Depending on the concerns of time, definition of development has taken various forms - economic development, environmental friendly development, inclusive growth, sustainable development etc. After economic recession experienced worldwide and slow economic growth becoming a norm (Schwab et al. 2015), many countries around the world are preparing policies to enhance national competitiveness. Competitiveness relates to productivity of an economy and factors of production at national level – infrastructure, labour, institutions, R & D etc. This concept, though to target slow economic growth, lacks a sustainable approach. Sustainable development, which concerns the social and environmental factors, has been part of the ongoing development debate since publication of the Brundtland Commission report – Our Common Future in 1987 and proposal of Sustainable Development Goals, more recently. Concept of sustainable competitiveness combines the concept of sustainable development with that of national competitiveness. Countries, must thus, strive to be competitive but not at the cost of environment or society. A new addition to the development debate relates to well-being, which has been accepted by philosophers as well as some academicians as the ultimate goal in life. Till now, very few countries apart from Bhutan have actually implemented policies for improving people’s wellbeing. Few authors like Kerekes (1995), Aiginger (2006) and Huggins and Thompson (2012) have linked happiness level in a country to its competitiveness level. While some other like Zidansek (2007), have proved a link between sustainable development and happiness. Thus to achieve well-being centric progress, countries can propose competitiveness or sustainable development policies. This study tries to address three prominent issues - slow economic growth, sustainable development and lack of well-being centric approaches by establishing a link between sustainable competitiveness and happiness. This can give a more holistic and comprehensive way to measure progress and define our development path. This study aims to understand the links between competitiveness and happiness and sustainable competitiveness and happiness. In addition to presence of a link, this study tries to explain variations in the relationship by geographical regions and income level of countries, and identify the factors of sustainability, which influence either positively or negatively the level of happiness at a country level. This study makes use of three main data – Global Competitiveness Index (GCI) scores (to measure competitiveness), Sustainability adjusted-Global Competitiveness Index (SGCI) scores (to measure sustainable competitiveness) and Cantril ladder (to measure self-reported level of happiness). The research uses panel data for years 2012 and 2014 in Random effects and Fixed effects regression to understand change in happiness scores influenced by change in GCI and SGCI scores. Results of regression show a significant and positive relationship between competitiveness and happiness and also sustainable competitiveness and happiness. The most significant components of competitiveness for happiness are infrastructure and health and primary education. When compared, variation in competitiveness scores could explain variation in happiness score better than sustainable competitiveness scores. Similar pattern was observed when geographical regions and classification of countries by income was included in the model. A major underlying reason for this was level of GDP. It was concluded that to be happier, countries need to focus on being competitive and sustainable but also earn higher GDP so as to invest in enhancing the competiveness as well as sustainability at country level. This finds support in (Lapinskiene 2011), who marks growth in GDP as a prerequisite to sustainable development. However, importance of GDP is short-term and mainly for countries in transition (Hagerty and Veenhoven 2003; Clark and Senik 2011). Among the components of sustainability, most significant for happiness at country level were found to be inclusive growth and good governance. In the past, the approach to development has been lop-sided towards economic growth, but with results from this research, it is proved that sustainable competitiveness can actually lead to happiness at country level. Policy makers should most importantly focus improving infrastructure, health and primary education, inclusive growth and good governance as these lead to improved level of sustainable competitiveness as well as happiness. Improvement of financial markets as well as R & D sector is important and should now be part of development policy. Governments which aim to achieve this holistic development approach, relating to economic growth, sustainability and well-being, should invest more in strengthening the society and basic infrastructure. Technology and innovation should be encouraged, not only for improving competitiveness but also happiness.

, , , , ,
Pertiwi Ginting, N. (Natalia)
Institute for Housing and Urban Development Studies

Dwivedi, T. (Tanya). (2016, September). Sustainable competitiveness and happiness at global level. Retrieved from