Which Businesses are Best Prepared for Disruptive Changes
The 2017 Change Readiness Index (CRI), was released today, ranking 136 countries for their capacity to respond and adapt to significant change, resulting from short-term events, such as natural disasters, and longer-term demographic, economic, social and technological trends.
The CRI provides deep insights into where countries can focus and invest in order to be prepared for the increasing pace of change worldwide—breaking down each country’s capacity across three key “pillars” of capability: enterprise, government and people & civil society.
“More than ever, the welfare of a country’s citizens depends on the ability to cope with and take advantage of change,” says Timothy Stiles, Global Chair of the International Development Assistance Services (IDAS) practice at KPMG. “The CRI offers an eye-opening view of which countries are best positioned to weather and potentially benefit from inevitable change, and the factors behind their preparedness.”
Europe dominates top 10, US steps up its change readiness
European countries captured seven of the top 10 places in the 2017 CRI, demonstrating strong capacity to handle the region’s challenges.
Switzerland took the number-one ranking for the first time, replacing Singapore, which had claimed the top ranking in the 2013 and 2015 CRIs.
The UK entered the top 10 for the first time, strengthening its change readiness at an especially critical time as the country prepares for Brexit.
The US also significantly improved its ranking since the previous CRI, rising eight places to 12th from 20th in 2015.
The highest-ranked countries (with change in ranking from 2015):
- Switzerland (+1)
- Sweden (+7)
- United Arab Emirates (+2)
- Singapore (-3)
- Denmark (+3)
- New Zealand (+0)
- Netherlands (+4)
- Finland (+2)
- Germany (+3)
- United Kingdom (+3)
- Norway (-7)
- United States (+8)
- Hong Kong (-10)
- Australia (+2)
- Ireland (–)*
- Austria (+1)
- Canada (-3)
- Belgium (+0)
- Qatar (-12)
- France (+6)
*Countries that are new to the 2015 CRI
Additional resources, along with interactive country profiles that allow comparisons between countries, regions and income levels, are available online at kpmg.com/changereadiness.
Why some countries are more change ready than others
Focusing on GDP or business outputs alone is not the answer to a country becoming more change ready. The CRI shows that improving capabilities in areas of government and people & civil society, as well as in enterprise, or business environment, are often key to why some countries are able to climb up the rankings. No single factor underlies change readiness.
In 2017, every top-ten country, with the exception of Singapore, increased its government and people & civil society capability scores over 2015. Just four of the top 20 ranked countries saw a decline in people & civil society scores, whereas 25 of the bottom 30 countries in the rankings declined in this capability.
Rwanda proves lower-income countries can strengthen change readiness
High-income countries are generally better positioned to respond to change, but Rwanda demonstrates that lower-income countries can significantly improve their change readiness. Rwanda rose to 46 in the 2017 rankings, making it the only low-income country in the top 50. Rwanda benefited from strong performance in government capability, where it ranked 21st.
“Rwanda’s progress can offer lessons for other countries as to how strengthening fundamental institutions and achieving political stability can lay the foundation for much greater change readiness,” according to Trevor Davies, Global Head of the IDAS Institute at KPMG.
The impact of change readiness on migration
Migration is a significant driver of change for many countries. Those that are most change ready have a better capacity to meet the challenges and potentially benefit from increasing migration. It is not a coincidence that countries with high CRI scores–including Sweden, Germany, the Netherlands and the UK–have greater shares of migrant population.
“These countries have the combination of social services, safety nets, education and economic opportunity needed to host and integrate migrant populations,” says Timothy Stiles. “Ultimately, they have the potential to use migration to their advantage in growing their economies and providing a net gain to society.”
Learn more about the CRI and how each country performed by accessing the comprehensive online tool at kpmg.com/changereadiness.
About the Change Readiness Index
The Change Readiness Index (CRI) (view the online tool) covers 136 countries. The CRI is structured around three pillars (Enterprise capability, Government capability, People & Civil Society capability), that signify a country’s underlying ability to manage change. The CRI is built on extensive research and analysis, from primary source data and from nearly 1,400 experts and secondary sources ranging including from the World Economic Forum, World Bank International Monetary Fund and United Nations.
About KPMG’s International Development Assistance Services (IDAS) practice
KPMG’s IDAS professionals are among the most experienced providers of services to the public and development sectors in countries and regions where economies and finances are emerging. With local expertise worldwide, KPMG IDAS professionals work closely with emerging market stakeholders – government, civil society and private sector – to create sustainable change and effective, accountable service delivery. KPMG’s IDAS practice encompasses services in four major areas: Enhancing Impact, Ensuring Value-for-Money, Driving Accountability, and Advancing Service Delivery. For more information, please visit: www.kpmg.com/idas
About KPMG International
KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 152 countries and have more than 189,000 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.
SOURCE KPMG International
