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Romania’s competitiveness in 2017: Contribution of business environment to a 6-position decline in ranking

de Victor Bratu , 30.10.2017

The World Economic Forum has published a new Global Competitiveness Report, where Romania ranks 68th among the 138 countries that have been subject of the research.

Compared to the previous report, Romania went down 6 positions in the Global Competitiveness Index but still maintained an identical score as in 2016 (4.28 out of maximum 7).

Romania’s score from the World Economic Forum’s research is roughly the same as in 2014, meaning that the fluctuations in the ranking over the last few years are directly related to what is changing in other states and how and not the national economic and administrative performance.

Romania has Georgia and Islamic Republic of Iran rankings

Romania’s major problems are the same, known and largely attributable to the state: bureaucracy, poor infrastructure, difficult access to financing, incoherent tax system, etc.

“Contribution” of business environment to Romania’s competitiveness decrease

Read carefully, the indices included in Romania’s economic profile show that even the business environment has important issues. Some relevant figures:

  • Capacity of talent retention – position 132/137
  • Capacity to attract talent – position 131/137
  • Willingness to delegate authority – position 129/137
  • Staff preparedness level – position 123/137
  • Quality of local suppliers – position 122/137
  • R&D expenses of companies – position 110/137
  • Innovation capability of companies – position 109/137
  • Ethical behaviour of companies – position 100/137
  • Companies’ capacity to assimilate new technologies – position 95/137
  • Degree of sophistication of production processes – position 94/137

In short, too many authoritarian entrepreneurs are active in the business environment, who are not willing to delegate tasks, are not forward-looking from all points of view: workforce, technology, market trends.

Structural problems and Romania’s performance in the region

According to the World Economic Forum research, the main factors that hinder business development in Romania are:

  • tax level
  • bureaucracy
  • access to financing
  • educated workforce inadequacy 
  • corruption
  • quality of infrastructure

From the regional perspective, Romania does best in the following areas: macroeconomic environment, market size and technological readiness, where the Internet speed has a substantial contribution to the good score obtained in this chapter.

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