A new study by KPMG International brings fresh insight to the capacity of countries to respond to change, caused by shocks such as natural disasters or longer-term trends like technology, demographics, global competition, and investment.
KPMG's 2013 Change Readiness Index (CRI), produced in partnership with Oxford Economics, ranks 90 countries, measuring them across 26 components to compare capabilities in the areas of enterprise (business environment), government, and people and civil society (social and human capital). The study is unprecedented in its scope and unique in its consideration of change readiness.
The countries ranked highest in the CRI reflect a diversity of locations and size, while sharing many of the same qualities essential to change readiness: dynamic business environment, stable and effective governments, skilled populations, and strong civil societies.
See additional resources, along with interactive country profiles that allow comparisons between countries, regions and income level.
"A nation's ability to respond to change is increasingly important to its success in building a sustainable economy and equitable society," said Timothy A.A. Stiles, KPMG's Global Chair of International Development Assistance Services and a partner with KPMG in the U.S. "The CRI can be a vital tool for governments, the development community, and business to make more informed decisions, whether on potential reforms or policy changes, managing risks, or making investments."
KPMG International is presenting the findings of the 2013 Change Readiness Index, including the rankings of the 90 countries, at an invitation-only event in New York today. KPMG has also built an online tool that provides a closer look at the 2013 Change Readiness Index.
The launch of the 2013 Change Readiness Index is particularly timely, as it coincides with this week's opening of the 68th United Nations General Assembly.
2013 Rankings Reveal Disparities.
Among the key findings, the CRI revealed that a country's wealth is not always a determining indicator of its ability to respond to and manage change, with a number of lower income countries ranked as having greater change readiness capability than some more "developed" countries. For example, Chile, categorized as an upper-middle income country, ranked as high or higher in the index than many high income countries, including the United States and France.
Several lower-middle income countries, including Panama and the Philippines, outperformed some higher-income countries in the rankings, placing above Italy, Poland, Brazil and China.
"Wealth and high per capita income are closely correlated with change readiness, but income is not an insurmountable barrier to enhanced economic and social resilience," said KPMG's Stiles. "This is an encouraging message for lower income countries, where strong institutions and governance can provide stability in time of stress and potentially open the door to new opportunity."
The Index also supports a finding that change readiness can be maintained, and perhaps even strengthened in the face of short-term shocks, such as natural disaster. Japan notably ranked seventh in the CRI, showing particular strength in its enterprise capability.
Scope of the 2013 Change Readiness Index
The 2013 Change Readiness Index expands the scope of KPMG's 2012 Index to include developed countries, includes input from more than 500 interviews with experts worldwide from a range of backgrounds and more than 70 secondary data variables, including from sources like the World Economic Forum, World Bank, Economist Intelligence Unit, World Health Organization, and UNESCO.
"The range of content, volume of personal interviews, and depth and breadth of data sourced for this survey has been endorsed by an expert panel and has greatly enhanced the value of the CRI," said Adrian Cooper, CEO of Oxford Economics. "The CRI provides an excellent foundation for continuing analysis and greater dialogue around the topic of change readiness."
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About the Research
The Change Readiness Index covers 90 countries including the original 60 covered in the 2012 CRI plus a combination of additional developed and developing nations. The expanded selection of countries provides greater opportunity for comparison across regions and income levels. Countries included in the CRI were selected based on KPMG's and Oxford's ability to obtain sufficient or comparable primary and secondary data; a factor that has had a particular impact on the ability to include more low-income countries in this CRI.
The CRI is structured around three pillars (Enterprise capability, Government capability, People & Civil Society capability), with sub-indices for each pillar, such as infrastructure, fiscal and budgeting, government strategic planning, environment, food and energy security, access to information and health among others.
The composite/overall change readiness score is calculated by weighting standardized pillar scores which are derived from weighted standardized sub-index scores. Sub-index scores are derived from primary survey question responses and secondary data. Researchers at Oxford Economics conducted a survey of more than 500 country experts between February 2013 and April 2013.
About KPMG International
KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 156 countries and have 152,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
About Oxford Economics
Oxford Economics is the world leader in global forecasting and quantitative analysis for business and government, and the most trusted resource for decision-makers seeking independent thinking and evidence-based research. Headquartered in Oxford, England, with regional centres in London, New York, and Singapore, Oxford Economics has offices across the globe in Belfast, Chicago, Dubai, Miami, Milan, Paris, Philadelphia, San Francisco, and Washington DC, and employs over 130 full-time people, including more than 80 professional economists, industry experts and business editors.