Local Competitiveness Index: A proposal by FUNDESA to promote Guatemala’s competitiveness

Pulso Capital, issued July 19, 2022

The degree of openness of the economy of nations and the advent of globalization have motivated consulting firms and research institutions to focus on the analysis of competitiveness as an indicator of economic development.

In this sense, the Foundation for the Development of Guatemala (FUNDESA), a private non-profit organization that works to contribute to the integral development of Guatemala, is the organization that sets the trend in the analysis thanks to the implementation of the Local Competitiveness Index (ICL).

FUNDESA, whose Director and member of the Board of Trustees 2020-2022 is businessman Felipe Antonio Bosch Gutiérrez, has stood out under his leadership for being an organization that envisions and structures projects and alliances in the area of sustainable economic development, through a structure that reconciles innovation with management capacity.

The LCI emerges as an initiative that seeks to generate a better standard of living for Guatemalans, through the evaluation of the key factors that contribute towards generating development in other territories beyond the metropolitan area. Its main objective is to point out investment opportunities in those productive clusters capable of generating new jobs in the country.

The index also draws on data provided by the collaboration of local and national authorities, with the common goal of guiding national public policy at the territorial level towards development planning that is based on measurable evidence.

What is the LCI and what indicators does it analyze?

The Local Competitiveness Index is a tool that enables the comparative evaluation of competitiveness in the country at the sub-national level, providing information about the existing gaps in 12 pillars that directly contribute to increase productivity at the territorial level:

1. Institutions
2. Infrastructure
3. Adoption of ICTs
4. Economic Environment
5. Health
6. Workforce and Talent
7. Productive Investment
8. Labor Market
9. Financial System
10. Market Size
11. Business Dynamism
12. Capacity and Innovation

Although this grouping is not necessarily done by related areas, it is understood that adding these pillars is an excellent way to measure competitiveness, and that using them provides more representative data for each area, under a logic that is based on the concepts of analysis of what makes gaps close. Thanks to this FUNDESA tool, better explanations can be drawn about the competitiveness of the different regions of the country.

Competitiveness, therefore, may be linked to cultural factors, government incentives, exchange rates, natural resources, level of education, innovation, technology, or other factors. Regardless, competitiveness analysis is valuable for decision-makers or investors seeking to recognize the geographic areas that can provide the best investment results, depending on the prevailing macroeconomic scenario.