In December, 2012 Brazil’s Confederação Nacional de Industria (CNI) or the National Confederation of Industry published the findings of its annual comparative analysis of Brazil and the theme of competitiveness.
Brazil Competitiveness: Comparing Selected Countries 2012. This is now an annual project of the CNI and was first published in 2010.
The following is a translated summary of the report.
The recent growing attention to the theme of “competitiveness,” further advanced by globalization in all its respects, has multiplied the number of studies and research projects that compare variables related to economic and market competition and competitiveness across a broad category of economic activities and national experiences.
CNI’s Brazil Competitiveness: Comparing Selected Countries 2012 can certainly be included in this field of study, but does differ in important ways from the The Global Competitiveness Report of the World Economic Forum as well as the IMD World Competitiveness Yearbook, including:
- Our study provides a focused analysis on a selected sample of nations that share similar socio-economic characteristics and positions in the global marketplace while also providing for a more relevant comparison for understanding the respective competitiveness potential for a variety of Brazilian enterprises;
- Also, our set of variables is directly related to the reality and challenges facing our selected nation-state sample, but chosen from the universe of variables operationalized in many of the reports published by international authorities.
Factors that Shape Competitiveness and Related Variables
Competition refers to the capacity of an enterprise to compete in the marketplace, to attract the preferences of consumers. Firms have two fundamental mechanisms for attracting such consumer preference: price and differentiating the firm’s good or service through quality, innovation and marketing. The competitive potential of an economy (in this case national), can be evaluated through an examination of the mechanisms through which competition develops. In this sense, we consider the following variables than can shape competitiveness:
1. Labor costs;
2. Workforce development and availability;
3. Capital costs;
4. Infrastructure and logistics; and
Also, factors that provide the antecedent conditions or indirectly impact the competitiveness of firms include:
1. Macroeconomic environment;
2. Microeconomic environment;
3. Educational levels of the workforce and population;
4. Technology and innovation.
These factors shaping competitiveness were further conceptualized into 16 sub-factors and operationalized as 51 variables for observation and analysis. Our research design begins with this analytical framework comprised of 51 variables measured across the 13 nations composing our sample, providing the analytical conditions for understanding the competitiveness of Brazilian enterprises by factor and sub-factor.
The Sample and Comparative Reference
The competitive potential of the Brazilian economy is evaluated as a function of its relative position vis-à-vis the sample of countries selected for our study and their respective socio-economic characteristics and positions in the global marketplace. The sample consists of: South Africa, Argentina, Australia, Canada, Chile, China, Colombia, India, Mexico, Poland, Russia, South Korea, and Spain.
Summary of Key Conclusions
Brazil’s most important challenge is increasing its competitiveness. The relatively low competitiveness of the country is demonstrated through a variety of variables and studies, both national and international. Comparing Brazil with other relatively similar nation-states (based on level of development or respective competition in particular international markets) makes clear that this is the largest challenging facing Brazil today.
Of the fourteen countries evaluated in this study, Brazil ranks in 13th place in overall competitiveness, just ahead of Argentina. Brazil is among those countries who rank lowest among six of the eight major conditions associated with competitiveness. Brazil is placed in the intermediary group (7th out of 13 countries) in technological development and innovation; and in the highest group (4th out of 13) with respect to Labor costs and Workforce development and availability. However, it is important to highlight that Brazil ranks in last place in labor costs, but given its number one ranking in workforce availability, it averages itself into the highest group in the sample for this condition.
Four countries of the five Latin American nations sampled score in the bottom third of the full sample in overall competitiveness. Only Chile (in seventh place) places in the intermediary group.
Canada ranks as the most competitive economy in the sample. This country scores high in all factors with the exception of the Macroeconomic environment where it shares a position in the bottom third with Brazil, Australia, and Russia. The other three countries that score in the top third of the sample in overall competitiveness are: Australia, China, and South Korea.