By Paula L Green
It doesn’t seem to matter how rich a country may be. Or the number of people residing within its borders. Even the landmass of a nation or its geographic locale can’t predict a country’s ability to manage change—whether in the form of an earthquake or global competition—while keeping its economy stable and its citizens happy.
Perhaps surprisingly, neither China nor India made the top 20 rankings in the 2013 Change Readiness Index, produced by KPMG International and Oxford Economics. Tiny but wealthy Singapore topped the list, yet China and India—two economic powerhouses, each fueled by the talents and labor of more than a billion people—did not. European Union member Sweden captured the index’s second-place slot, while Persian Gulf nation Qatar holds seat number three. Ranked at 11, Chile pulled just ahead of the United States, while tiny Lithuania in the Baltic region ranked 17 and Kazakhstan, 20th.
“Being a resource-rich nation is not necessarily indicative of an ability to cope with change,” says Timothy Stiles, global head of KPMG International Development Assistance Services, who is based in New York. “The BRICS [Brazil, Russia, India, China and South Africa] did much lower than expected. Even access to human resources and cheap labor does not mean a country can adapt to change.” The analysis shows that those countries that rank highest not only anticipate change, such as the short-term negative shock of a natural disaster, but also take advantage of longer-term changes. These might be advances in technology or new markets for new products.
This year’s 2013 Change Readiness Index ranks 90 countries by using more than two dozen components to compare them across three areas: enterprise capability, or the business environment; government capability; and its people and civil society capabilities. By laying out how countries around the globe stack up in terms of their flexibility, the analysis gives investors and executives at multinationals another tool to use when deciding where to sink their capital and resources. Stiles says the analysis is unique because it incorporates findings gleaned from more than 500 interviews with experts around the globe, as well as data culled from several global organizations.
This year’s index was expanded to include 90 countries, up from 60 in 2012, as well as such developed markets as Australia, Singapore, the UK and the US.