Doing Global CI Rankings (part 1)Posted: October 31, 2014
October 31, 2014
Last week, I posted a work in progress, taking a first cut at determining how likely it is that you can get reliable CI in a country with which you are not familiar. Since that time, I have had several discussions with Arthur Weiss, a long-time friend and business associate from AW Marketing (AWARE) Ltd.
I am going to start incorporating some of our discussions in an effort to develop a more refined index. In my first cut, I gave all indices equal weight. That is not the case now with this version (2.0).
- How comfortable a business environment is there in any particular country? I would expect that the ease of doing business would correlate to some degree with the ease of collecting intelligence on those entities doing business. A resource here is the World Bank’s Doing Business Rankings. However, to be fair, this particular index includes a lot of measures not related to getting good CI, such as getting electricity and getting credit. So, in fairness, I think that this item’s weight should be downgraded, so I am doing it.
- Arthur has suggested several additional metrics. One of particular interest is Hofstede’s Power Distance Index which measures the extent to which the less powerful members of organizations and institutions accept and expect that power is distributed unequally. For CI, this can translate into the fact that junior staff may be less knowledgeable about aspects of their own business which similar staff in a lower Power Distance Index culture would take for granted. If they do now know it, they cannot share it.
- How easy is it to get information from the public sector about the public sector, such as ownership of businesses, spending, regulations etc., as well as about the private sector, such as private sector filings? We are using the Global Open Data index. This should probably have a little more than average weight since it deals with transparency, a critical aspect of CI.
- Finally, how corrupt is the public sector? In many countries, parts of the economy have direct or indirect ties to the national government. But an environment of corruption makes it difficult to do business, and also to develop actionable CI about businesses, whether or not government-owned. For information on this look to the Corruption Perceptions Index.
So what do we find? Let’s compare the US, the UK, China, Brazil, and India plus add South Korea and Germany in a working chart:
|Country/ Index Ranking||Ease of Doing Business Rank (World Bank)||Open Data Rank (Global Open Government Index)||Corruption Perceptions Rank (Corruption Perceptions Index)||Power Distance Index Score (of 120) (Hofstede)||Overall Composite Ranking (Percentile)|
Does this comport with your knowledge/expectation? That is, the UK is in the top 10% of jurisdictions for developing CI, followed by the US and Germany in the next 10%, with South Korea below them in the third percentile, and India, China and Brazil well below that, barely in the top half of nations.
Arthur and I will continue to work on this, but we welcome your comments.