U.S. Falls to 5th on List of Best Competitors : Commerce: Japan remains No. 1. Germany, Switzerland and Denmark pass America. U.S. weaknesses include capital formation and education.
The United States has slipped from second to fifth in a ranking by two Swiss organizations of the ability of the world’s industrial economies to compete internationally.
Japan remained No. 1, and three European countries--Germany, Switzerland and Denmark--moved into the next three slots. At No. 5, the United States scored lower than at any time since the annual rankings began in 1980, according to the report’s authors.
Of the 22 industrial countries in the ranking, released Sunday by the International Institute for Management Development and the World Economic Forum, the United States finished at or near the bottom in a surprising number of the 283 criteria.
It was dead last, for example, in capital formation relative to the size of its economy--a measure of the money available for productive investment.
Hard data about each nation’s economy accounted for about two-thirds of the criteria used for the ranking, so the recession cut into the U.S. performance as measured by such indicators as economic output and industrial production. The other third of the criteria was based on a survey completed by 3,300 business executives worldwide; the U.S. economy fared worse in the survey than in the data analysis.
U.S. business management was judged to have the least international experience, for example, and only Greece’s school system was judged less adequate than America’s in meeting the nation’s economic needs.
On a statistical scale with zero as the midpoint--or average competitiveness--Japan led the other 21 countries with a score of about 196. The American score of 94 was exceeded by Germany at 155, Switzerland at 114 and Denmark at 110.
At the other end of the spectrum, Greece, at minus 255, was last by a substantial margin behind Turkey. Portugal, Italy and Spain were third, fourth and fifth from the bottom.
The report separately analyzed 14 industrializing economies and once again ranked Singapore comfortably on top. Next, closely grouped, were four other East Asian economies: Taiwan, Hong Kong, Malaysia and Korea. Three countries were added to this year’s analysis: South Africa (ranked eighth), Venezuela (ninth) and Pakistan (14th).
The report grouped its 283 economic criteria into eight broad categories, and Japan led in four: domestic economic strength, science and technology, finance and people.
The best U.S. showing was second place, behind Norway, for its government’s contribution to a sound business climate. The other category leaders were Germany (infrastructure), New Zealand (economic internationalization) and Denmark (management skills).
As the world’s biggest economy, the United States naturally dominated such size-based economic yardsticks as total economic output. But on a measure of economic growth between 1984 and 1990, it placed 11th.
American schools were deemed to provide the worst compulsory education, although the United States ranked behind only Canada in the number of 20- to 24-year-olds enrolled in higher education.
More specifically, American schools were judged worst in teaching other languages and the history of other cultures, although the United States ranked fourth (behind the Netherlands, Canada and Belgium) in its openness toward other cultures. Japan ranked second-to-last in cultural openness, ahead of only Finland.
On the positive side, the American government was found to foster a sound business environment, mostly by keeping its nose out of business affairs. Tax revenue as a share of economic production was the lowest of the 22 industrial countries--the United States had by far the lowest gasoline tax--and government subsidies to business were lower than in all countries except New Zealand.
Even in the government category, however, the United States scored last in the degree to which special-interest lobbying distorted government decisions, and its voter turnout was next to last--with only Switzerland trailing it.
American business scored last or second-to-last in categories measuring its orientation toward the long term, its intercultural understanding and its employee turnover rate. Business executives responding to the survey listed the United States as having the most serious problem of drug and alcohol abuse in the work place.
Fifth and Falling
The United States has slipped from second to fifth place in a ranking by two Swiss organizations of the ability of the world’s industrial economies to compete internationally. Also shown are the nations’ ranking in the prior year.
Rank Rank Country Prvs. Year 1 Japan 1 2 Germany 3 3 Switzerland 4 4 Denmark 8 5 United States 2 6 Netherlands 7 7 Austria 6 8 Sweden 12 9 Ireland 13 10 Finland 9 11 Canada 5 12 Belgium 11 13 Great Britain 10 14 France 15 15 New Zealand 18 16 Australia 16 17 Norway 14 18 Spain 19 19 Italy 17 20 Portugal 21 21 Turkey 20 22 Greece 22
Source: World Competitiveness Report
