Global Competitiveness Ranking: U.S. Economy Slides to Fifth Place
The U.S. economy has fallen into fifth place in an annual study of global competitiveness, its third-straight yearly decline. The World Economic Forum says the country’s economic struggles, the inefficiency of its government, and public distrust of its politicians all contributed to its fall.
The WEF survey is compiled using public data as well as executive opinion, and the report is designed to identify a country’s strengths and weaknesses in relation to its prospects for economic growth. It is meant to offer a benchmarking tool to both the public and private sectors that can be used in order to make adjustments to improve the economy.
Northern and Western Europe dominated the top 10 this year. Switzerland (NYSE:EWL) took the study’s top spot, with Sweden (NYSE:EWD) coming in third. Finland climbing from seventh to fourth place, Germany (NYSE:EWG) in sixth, the Netherlands (NYSE:EWN) in seventh, Denmark in eight and the U.K. (NYSE:EWU) rising from twelfth place to tenth place. Rounding out the top 10 were Singapore (NYSE:EWS) in second place and Japan (NYSE:EWJ) in ninth after falling three places since last year.
The whole of the report, which ranks 142 countries, shows a shift in fortunes from developed countries to developing countries, with competitiveness in advanced economies like that of the U.S. began to stagnate. However, emerging markets (NYSE:EEM) have made little headway this year as well. Though China (NYSE:FXI) has the world’s second-biggest economy, it was ranked 26th in terms of competitiveness.
However, Klaus Schwab, founder and executive chairman of the WEF, said the survey shows that, “After a number of difficult years, a recovery from the economic crisis is tentatively emerging, although it has been very unequally distributed: much of the developing world is still seeing relatively strong growth, despite some risk of overheating.” But Schwab went on to say, “Most advanced economies continue to experience sluggish recovery, persistent unemployment and financial vulnerability, with no clear horizon for improvement.”
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The report uses 12 categories to assess a country’s ranking: institutions, infrastructure, macroeconomic environment , technological readiness, business sophistication, health and primary education, higher education and training,market size, goods market efficiency, labour market efficiency, financial market development, and innovation.