The Global Competitiveness Report 2013-14 assesses the competitiveness of 148 economies based on “pillars” ranging from institutions to infrastructure. Here are the top ten countries in this year’s study:
1. Switzerland retains its 1st place position again this year as a result of its continuing strong performance across the board. The country’s most notable strengths are related to innovation and labour market efficiency as well as the sophistication of its business sector.
2. Singapore ranks 2nd overall for the third consecutive year, owing to an outstanding performance across all the dimensions of the Global Competitiveness Index (GCI). Once again, it is the only economy to feature in the top three of seven out of the 12 pillars of the GCI; it also appears in the top 10 of two others. It dominates the goods market efficiency pillar and the labour market efficiency pillar, and places 2nd in the financial market development pillar.
3. Finland retains its 3rd position. Similar to other countries in the region, the country boasts well-functioning and highly transparent public institutions, topping several indicators included in this category. Its private institutions, ranked 3rd overall, are also seen to be among the best run and most ethical in the world.
4. Germany moves up by two notches to 4th place this year. The country is ranked an excellent 3rd for the quality of its infrastructure, boasting in particular first-rate facilities across all modes of transport. The goods market is quite efficient and is characterized by intense local competition and low market dominance by large companies.
5. The United States reverses its downward trend, rising by two positions to take 5th place this year and overtaking the Netherlands and Sweden. While the economy is getting back on track, the deleveraging process in the banking sector continues to show positive effects on the stability and efficiency of the country’s financial markets.
6. Sweden falls two places to 6th position. Like Switzerland, the country has been placing significant emphasis on creating the conditions for innovation-led growth. Although the assessment has deteriorated slightly over the past year – mainly due to a somewhat weaker macroeconomic environment – the quality of Sweden’s public institutions remain first rate, with a very high degree of efficiency, trust and transparency.
7. Hong Kong SAR further consolidates its position among the 10 most competitive economies, advancing a further two places to 7th, thanks to a consistently strong performance. In particular, Hong Kong tops the infrastructure pillar for the fourth consecutive edition, reflecting the outstanding quality of its facilities across all modes of transportation.
8. The Netherlands loses three places and slips to 8th place this year after having moved up in the rankings in the last edition. The drop mainly reflects weakening financial markets and, in particular, rising concerns regarding the stability of banks. Overall, the economy is highly productive due to some pronounced strengths. Dutch businesses are highly sophisticated and innovative, and the country is rapidly and aggressively harnessing new technologies for productivity improvements.
9. Japan now ranks 9th with a score almost unchanged since last year, climbing one position. The country continues to enjoy a major competitive edge in business sophistication (1st for the fifth consecutive year) and in innovation. High R&D spending, availability of talent, world-class research institutions and capacity to innovate are among Japan’s strengths.
10. The United Kingdom rounds out the top 10, falling by two places in this year’s assessment. The country deteriorates slightly in several areas, most notably in terms of its macroeconomic environment and its financial markets. Overall, the United Kingdom benefits from clear strengths such as the efficiency of its labour market, in sharp contrast to the rigidity of those of many other European countries.
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Author: Beñat Bilbao-Osorio is Associate Director and Senior Economist of the Global Competitiveness and Benchmarking Network at the World Economic Forum.
Image: A businessman is seen in the financial district of Paris REUTERS/Christian Hartmann.