The Effect of Competitiveness on Occupational Safety
P. Hämäläinen
Institute of Occupational Safety Engineering, Tampere University of Technology, Tampere, Finland
Abstract - Globalization has changed the
occupational safety situation at country level. Work has a
heavy impact on health, and work-related morbidity and
mortality affect the worker and his or her family and
increase costs for society. The gross domestic product and
the World Economic Forum competitiveness index were
used to explain occupational safety at the regional level. The
proportion of fatal occupational accidents and work-related
diseases differs from region to region. Competitiveness is
highest in the countries where the fatality rate is the lowest.
Changes related to work, work conditions, and work
environment have an effect on productivity, working
climate, safety culture, and workers’ commitment. These are
all factors which effect competitiveness at company as well
as country level.
Keywords - Competitiveness, occupational safety, safety
management
I. INTRODUCTION
According to recent estimates, annually more than 2.3
million people die due to a fatal occupational accident or
work-related disease. This is approximately 7 000 people
per day. Also, more than 960 000 workers a day get hurt
at work. [1]
Occupational accidents and work-related diseases
have been of interest in many countries for over a hundred
years. Mainly industrialized countries have prescribed
different laws and regulations to prevent occupational
accidents and work-related diseases and to protect
workers from them. Especially, these countries have
monitored the occupational accident level. During recent
decades countries and companies have become more and
more interested in occupational accidents and this is at
least partly because of the cost of accidents. Work-related
diseases are an increasing problem of which countries are
just becoming aware. Recent studies show that the
number of work-related diseases seems to have been
underestimated [2, 3, 4, 5, 6].
Work does have a heavy impact on health, and work-
related morbidity and mortality affect not only the worker
and his or her family, but also increase costs for society
[7, 8, 9]. ILO has estimated that the total cost of these
accidents represents 4% of the gross national product
(GNP) [10]. Researchers [11] have estimated that total
costs of work-related injuries and illnesses represent 3%
of the gross domestic product (GDP) in the USA. This
1-4244-1529-2/07/$25.00 ©2007 IEEE
covers both mortality and morbidity costs. The total GNP
of the world was approximately 34 * 1012 USD in 2003
[12], which means that worldwide the annual costs of
work-related injuries and diseases are approximately 1.36
* 1012 USD.
Occupational accidents cause direct and indirect costs
for all of society. There are many variations of the
proportions of these costs, but usually indirect costs are
much greater than direct costs. [13, 14]
A commonly used argument is that poor countries
and companies cannot afford safety and health measures.
There is no evidence that any country or company in the
long run has benefited from a low level of safety and
health. On the contrary, recent studies by ILO
demonstrate that the most competitive countries are also
the safest. Selecting a low-safety, low-health and low-
income survival strategy is not likely to lead to high
competitiveness or sustainability. [15]
This paper presents and discusses from the statistical
point of view how GDP per capita can explain work-
related mortality. Also, the global competitiveness index
(GCI) [16] is used to explain the occupational fatality
rate.
II. METHODOLOGY
An occupational accident is defined as an occurrence
arising out of or in the course of work resulting in fatal or
nonfatal occupational injury [17]. Work-related disease is
a wider concept. It covers diseases that have been shown
to have an association with work, for example: work-
related cancer, musculoskeletal disorders, circulatory
diseases and psycho-social problems [2, 4, 5].
The results of this paper are based on research data
that the Institute of Occupational Safety Engineering at
Tampere University of Technology carried out in
collaboration with the International Labour Organization
during 2001-2006. The research had two parts: 1) the
global estimates of occupational accidents and 2) the
global estimates of work-related diseases.
The data are presented at the regional level using the
World Health Organisation (WHO) division into regions
(Table I). WHO has 6 main regions: Africa (AFRO), the
Americas (AMRO), Eastern Mediterranean (EMRO),
Europe (EURO), South-East Asia (SEARO) and Western
Pacific (WPRO).
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TABLE I
ESTIMATES OF FATAL WORK-RELATED DISEASES AND O CCUPATIONAL ACCIDENTS IN 2003

Accident
causing at
GDP (USD GDP per Fatal Fatality least 4 days' Accident Work-related Disease
Labour force mil.) capita (USD) accident rate absence rate diseases rate
AFRO 264 100 811 474 918 2 178 55 489 21 52 168 676 19 753 360 360 136
AMRO 385 949 154 13 683 513 42 499 39 172 10 36 828 386 9 542 200 839 52
SEARO 724 309 120 1 085 452 2 260 93 436 13 87 845 499 12 128 517 873 71
EURO 405 412 525 12 653 394 33 741 21 565 5 20 274 412 5 001 318 528 79
EMRO 178 379 538 855 611 10 500 22 906 13 21 535 478 12 073 106 134 59
WPRO 958 200 889 7 414 817 29 009 125 381 13 117 880 021 12 302 441 382 46
AFRO=Africa, AMRO=the Americas, EMRO=Eastern Mediterranean, EURO=Europe, SEARO=South-East Asia, WPRO=Western Pacific

SPSS 15.0 was used to make the statistical analyses.
The first analysis is a linear regression in which the
dependent variable is work-related mortality per 100 000
workers (mortality rate) and it is explained with the
independent variable GDP per capita. Work-related
mortality includes fatal occupational accidents and work-
related diseases. The second analysis is also a linear
regression which is used to test the dependency of fatal
occupational accidents per 100 000 workers (fatality rate)
on the GCI. Both mortality rate and fatality rates are
formed using number of labour force. This gives figures
which are too low, but total employment is not available
for many countries and it was decided to use the same
figure for all regions.
The official number of occupational accidents is in
most of the countries lower than real situation. For
example, occupational accident figures are missing in the
case of India and China, and researchers [18] estimated
that in the US the number of occupational injuries is
greatly underreported: between 33% and 69% of all
occupational injuries are missing. In the research
mentioned above, a new model to estimate the number of
occupational accidents was formed. Official figures were
corrected and estimated numbers are higher than official
ones for almost all countries.
GDP per capita is a single factor, but the GCI is a
holistic overview of factors which are critical elements of
productivity and competitiveness [16]. The GCI groups
factors into nine parts: institutions, infrastructure,
macroeconomy, health and primary education, higher
education and training, market efficiency, technological
readiness, business sophistication, and innovation [16].
These parts include a total of 89 variables of which GDP
is one.
The level of occupational safety and health is the sum
of many factors. Different researches [19, 20] show that if
companies put effort into safety training, employees’
participation, proactive measuring, etc., they may achieve
a successful occupational safety and health level. The
problem is that there are quite few indicators to measure
safety and health level. The most used indicator is the
number of occupational accidents or the accident rate.
This number tracks both the national and company level.
At company level this indicator works well.
In this paper the aim is to assess how GDP and
competitiveness can explain mortality and fatality rate. In
other words, the better competitiveness is in companies,
the fewer occupational accidents there are. Data used in
the competitiveness analyses are not presented in this
paper. More detailed information on the research
mentioned above and the data at country level can be
found in several articles [1, 21, 22, 23, 24].
Finally, a one-way analysis of variance was done to
see how the GCI can be explained on a regional basis.
III. RESULTS
The dependency of work-related mortality per
100 000 workers on GDP per capita was analysed. The
analysis was done using the regional mortality rate as the
dependent variable. The result was that GDP per capita
cannot explain work-related mortality. R2 is only 37% and
it is not statistically significant (p=0.197). Analyses could
not continue at country level, because the mortality rate
by country is missing.
However, the dependency of fatal occupational
accidents per 100 000 workers, which is explained by the
GCI, was statistically significant, having the p value
<0.001 and R2 equal to 57% (Fig. 1). The GCI for 125
countries produced by the World Economic Forum was
used. The result of variance shows that the GCI is
dependent on region (F=25.3 and p<0.001).

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Fig. 1. Dependency of fatal occupational accidents per 100 000 workers
on GCI.
Competitiveness and occupational fatality rate were
described using country level graphs by regions. Fig. 2-6
shows that the higher the global competitiveness index is,
the higher is also the fatality rate.
Fig. 2. Competitiveness and occupational fatality rate in Africa.
All countries in Sub-Africa have quite high fatality
rates and they have also the highest GCI. The fatality rates
are almost the same in every country. As reliable
information was obtained from very few countries, most
values are based on rough figures. Countries in Africa,
with some exceptions (e.g. South Africa and Egypt), are
still quite rural in nature. Recent studies [25, 26, 27] also
show that the number of occupational accidents is quite
underestimated and that the real rates are very much
higher.
In the American region, the USA and Canada clearly
have a lower fatality rate and GCI than countries in
Central and Latin America. Fatality rates slightly increase
when the GCI increases. The rates for Central and Latin
America are probably too low. Estimates are based on
figures for a few countries in this region, but the
economic structure and political situation varies inside the
region.
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Fig. 3. Competitiveness and occupational fatality rate in the Americas.
On the whole, competitiveness in Europe at country
level is very strong and fatality rates are quite low. EU
countries obtained the highest ranking compared with
other regions. However, Europe is not a unified region
and competitiveness between countries varies
considerably, as it varies also in other regions.
If only EU-25 countries are considered, in all of them
the fatality rate is under 10, and for most of them under 5.
Competitiveness is high: the first four countries in terms
of degree of competitiveness are EU countries and all 25
EU countries are placed among the 48 most competitivene
countries.
Fig. 4. Competitiveness and occupational fatality rate in Europe.
EMRO countries differ the most. In these countries
prosperity, religion, well-being and the position of women
differ considerably inside the region. Definite figures are
hard to obtain. The Eastern Mediterranean region’s
competitiveness and fatality rates seem to be in step with
each other, except in the case of Qatar, which is in third
place in competitiveness in the EMRO region even if its
fatality rate is clearly higher than in the other countries in
the same region. The size of the labour force was used to
calculate the fatality rate and the figure for this is quite
low in Qatar.
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Fig. 5. Competitiveness and occupational fatality rate in Eastern
Mediterranean.
The World Economic Forum has ranked established
market economies in Asia quite high on its GCI ranking
list. Noteworthy is that also new market economies, such
as India and China, have quite a good index position.
Both countries are undergoing industrialization and
urbanization, but much of their manpower is still in
physically demanding and in craft-intensive work.
Fig. 6. Competitiveness and occupational fatality rate in Asia (including
SEARO and WPRO countries)
IV. DISCUSSION
Competitiveness can be used to explain the number of
occupational accidents per 100 000 workers. The
regression analyses performed gave an R2 value of almost
60%. Competitiveness is highest in the countries where
the fatality rate is lowest. When gross national product
was used to explain work-related mortality, probability
was low (p=0.197). Countries can have a good safety
level without a high gross domestic product.
However, competitiveness also depends on region.
Those countries in which competitiveness is highest are
developed, industrialized countries. The social structure
of developed countries is stable and that guarantees a
better working environment for companies. It appears that
if countries wish to pursue higher competitiveness at the
global level, they also have to put a stronger effort into
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safety management at the national level as well as at the
company level. Companies which have put effort into
occupational safety and health have decreased their
accident figures even to zero, depending on their line of
business. Another result has been better productivity,
increased ability to work and job satisfaction.
Competitiveness is a sum of different factors and this
is considered in the global competitiveness index. Many
factors in the GCI are part of safety management and
preventive safety work, such as ethical behaviour,
education, and training. Of course the GCI can be thought
to be too simple to measure occupational safety and health
level. It would have been good if all these factors had
been analysed separately. In any case, it should be
remembered that the GCI already includes 89 variables
and the value of R2 is quite high. More important is that
more indicators to measure the occupational safety and
health level should be found.
The effect of globalization on competitiveness is hard
to assess. Globalization has many influences and has
already caused problems that are quite complex and
interrelated [28]. It has affected labour conditions
(including child and slave labour), natural resources
expenditure and environmental destruction, migration,
social movement and justice [29, 30]. Globalization has
led to an increase in deregulation, the informal sector, and
poverty [28, 30, 31]. These effects and outcomes differ
depending on the region and country. Western Europe and
the USA have benefited greatly from globalization. South
East Asia has also gained. [29] Some parts of South
America have gained, but globalization has also
aggravated many problems [29, 32]. Africa is the only
region where the effects of globalization have been
mainly negative [32].
Competitiveness requires political and economic
stability as well as a well-trained labour force [16]. Many
enterprises in high-income countries are relocating their
work to low-income countries which offer political and
economic stability. In these countries (e.g. Republic of
Korea, Malaysia, Chile, and Thailand) productivity and
competitiveness have increased and they have gained
from globalization [16, 30, 31]. Also, in many former
socialistic countries competitiveness has increased.
Workers’ consciousness has increased and this usually
leads to an improvement in occupational safety and
health.
On the other hand, multinational corporations may
relocate labour-intensive and often more dangerous work
to low-income countries in which salaries are low and
regulatory measures poor. From the safety management
perspective this is seen as a decrease in occupational
accidents and work-related diseases in developed
countries and as an increase in them in developing areas
because production work is usually the most dangerous.
Changes related to work, work conditions and work
environment have an effect on e.g. productivity, working
climate, safety culture, and workers commitment. These
are all factors which affect on competitiveness at
company level as well as country level.
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V. CONCLUSION
Occupational safety and health depends on
competitiveness. Both at national and company level
investment in safety and health increased e.g. employees’
job satisfaction, commitment to the company and
productivity. Competitiveness is comprised of different
factors, but noteworthy is that they are partly the same as
the factors which affect occupational safety and health.
There are several ways to achieve a good level of
competitiveness and of occupational safety and health.
Competitiveness requires political and economic stability
as well as a well-trained labour force. Comprehensive
safety management is a continuous process to develop
work, work conditions and work environment. It is target-
oriented management. With the help of occupational
safety and health management, companies can achieve
good results in safety and health [33].
One of the chief aims of occupational safety and
health is to change attitudes globally. To achieve this aim,
the combined efforts of nations and companies are
necessary. Ongoing globalization should be carried out
wisely; otherwise, there will be an increase in the number
of occupational health and safety problems, as well as
ergonomic problems, in developing and developed
countries [34, 35]. Global occupational safety and health
programmes should focus on the developing countries and
be supported by the developed countries.
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