03 September 2023

Global Attractiveness Index 2023: energy transition and sustainability to boost Italy’s attractiveness
The eight edition of the Global Attractiveness Index sees the light in a complex scenario. The wave of inflation that hit the world in 2022, triggering a general and rapid rise in interest rates, has had heavy depressive effects on world growth, especially in the Euro area, with an impact on the attractiveness of countries. 

The 2023 GAI maps 146 economies in the world (excluding Russia and Ukraine, due to the unavailability of reliable data), with over 1 million data points collected, and measures how the "geography of attractiveness" changes as each country’s speed changes compared to others, not only on its own. In this sense, the GAI is a relative index, as it compares each economy with the best performer (in 2023, it was Germany), taking into account four macro-areas (openness, innovation, endowment and efficiency), and four complementary sub-indices, focused on measuring sustainability, dynamism, future orientation and exposure to the Russian-Ukrainian conflict.

In a world that is changing so quickly, to reliably measure the attractiveness of countries we need elaborate statistical tools: "Statistical tools of synthesis, such as the GAI, are fundamental to analyse reality on the basis of quantitative, objective data and information, not filtered by the lens of opinion that inevitably distorts facts. A quantitative index, built from databases collected by the most accredited international institutions and according to a rigorous methodology. This methodology is subject to an independent statistical audit conducted by the Joint Research Centre of the European Commission, which annually conducts a methodological review of our work, highlighting its scientific soundness", illustrates Valerio De Molli, Managing Partner and CEO of The European House - Ambrosetti.

The results of the 2023 GAI

In first place is, once again, Germany, with a score of 100, followed by the United States (94.7) and the United Kingdom (92.7). The positioning of Italy improves significantly, recording the largest change in the ranking of the country since the creation of the Index.

Despite the positive change in the ranking, Italy is unable to close the gap with the Benchmark countries, which remains significant. In fact, despite recording a score of 66.3, with an improvement of 4.1 points compared to 2022, there is still a gap of 12.6 points with France and 33.7 with Germany. Not only that: Spain, which is in a lower position than Italy, has significantly improved its score (64.6 in 2023 vs 58.7 in 2022), with a gap of only 1.7 points from Italy. Considering the G7 countries (Canada, France, Germany, Italy, Japan, United States, United Kingdom, United States), Italy is the least attractive country in the group: the average score of the G7 countries is 85.4, with a gap of 19 points compared to the Italian score. More specifically, with reference to the 4 macro areas that make up the positioning index, Italy is 45th in the Opening dimension, 11th for Innovation, 56th for Efficiency and 12th for Equipment.

Only 7 countries rank in the high attractiveness range (equal to 4.8% of the total countries analyzed): Germany, the United States, the United Kingdom, Japan, China, South Korea, and Australia. 17 countries - including Italy - have a good level of attractiveness (11.6% of the total); 74 countries have a medium attractiveness (50.7%); 47 countries a low attractiveness (32.2%). 

Focus: low wage emergency

In the last 30 years, Italy is the only country among the major advanced economies in which average wages at purchasing power parity have even fallen, registering in 2022 lower values of -488 dollars compared to average wages in 1991.

In Italy there is a real wage emergency, which is aggravated by the diversity of the productive districts in the macro-regions of our country. The people employed in the foreign (13%) and Italian (12%) multinationals - the kind of companies that pay better - are a quarter of the total workers in the North West, in the South, however, the total share of employed in the multinationals is 10% (4% foreign multinationals, 6% Italian multinationals).

For the making of the 8th edition of the Global Attractiveness Index, through a what-if analysis we calculated the potential benefit - on national GDP and on tax revenue for the State - that can be activated by giving a higher salary to employees in Italy, in line with the one guaranteed by the multinationals.

In this scenario, there would be a growth of +156.2 billion Euros that, net of the tax burden and considering the propensity to save of Italian households, would entail an increase of +5.7% of national consumption, with an increase in national GDP of +4,5%, that is to say additional 75 billion Euro.

Focus: sustainability

Sustainability aspects are becoming increasingly central to the GAI. The specific sub-index notes that the Italian performance, although positive in the international comparison, is not sufficient when compared with the main European countries. Compared to the average of France, Germany and Spain, Italy is in fact 10 positions below in the overall sustainability index (-2.8 score points), 6 positions below in the resilience pillar (-3.8 score points), 14 positions below in the vulnerability pillar (-1.9 score points) and 11 positions below in the ecological transition pillar (-1.7 score points). 

Some environmental KPIs show a dramatic picture: in Italy, the number of deaths related to pollution are equal to 407.8 people, against 324.3 in Germany, 203.4 in France and 190.0 in Spain. A better performance in sustainability is necessary to trigger a virtuous circle that improves the attractiveness of a country: in the short term, a marked correlation between the score in the UN Sustainable Development Goals and the GAI Positioning Index is unavoidable.