Better roads = improved competitiveness

The upgrading and maintenance of road networks are effective tools for countries wishing to improve their competitiveness. Roberto Crotti from the World Economic Forum explains why.

"Good and effective infrastructure is one of the factors that explain why some countries are richer or more prosperous than others. A country’s infrastructure has a clear impact on trade as it both enables internal transportation and provides access to global markets,” says Roberto Crotti at the World Economic Forum’s Centre for the New Economy and Society.

He goes on to point out that a well-developed and well-functioning infrastructure also impacts on the health and education of people, which in turn plays into the overall competitiveness of a country. Roberto Crotti is one of the lead economists responsible for the organisation’s Global Competitiveness Report that scores 140 economies in the world according to their competitiveness based on twelve pillars, one of which is infrastructure. The latest edition was published in October 2018.

“We look at transportation via road, rail, water and air, but also utility infrastructure, and we use both qualitative and quantitative indicators for our assessment. These are scored using a scale from 0 to 100, indicating how close an economy is to the ideal state of competitiveness”, he explains.

The World Economic Forum’s Global Competitiveness Report assesses the competitive landscape of 140 economies and ranks them according to scores for 98 different indicators organised into twelve pillars, identified as the main drivers of productivity.

The organisation is keen to point out that “competitiveness is neither a competition nor a zero-sum game”, meaning all countries can become more prosperous.

The annual report is based on hard data, from institutions such as the World Bank, and the World Economic Forum’s annual Executive Opinion Survey, involving more than 15,000 respondents sampled to mimic a country’s economic structure in terms of type of industry and company size.

weforum.org
The quality of the road infrastructure is scored using the responses to survey questions from executives, sampled to mimic the economic structure of each economy.

The quantitative road connectivity indicator is based on the average speed and straightness of a driving itinerary connecting ten or more of the largest cities. Together, these cities should account for at least 15 % of the economy’s overall population.

“In Europe and other industrialised economies, the road network is quite well developed, so for quantity, roads score on average 81 (of maximum 100). However, the average score for quality is lower, only 68.5,” says Roberto Crotti.

“This clearly indicates that there is room for improvement of the road infrastructure in Europe, and this is particularly true for the upgrading and maintenance of the road network as roads persistently score lower for quality than for quantity.”

In the 2018 Global Competitiveness Report, Singapore achieved the overall highest score for road infrastructure, mainly due to outstanding quality. Number-two-scoring United States, on the other hand, did so thanks to its superior road connectivity.

“Spain and France, ranked three and four for overall road infrastructure, have invested heavily in upgrading their road networks in recent years, which has resulted in substantial improvements. They are the examples for others to follow in this area,” says Roberto Crotti.

Four other European countries made the top ten list for road infrastructure – Portugal (6th), Sweden (7th), Netherlands (9th), and Germany (10th).

“Even so, there is still plenty of room for improvement,” states Roberto Crotti.

However, the importance of making such improvements compared with other efforts aimed at strengthening competitiveness through an “enabling environment” is not covered by the report.

“There is significant evidence in economic literature of the link between infrastructure and competitiveness. However, it is not so straightforward to determine how important it is compared with other factors, or to attribute relative weight to the various types of infrastructure. There is no clear guidance for such weighting, so it is not something we try to do,” explains Roberto Crotti.

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