Wednesday, September 5, 2012

Competitive advantages: A comparison of competitiveness and wealth

September 5, 2012

Switzerland tops the latest global competitiveness ranking of 144 countries by the World Economic Forum, best known for its annual shindig in Davos (a Swiss ski resort). It is closely followed by Singapore, while Finland has replaced Sweden in third place. That may be some comfort to the Finns, whose economy is lagging while Sweden’s is thriving. Of the big emerging economies, China remains on top, with Brazil moving up. The most striking fall is for the United States, which has dropped in the rankings for four years in a row. It is now seventh. The rankings, based on criteria such as availability of capital, flexibility of labour markets, economic stability, infrastructure and public services, also reveal the mountains that the troubled countries of southern Europe need to climb. Greece is in 96th place. Plotting the rankings against GDP per person reveals an unsurprising link: competitiveness brings wealth, but rich countries can most easily afford competitiveness. They can also squander it though. Outliers on the chart include countries that are more wealthy than their competitiveness suggests—or even vice-versa.


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