The US has surrendered its status as the world’s most competitive economy, losing out to both Hong Kong and Switzerland as it dropped to third place in one year, according to the latest edition of an annual competitiveness league table.
In a summary of its 2016 findings, the IMD World Competitiveness Center noted that the “sheer power of the economy of the USA is no longer sufficient to keep it at the top” of its World Competitiveness Ranking, which, it noted, the US has led for the past three years.
Another central finding in this year’s report, according to its authors, is that Asia’s competitiveness overall has declined markedly overall since the publication of last year’s ranking, in spite of Hong Kong’s apparent strong showing.
Taiwan, Malaysia, Korea Republic, and Indonesia all suffered “significant falls from their 2015 positions”, while Mainland China “declined [as well], only narrowly retaining its place in the top 25”, according to the summary of the 2016 IMD World Competitiveness research findings.
The IMD World Competitiveness Center is a research group that operates under the auspices of the Lausanne, Switzerland-based IMD business school. It has published the competitiveness ranking annually since 1989.
The 2016 edition ranks Hong Kong first, Switzerland second and the USA third, with Singapore, Sweden, Denmark, Ireland, the Netherlands, Norway and Canada completing the top 10.
Of the top 10 jurisdictions, Ireland rose the most places – nine – while the Netherlands rose the second-most, at seven. The biggest faller still in the top 10 is Canada, down five places, to tenth.
Arturo Bris, director of the IMD World Competitiveness Center, said a consistent commitment to a favourable business environment was central to Hong Kong’s rise. (The organisation refers to the former British colony as “China Hong Kong”, emphasising its status since 1997 as a Special Administrative Region of China.)
Bris attributed Switzerland’s strong performance to its relatively small size and its emphasis on a commitment to quality, which he noted helped to enable it to react quickly to keep its economy on top.
“The USA still boasts the best economic performance in the world, but there are many other factors that we take into account when assessing competitiveness,” he said, in a statement accompanying the latest ranking.
“The common pattern among all of the countries in the top 20 is their focus on business-friendly regulation, physical and intangible infrastructure, and inclusive institutions.”
Other key findings in this year’s IMD World Competitiveness report:
* Some of the “most impressive strides in Europe” have been made by countries in the East, chief among them Latvia, the Slovak Republic and Slovenia
* Western European economies have also continued to improve, with an ongoing post-financial-crisis recovery of the public sector seen as a key driver
* Thirty-sixth placed Chile is “the sole Latin American nation outside the bottom 20, while Argentina, in 55th, is the only country in the region to have improved on its 2015 position”
* “Since 1995, the world has become increasingly unequal in terms of income differences among countries, although the rate of increase is now slowing”
Each ranking is said by the IMD World Competitiveness organisation to be based on analysis of more than 340 criteria derived from four principal factors: economic performance, government efficiency, business efficiency and infrastructure.
Responses from an in-depth survey of more than 5,400 business executives who are asked to assess the situation in their own countries are also taken into consideration, the IMD World Competitiveness Center noted.
To read more about the IMD World Competitiveness report 2016, click here.