How Prepared is Your Country to Withstand and Respond to Change?

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. KPMG’s analysis of 90 countries finds that wealth alone doesn’t predict a country’s readiness for inevitable shocks and long-term change.

The study 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 Change Readiness Index

Top 20 CRI Rankings

  1. Singapore
  2. Sweden
  3. Qatar
  4. New Zealand
  5. Germany
  6. Israel
  7. Japan
  8. Saudi Arabia
  9. Australia
  10. United Kingdrom
  11. Chile
  12. United States
  13. Taiwan
  14. South Korea
  15. France
  16. Thailand
  17. Lithuania
  18. Philippines
  19. Panama
  20. Kazakhstan

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.

“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.”

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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