Sustainable Development and Competitiveness: Is There a Need for GCI Reconstruction?

Abstract

Starting from competitiveness as the ability of an entity (company, sector, state) to successfully increase sales on the domestic and/or international market, and through a balance surplus to create growing revenues for its company and/or residents, i.e. the entire country, the concept of competitiveness should be transformed according to today’s business conditions. Competitiveness was initially related to cost, and sales grew due to lower product prices, and later due to productivity and better product quality. Today’s consumer is not only interested in price and quality, but also in environmental sustainability and social responsibility, and customers are looking for sustainable products. This paper investigates the relationship between the Global Competitiveness Index (GCI) and the Sustainable Development Goals (SDG) index on a sample of 27 member states of the European Union in the period 2007-2017, with the main goal and purpose of determining the direction and strength of the relationship and creating a platform for the necessity of redesigning the GCI. The impact of climate change on the GCI was examined by the Sustainable Development Index. For this purpose, Difference GMM was used. The results show that SDG12 (waste generation) hurts competitiveness, while SDG14 (maritime, ocean conservation) has a positive impact on competitiveness. This study contributes to the ongoing discourse on the intersection of competitiveness and sustainability, providing a foundation for future discussions and potential reconstructions of indices that reflect the changing global environment.