Trump Effect: The US Overtakes Hong Kong at First Place Among World’s Most Competitive Economies

Money & The Economy, the economy


The 2018 IMD World Competitiveness Rankings emphasize a long-term trend highlighted in past editions – that the countries on the top of the list each have a unique approach to becoming competitive.

The IMD World Competitiveness Center ranks the competitiveness of 63 world economies every year since 1989. It compiles them using 258 indicators. Data such as national employment and trade statistics are weighted twice as much as the data from an Executive Opinion Survey that measures the business perception of issues such as corruption, environmental concerns and quality of life. (IMD)

 

The top five most competitive economies remain the same as the previous year but their order changes. The United States returns to #1, followed by Hong KongSingaporethe Netherlands and Switzerland. The return of the United States to the top is driven by its strength in economic performance (1st) and infrastructure (1st). Hong Kong takes a somewhat different approach exploiting its government efficiency (1st) and business efficiency (1st).

The Netherlands moves one place to 4th, while Switzerland moves down to 5thThe Netherlands’advancement shows a “balanced” path to competitiveness, ranking in the top 10 in economic performance, government and business efficiency. Switzerland declines mainly due to a slowdown in exports and an increase in perceptions about threats of relocation of R&D facilities.

DenmarkNorway and Sweden rank 6th, 8th and 9th respectively. The UAE (7th) and Canada (10th) close the top of the rankings.

Other economies that significantly advanced this year are Austria (18th) and China (13th). Professor Arturo Bris, Director of the IMD World Competitiveness Center, says, “Economic growth, reduction of government debt and increased business productivity enable Austria to move up. For China, investment in physical and intangible infrastructure as well as improvement on some institutional aspects such as the legal and regulatory framework boost its performance.”

Bris notes that, “This year’s results reinforce a crucial trait of the competitiveness landscape. Countries undertake different paths towards competitiveness transformation.” He adds countries at the top of the rankings share an above the average performance across all competitiveness factors, but their competitiveness mix varies. One economy, for example, may build its competitiveness strategy around a particular aspect such as its tangible and intangible infrastructure; another may approach competitiveness through their governmental efficiency.”

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