User:EV ACR/National Competitiveness Report - Armenia (ACR)

The National Competitiveness Report - Armenia (ACR), an annual publication of the Economy and Values Research Center (a partner institute of the World Economic Forum’s Global Competitiveness Network), aims to encourage and foster in-depth dialogue and analysis on improving Armenia's competitiveness.

The ACR provides a detailed assessment of Armenia’s competitiveness position and benchmarks this position against its neighbors in the region. It attempts to take a broad and deep analytical look at Armenia’s international competitiveness standing and the factors influencing it, by using contemporary conceptual frameworks for competitiveness.

The ACR addresses a number of key questions:
- How competitive is Armenia among the world’s nations today? How competitive are Armenia’s business environment and businesses in the international context?
- What are Armenia’s competitive strengths and weaknesses; how can the strengths be further developed and the weaknesses be addressed? - What is behind Armenia’s economic growth rate, and can this growth rate be sustained?
- Can current economic performance patterns ensure progressive development of the nation?
- How can competitiveness best be established, and what should be the top priorities for private-public dialogue over the next few years? What are the roles of the private sector, public sector and civil society in the development process?

EV Research Center is a think-tank focused on studying competitiveness within the key areas of Strategy, Foreign Direct Investment, Diaspora Networks and Values. EV is a partner institute of the World Economic Forum’s Global Competitiveness Network.

The first ACR was published in 2008; the preface for the report was written by Armenia’s Minister of Economy, Nerses Yeritsyan, and Harvard University Professor, Michael E. Porter, a leading authority on competitive strategy and international competitiveness. In his introductory note, M. Porter stated that “The first National Competitiveness Report of Armenia is a strong sign that Armenia is getting serious about competitiveness and about developing a true strategy for economic development”.

The ACR publication is given a high importance by local high level authorities from public and private sectors. In his speech at the launch of ACR 2009 Armenia’s Prime Minister Tigran Sargsyan stated that the publication is a high quality independent research meant to serve as a tool for public policy-making. He also mentioned: “I hope our collaboration with Economy and Values Research Center as an opponent will go further”.

National Competitiveness Report of Armenia 2008

The first Armenian competitiveness report Based on the modern conceptual competitiveness frameworks, the report analyses and describes Armenia's economic situation which is characterized as a “growth-competitiveness paradox” in ACR 2008. The paradox is reflected in the high rates of growth on most macro-economic metrics, but low and lagging competitiveness. In the Global Competitiveness Report 2007-2008, produced by the World Economic Forum, Armenia ranked 93rd out of 131 countries in the Global Competitiveness Index (GCI) and 108th out of 127 countries in Business Competitiveness Index (BCI). Alongside to the thorough analysis of the performance of competitiveness factors in Armenia, ACR 2008 addresses and gives recommendations on the public policy. According to the report Armenia has yet to adopt a development-driven policy context. It describes the evolution of Armenia's public policies as a transition from “survival context” in early 90s to “redistribution context” in late 90s and finally to “social or poverty reduction” context starting from early 2000s up until the publication date. ACR proposes that in the next stage an economic development-focused strategy should address such issues as Armenia’s global value proposition, key drivers of competitiveness, sectoral preferences, etc. It distinguishes two layers of action labeled as “Strategic Breakthrough” and “Quick Wins”. The Quick Wins are targets that are achievable in a short time period, while actions in the Strategic Breakthrough sections define factors that may move Armenia to the next level of competitive position vis-à-vis other countries and direct competitors. ACR 2008 concludes that Armenia still has a long way to go to create a highly competitive economy. The next stage requires more focused efforts, greater skills, higher aspirations and visionary leadership.

National Competitiveness Report of Armenia 2009: Sowing the Seeds of an Innovation Ecosystem The second Armenian competitiveness report, focused on the study of the country’s innovation performance. Based on the World Economic Forum’s competitiveness rankings ACR 2009 states that the fall in Armenia's international competitiveness came to a halt in 2009: Armenia ranks 97th out of 133 countries, registering no change compared to the 2008 ranking. The continuous decline in competitiveness ranking during the previous years pointed out the non-sustainable nature of economic growth drivers, which were expected to become apparent under negative external shocks, such as global economic crisis. ACR 2009 monitors the influence of the crisis on the Armenian economy through the effects on foreign remittances (a strong Armenia-specific factor), the foreign exchange market, inflation, public finance, and perceived risk as measured by ratings of international rating agencies. The core theme of ACR 2009 is innovation. The importance of innovation for the Armenian economy is especially apparent in the current development stage. In the context of competitiveness, Armenia has moved toward a new development stage, where the role of the competitiveness drivers is changed. The role of performance of macroeconomic indicators, institutions and basic infrastructure is more significant for countries in the first stage of development. Currently, economic efficiency and innovation capacities assume a growing importance for Armenia. Innovation is critical to the creation of a knowledge-based economy which in turn is vital to a country like Armenia that is landlocked, has scarce natural resources and faces high transportation costs. A framework based on National Innovation System concept (developed by OCED) has been employed and adopted in this report for assessing Armenia’s performance in innovation. It provides holistic picture by looking at innovation process as combination of different elements of innovation system: inputs, outputs, policy framework, institutions, actors and the interactions among these actors. The report argues that in order to foster innovation, particularly in production of goods and services, Armenia would do well to devise and implement a national innovation system. This will require a holistic approach in developing a long-term vision. The path a country takes is based on leverage points that policymakers can use to enhance innovation performance and overall competitiveness. ACR 2009 considers the demand source that triggers innovation activities to be the key leverage point. On the basis of generating demand or creating a lead market, the ACR distinguishes four kick-off or jumpstart strategic trajectories by the relative importance of policy focuses and actors. The report thoroughly describes the specifics of each strategy – Domestic Corporate-Led Strategy, MNC-Led or R&D Hub Strategy, Government-Led Strategy, Generic or Environment-Enabled Strategy, defines criteria for choosing a strategy for Armenia and the next steps of policy implementation. Each strategy description is complemented with success stories of the countries where similar strategies for development were employed. Armenian Competitiveness Report has a significant and growing publicity in Armenia. The launch of ACR 2009 was addressed by the Prime Minister, the Minister of Economy and other high level state officials, representatives of business and international organizations.

National Competitiveness Report of Armenia 2009: Sowing the Seeds of an Innovation Ecosystem

The second Armenian competitiveness report, focused on the study of the country’s innovation performance. Based on the World Economic Forum’s competitiveness rankings ACR 2009 states that the fall in Armenia's international competitiveness came to a halt in 2009: Armenia ranks 97th out of 133 countries, registering no change compared to the 2008 ranking. The continuous decline in competitiveness ranking during the previous years pointed out the non-sustainable nature of economic growth drivers, which were expected to become apparent under negative external shocks, such as global economic crisis. ACR 2009 monitors the influence of the crisis on the Armenian economy through the effects on foreign remittances (a strong Armenia-specific factor), the foreign exchange market, inflation, public finance, and perceived risk as measured by ratings of international rating agencies. The core theme of ACR 2009 is innovation. The importance of innovation for the Armenian economy is especially apparent in the current development stage. In the context of competitiveness, Armenia has moved toward a new development stage, where the role of the competitiveness drivers is changed. The role of performance of macroeconomic indicators, institutions and basic infrastructure is more significant for countries in the first stage of development. Currently, economic efficiency and innovation capacities assume a growing importance for Armenia. Innovation is critical to the creation of a knowledge-based economy which in turn is vital to a country like Armenia that is landlocked, has scarce natural resources and faces high transportation costs. A framework based on National Innovation System concept (developed by OCED) has been employed and adopted in this report for assessing Armenia’s performance in innovation. It provides holistic picture by looking at innovation process as combination of different elements of innovation system: inputs, outputs, policy framework, institutions, actors and the interactions among these actors. The report argues that in order to foster innovation, particularly in production of goods and services, Armenia would do well to devise and implement a national innovation system. This will require a holistic approach in developing a long-term vision. The path a country takes is based on leverage points that policymakers can use to enhance innovation performance and overall competitiveness. ACR 2009 considers the demand source that triggers innovation activities to be the key leverage point. On the basis of generating demand or creating a lead market, the ACR distinguishes four kick-off or jumpstart strategic trajectories by the relative importance of policy focuses and actors. The report thoroughly describes the specifics of each strategy – Domestic Corporate-Led Strategy, MNC-Led or R&D Hub Strategy, Government-Led Strategy, Generic or Environment-Enabled Strategy, defines criteria for choosing a strategy for Armenia and the next steps of policy implementation. Each strategy description is complemented with success stories of the countries where similar strategies for development were employed. Armenian Competitiveness Report has a significant and growing publicity in Armenia. The launch of ACR 2009 was addressed by the Prime Minister, the Minister of Economy and other high level state officials, representatives of business and international organizations.

External links

• [Economy and Values Research Center http://www.ev.am]
• [Government of Armenia http://www.gov.am/en/news/item/4867/]
• [State Committee of Science of RA http://www.scs.am/lrtv_body_1.php?id=85]
• [USAID CAPS Project http://www.caps.am/page.php?page_id=25&out_lang=eng]
• [Hayastany Hanrapetutyun Daily http://www.hhpress.am/?sub=hodv&hodv=20090917_7&flag=am]
• [CAPITAL DAILY http://www.cdaily.am/home/paper/2009_09_17/news/14473/]