The World Economic Forum (WEF) released their annual global competitiveness index yesterday where Switzerland retained the top position for the second year running. The US dropped two positions to fourth while Sweden and Singapore took the second and the third places respectively.
The weaknesses of the US public and private institutions along with the ongoing macroeconomic imbalances pushed the US rankings downwards.
Europe dominates the top 10 list with six entries including, Switzerland, Sweden, Germany, Finland, Netherlands and Denmark. The others in the top 10 aside from the US and Singapore are Japan and Denmark.
UK rises two positions to 12th following Hong Kong at 11. The macroeconomic environment of UK is the "greatest competitive Weakness" according to the WEF report which was backed up by the Bank of England's decision to hold the interest rates at 0.5 per cent for the 18th consecutive month.
“Policy-makers are struggling with ways of managing the present economic challenges while preparing their economies to perform well in a future economic landscape characterized by uncertainty and shifting balances,” said Klaus Schwab, Founder and Executive Chairman of the World Economic Forum. “In such a global economic environment, it is more important than ever for countries to put into place the fundamentals underpinning economic growth and development.”
The Global Competitiveness Report’s competitiveness ranking is based on the Global Competitiveness Index (GCI), developed for the World Economic Forum by Sala-i-Martin and introduced in 2004. The GCI is based on 12 pillars of competitiveness, providing a comprehensive picture of the competitiveness landscape in countries around the world at all stages of development. The pillars are: institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation.