Competitiveness Yearbook Puts U.S. at No. 1

The United States leads the world in competitiveness, followed by Asian powerhouses Singapore, Hong Kong and Japan, according to a survey released today.

Switzerland and Germany have slipped to 9th and 10th, the report says, and Britain and France, in 19th and 20th place, are still waiting for takeoff. Russia ranks last.

The 600-page World Competitiveness Yearbook, published annually by the International Institute for Management Development based here, measures and compares the competitiveness of 46 countries. It defines competitiveness in terms of mechanisms that help create wealth in a nation.

The private research institute uses 230 criteria covering economic strength, technology, financial services, international trade, government policies, management, infrastructure and educational skills.

The U.S. solidified its leading position, coming out in first place in economic strength, new technology and financial services, and placing second in international trade. Its weakness, according to the researchers, lies in education and training, where it scored 15th.

“The high rankings given to the United States are likely to fuel a passionate debate on the social costs of regaining competitiveness,” said Stephane Garelli, one of the report’s authors.

“The country’s success is the result of bold economic reforms, deregulation and privatization and renewed leadership in new technology. But at the same time, achieving this success implies that the revenues of certain employees were frozen while productivity was soaring.”

Asian countries have continued to excel, according to the yearbook. This was reflected in their ranking by strength of domestic economy: China, second; Singapore, third; South Korea, fourth; Japan, fifth; Malaysia, seventh; and Hong Kong, eighth.

Overall, China rose from 31st place for 1995 to 26th this year, but Taiwan slipped from 14th to 18th.

Japan, the world leader in competitiveness for many years, is still plagued by uncertainties. It scored second in management and technology but plummeted to 21st place for government policies.

“The implication is that Japan needs to face long-term structural problems so that it can adapt its political system and reform the society,” the report says.

Northern European countries scored well. Denmark is in fifth place; Norway, sixth; the Netherlands, seventh; Luxembourg, eighth; Sweden, 14th; and Finland, 15th.

The largest southern European nations continued to suffer. Italy is ranked 28th; Spain, 29th; Turkey, 35th; and Greece 40th.

Germany and Switzerland both dropped four places in overall ranking since 1995, reflecting flat economies and other factors. Both scored poorly in economic strength--Germany at 19th and Switzerland at 20th--and Germany also flopped in management, ranking at 20th.

The combination of high unemployment, severe company restructuring and flat domestic consumption in Germany may lead the country into a gloomy period, Garelli said.

For Latin America, the rising star is Chile, ranked at 13th overall. Its nearest rivals in the region are Argentina, at 32nd, and Colombia, at 33rd.

At the bottom of the table are a number of resource-rich countries that fell short in dynamic wealth creation. India ranked 38th; Indonesia, 41st; Mexico, 42nd; and South Africa, 44th.