugal 2016

Portugal 2016

Portugal 2015

Portugal 2015

Portugal 2015

Portugal 2015

Portugal 2015

2015 2015 2015 2015

Attitudes & Values: 35th

International Trade: 33rd

Business legislation: 22nd

Education: 17th

Health: 21st

Key Strengths 2016: Portugal

Export Concentration by product 6th Start up days 4th

Start up procedures 6th

Public Expenditure on Education per pupil 3rd

Tariff Barriers

15th

Language Skills12th

Green Technology 4th Medical Assistance11th

Flexibility & Adaptability

15thNational Culture

11th

Key Challenges 2016: Portugal

Maintain public deficit reduction trend and foster public/private debt reduction.

Promote a healthy and well-capitalised banking system.

Attract and retain foreign investment, particularly through stable fiscal policies.

Improve qualifications and promote labour market reforms that favour merit and flexibility.

Boost productivity and keep up a sustainable trade balance surplus.

Provided by: Porto Business School

Key Attractiveness Indicators 2014 - 2016The Top Perceptions of Portuguese Executives

2014 2015 2016

From a list of 15 indicators, respondents of the Executive Opinion Survey select the five that they perceived as the key attractiveness factors of their economy. The chart shows the percentage of responses for the top choices over three years.

Openness is correlated with competitiveness. We argue it is a key driver.

Competitiveness and Trade Openness

Most competitive – rolling averages – Least competitive

Trade as a % GDP Protectionism does not impair business [Survey]

IMD World Talent Report: Portugal2013 - 2015

Portugal

Rank 2015

of 61

2511

38

OverallInvestment & Development

Appeal

33Readiness

11

2011

Talent Factor 1: : PortugalInvestment and Development

Criteria Value 2015 Rank

Total Public Expenditure on Education Percentage of GDP 6.77 % 5

Public Expenditure on Education per Pupil (Secondary) Percentage of GDP per capita 36.31 % 3

Pupil-Teacher Ratio (Primary Education) Ratio of students to teaching staff 11.87 Ratio 11

Pupil-Teacher Ratio (Secondary Education) Ratio of students to teaching staff 8.56 Ratio 4

Apprenticeships Are sufficiently implemented 4.63 Survey 33

Employee Training Is a high priority in companies 4.41 Survey 57

Female Labor Force Percentage of total labor force 48.69 % 6

Health Infrastructure Meets the needs of society 7.09 Survey 22

Factor 1 : Investment and Development

Talent Factor 2: : PortugalAppeal

Criteria Value 2015 Rank

Cost-of-Living Index Index of a basket of goods & services 78.70 Index 24

Attracting and Retaining Talents Is a priority in companies 5.70 Survey 49

Worker Motivation Is high 5.05 Survey 44

Brain Drain Does not hinder competitiveness in your economy 3.67 Survey 46

Quality of Life Is high 7.24 Survey 26

Foreign High-Skilled People Are attracted to your country's business environment 4.36 Survey 43

Remuneration in Services Professions Gross annual income including supplements such as bonuses 26,400 US$ 28

Remuneration of Management Total base salary plus bonuses and long-term incentives 177,599 US$ 29

Effective Personal Income Tax Rate Percentage of an income equal to GDP per capita 17.65 % 33

Personal Security and Private Property Rights Are adequately protected 8.08 Survey 21

Factor 2 : Appeal

Talent Factor 3: : PortugalReadiness

Criteria Value 2015 Rank

Labor Force Growth Percentage change -1.12 % 55

Skilled Labor Is readily available 5.74 Survey 28

Finance Skills Are readily available 5.60 Survey 45

International Experience Of senior managers is generally significant 4.18 Survey 57

Competent Senior Managers Are readily available 4.11 Survey 50

Educational System Meets the needs of a competitive economy 6.16 Survey 20

Science in Schools Is sufficiently emphasized 5.40 Survey 28

University Education Meets the needs of a competitive economy 6.95 Survey 16

Management Education Meets the needs of the business community 7.38 Survey 7

Language Skills Are meeting the needs of enterprises 8.11 Survey 10

Student Mobility Inbound Foreign tertiary-level students per 1000 inhabitants 1.76 Number 29

Educational Assessment - PISA PISA survey of 15-year olds 487.0 Value 30

Factor 3 : Readiness

More Information?

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