What is Competitiveness?

Recently, competitiveness has been defined in various ways, resulting in numerous studies and reports. While there is no single universally agreed-upon definition of competitiveness, it can be simply understood as “how a region (country, province, or district) manages and utilizes its resources and competencies to improve the well-being of its citizens” (IMD World Competitiveness Center).

Other Definitions of Competitiveness

Competitiveness research is a very broad discipline that contributes to economic theory by integrating the influence of “non-economic” factors when defining and measuring the competitiveness of countries or regions. In other words, studies defining competitiveness at various levels (national, provincial, district, etc.) enable a comprehensive assessment of a region’s development level using both economic and non-economic indicators. Rather than just analyzing superiority over others, competitiveness research examines how effectively a country or region utilizes its resources, builds its own competitive capacity, and manages to establish a favorable environment for living and doing business.

How Do We Measure Competitiveness?

Around the world, most nations and regions measure their competitiveness in some way and implement policies to improve it. Annually, two organizations publish reports defining the competitiveness of global nations. Since 2004, the World Economic Forum (WEF) has measured the competitiveness of 140 countries using 98 indicators grouped into 12 pillars, developing the “Global Competitiveness Index”. Meanwhile, the IMD World Competitiveness Center has been publishing the “World Competitiveness Yearbook” since 1988, currently measuring the competitiveness of 63 nations through 261 indicators divided into 4 main pillars.

Since its establishment, the EPCRC has collaborated with the World Competitiveness Center, utilizing similar methodologies to evaluate competitiveness. Currently, the EPCRC compiles and submits Mongolia’s data for the World Competitiveness Yearbook, while independently preparing and publishing the Provincial Competitiveness Report and the District Competitiveness Report.

How Competitive are Mongolia, its Districts, and Provinces?

Mongolia in the World:

Based on the results of the World Competitiveness Yearbook 2021, Mongolia ranked 60th out of 64 selected, comparable economies. Although the competitiveness ranking showed some progress, its overall score fell to 40.045 compared to the highest competitiveness, indicating a decline in competitiveness. Furthermore, Mongolia remains less competitive within the Asia-Pacific region.

District Competitiveness:

The competitiveness index for Ulaanbaatar city and each of its 9 districts is calculated according to the district competitiveness criteria. The district competitiveness index ranges from 0 to 1, where values closer to 0 indicate weaker competitiveness and values closer to 1 signify stronger competitiveness.

According to the results of this study, the overall competitiveness index of Ulaanbaatar city was scored at 0.545. Khan-Uul, Bayanzurkh, and Bayangol districts lead the competitiveness scores, while Bagakhangai, Nalaikh, and Songinokhairkhan districts have weaker competitiveness compared to the others. The competitiveness of Chingeltei, Sukhbaatar, and Baganuur districts is evaluated at an average level compared to the other districts. For more detailed information, click here.

Provincial Competitiveness:

Orkhon, Dornogovi, Darkhan-Uul, Umnugovi, and Govisumber provinces led the overall competitiveness scores. In terms of notable changes, Orkhon province, which led the overall competitiveness assessment from 2012 to 2020 (the first 9 years of the report), ranked 1st again, while Dornogovi province, which led the reports in the past two years, fell back one rank to 2nd place. The rankings of Darkhan-Uul, Umnugovi, and Govisumber provinces remained unchanged. On the other hand, Dundgovi and Zavkhan provinces ranked last once again. (United Nations Development Programme, Human Development Index study)

In the four main pillars measuring competitiveness, Dornogovi province ranked 1st in Economic Performance, Darkhan-Uul province led in Business Efficiency, and Orkhon province topped both Government Efficiency and Infrastructure. Please visit aimagindex.mn for more details.