Finland Tops Survey on Growth

Finland is the world’s most competitive economy, followed by the United States, Sweden, Taiwan, Denmark and Norway, according to a report released Wednesday.

The annual Global Competitiveness Report by the World Economic Forum ranks the economic growth prospects of countries based on technological progress, the quality of public institutions and the macroeconomic environment.

Finland, home to mobile phone giant Nokia, captured first place for the third consecutive year, the Geneva-based organization of business, political and other leaders said in its survey of 104 countries.

The report praised Finland for being “very well managed” at the macroeconomic level, for the quality of its public institutions and for the Finnish private sector’s ready adoption of new technologies and nurturing of innovation.

The United States held second place, as it did in 2003.

The forum said U.S. technological supremacy was offset by weaker performance related to its public institutions and the stability of the macroeconomic environment.

Augusto Lopez-Claros, chief economist and director of the World Economic Forum’s Global Competitiveness Program, said that the U.S. had a “huge pipeline of innovation” but that its large budget and trade deficits were worrying.

The forum ranked the U.S. first on a separate business competitiveness index.

Nordic countries held five of the top 10 places. Norway got the biggest promotion, to sixth place from ninth in 2003.

Britain rose to 11th place from 15th last year. The forum said Estonia, in 20th place, was by a significant margin the most competitive of the 10 countries that joined the European Union in May.

Italy, which ranked 26th in 2001, dropped six more places this year to 47th. The forum cited sharp drops in the quality of Italy’s public institutions, worries over judicial independence, favoritism in public sector decision-making and the business costs of crime.

Harvard Business School professor Michael Porter, co-director of the report, lamented Italy’s “alarming decline.”

Japan moved into the top 10, rising to ninth place from 11th as a strong economic recovery boosted business confidence. China fell two notches to 46th place.

Chile, by far Latin America’s most competitive economy, rose to 22nd place from 28th last year.