For the fourth consecutive year, the World Economic Forum has lowered the United States in its annual ranking of the world’s most competitive economies.
The ranking, released Wednesday, put the U.S. in 7th place, two positions lower than last year.
The report observes of the U.S., “Although many structural features continue to make its economy extremely productive, a number of escalating and unaddressed weaknesses have lowered the US ranking in recent years. US companies are highly sophisticated and innovative, supported by an excellent university system that collaborates admirably with the business sector in R&D. Combined with flexible labor markets and the scale opportunities afforded by the sheer size of its domestic economy—the largest in the world by far—these qualities continue to make the United States very competitive.
“On the other hand, some weaknesses in particular areas have deepened since past assessments. The business community continues to be critical toward public and private institutions (41st). In particular, its trust in politicians is not strong (54th), perhaps not surprising in light of recent political disputes that threaten to push the country back into recession through automatic spending cuts. Business leaders also remain concerned about the government’s ability to maintain arms-length relationships with the private sector (59th), and consider that the government spends its resources relatively wastefully (76th).”
Switzerland, Singapore On Top
The annual survey ranks the economic competitiveness of 144 countries based on 12 key indicators. These include infrastructure, macroeconomic environment, labor market efficiency, and innovation.
Switzerland and Singapore retained their positions as the most competitive economies, coming in 1st and 2nd, respectively, followed by Finland, Sweden, the Netherlands, and Germany. Then comes the U.S. followed by the United Kingdom, Hong Kong and Japan to round out the top 10.
The report makes clear the nations of northern Europe are much more competitive than those of Southern Europe, where serious government debt and spending problems have been widely publicized.
“Switzerland retains its 1st place position again this year as a result of its continuing strong performance across the board,” the report states. “The country’s most notable strengths are related to innovation and labor market efficiency, where it tops the GCI rankings, as well as the sophistication of its business sector, which is ranked 2nd. Switzerland’s scientific research institutions are among the world’s best, and the strong collaboration between its academic and business sectors, combined with high company spending on R&D, ensures that much of this research is translated into marketable products and processes reinforced by strong intellectual property protection. This robust innovative capacity is captured by its high rate of patenting per capita, for which Switzerland ranks a remarkable 2nd worldwide. “
“The Global Economic Competitiveness Report 2012-2013,” World Economic Forum: http://reports.weforum.org/global-competitiveness-report-2012-2013/