Economies are always on the move. Here in the United States we are working hard to get our economy to prosper and compete with the world’s other top economies. Click below to see which economies are making a name for themselves.
For most of the 20th century, the United States has been considered the world’s economic superpower. And up until four years ago, the World Economic Forum would agree. In 2008, it ranked the U.S. as the most globally competitive economy in the world. This year, when the group published its annual Global Competitiveness Report, the U.S. ranked seventh.
Like other competitive economies, the U.S. performs well in almost all the economic measures that the report considers. However, in recent years the country’s political conflicts and growing debt have become a problem. Public confidence in elected officials has dropped following the debt ceiling crisis in 2011 and the current struggle over the “fiscal cliff,” Kevin Steinberg, chief operating officer of the WEF, told 24/7 Wall St. in an interview.
According to the WEF, competitiveness reflects the level of productivity of a country, based on its institutions, policies and economic factors. In its study, the WEF groups the 144 countries it surveys into one of three economic categories. “Factor-driven” economies are the least developed and rely on low-skilled labor and natural resources. More developed countries are considered “efficiency-driven” economies because they turn to improving output. The most developed economies, which focus on improving technology and new product and idea development, are considered “innovative.”
To create the Global Competitiveness Index (GCI) score for each country, the WEF ranked more than 100 economic indicators divided into 12 broad categories, referred to as pillars, that quantify the extent to which a country is competitive. The economic indicators and pillars were then scored 1 to 7. To rank the countries, some economic measures were weighted more heavily than others, depending on how the economy was categorized.
In the case of Burundi, which was ranked the least competitive globally, 65 percent of the country’s competitiveness ranking was based on economic measures that reflect what the WEF calls “basic requirements,” such as a country’s infrastructure and institutions. Only 5 percent of the ranking was determined by “innovation and sophistication” factors, which are used to rank the most developed countries.
In the case of Switzerland, the most competitive country, basic requirements accounted for only 20 percent of the ranking, while 30 percent was based on innovation and sophistication factors, like the availability of scientists and engineers and local supplier quality and quantity.
Most competitive
1. Switzerland
GCI score: 5.72
GDP per capita: $81,161 (4th highest)
Debt as a percent of GDP: 48.6 percent (51st highest)
Individuals using Internet: 85.2 percent (10th highest)
Infant mortality rates: 4.1 per 1,000 live births (24th lowest)
Switzerland is the most globally competitive country, receiving the top overall score from the WEF. Switzerland received a score of 6.6 out of 7 in the quality of its infrastructure, the highest of all 144 countries. Switzerland also scored at the top in cooperation in labor-employer relations and the availability of financial services. The country scored very well in higher education, receiving the highest score of all countries in quality of the educational system, availability of research and training services, and extent of staff training. However, the WEF points out that the university’s enrollment rate, while improving, still lags behind other “high-innovation countries.”2. Singapore
GCI score: 5.67
GDP per capita: $49,271 (13th highest)
Debt as a percent of GDP: 100.8 percent (10th highest)
Individuals using Internet: 75.0 percent (24th highest)
Infant mortality rates: 2.1 per 1,000 live births (3rd lowest)
If Americans have had it with their elected officials, they may want to consider moving to Singapore — it has the highest score of all 144 countries in terms of the quality of its legal and administrative frameworks. Notably, the country has the best score of all countries in terms of public trust in politicians, minimizing wastefulness in government spending and transparency in government policymaking. Meanwhile, the U.S. scores 54th in terms of public trust, 76th in wastefulness and 56th in transparency. Singapore also ranks at the top for goods market efficiency, and second in infrastructure, higher education and training, labor market efficiency, and financial market development. The country’s 5.2 percent rate of inflation is dampening its competitiveness as more residents cite increasing costs as the biggest hurdle to doing business.3. Finland
GCI score: 5.55
GDP per capita: $49,350 (12th highest)
Debt as a percent of GDP: 48.6 percent (52nd highest)
Individuals using Internet: 89.4 percent (7th highest)
Infant mortality rates: 2.4 per 1,000 live births (7th lowest)
Contributing to its high competitive standing, Finland is the second most innovative economy in the world, only behind Switzerland. Notably, the country scores the highest in terms of the availability of scientists and engineers. Finland’s educational system is also impressive, as the WEF asserts the country has the highest quality of primary education, and the second highest quality math and science programs in higher education. While Finland scores relatively well across most economic measures, the country’s macroeconomic environment has weakened slightly due to moderately high inflation — although the problem is not nearly as serious as it is in other countries in Europe.Least competitive
1. Burundi
GCI score: 2.78
GDP per capita: $279 (the lowest)
Debt as a percent of GDP: 35.3 percent (58th highest)
Individuals using Internet: 1.1 percent (4th lowest)
Infant mortality rates: 87.8 per 1,000 live births (7th highest)
The least globally competitive country had problems all around. It was ranked in the bottom five in eight of the 12 major economic measures. The country ranks dead last in technological readiness, a key factor in what separates competitive and noncompetitive countries. Residents blame poor access to financing and corruption as the two most problematic factors for doing business in the country, and based on the WEF’s research it is not hard to see why. The country was ranked last also in the pillar of financial market development, which involves factors such as availability and affordability of financing. Last year, Burundi was ranked the most corrupt in East Africa, according to the nonprofit Transparency International.2. Sierra Leone
GCI score: 2.82
GDP per capita: $366 (5th lowest)
Debt as a percent of GDP: 60 percent (39th highest)
Individuals using Internet: 0.3 percent (the lowest)
Infant mortality rates: 113.7 per 1,000 live births (the highest)
Access to health services and education is a serious concern for the country. The country has the worst infant mortality rate of all countries, with 113.7 deaths per 1,000 live births. For children dying before the age of five, the rate is nearly 1 in 5, according to the World Health Organization. The country is in the bottom 10 in the percentage of the age-appropriate population enrolled in both secondary and tertiary education. According to the most recent data from the World Bank, only 41 percent of the population aged 15 and older is literate. While the Internet has become an increasingly important factor in the global economy, less than 1 percent of the country’s population uses it, the lowest rate of all 144 countries.3. Haiti
GCI score: 2.90
GDP per capita: $738 (18th lowest)
Debt as a percent of GDP: 10.6 percent (13th lowest)
Individuals using Internet: 8.4 percent (23rd lowest)
Infant mortality rates: 70.4 per 1,000 live births (14th highest)
As evidenced by the devastation of the Haiti’s earthquake and the struggle to rebuild the country, Haiti lacks the infrastructure necessary to compete in the global economy. The country’s infrastructure is the weakest in the world, according to the WEF. Furthermore, the country’s second-to-last ranking for institutions, is exacerbated by government problems. The country ranks last in public trust in politicians and second to last in transparency in government policymaking. Improvement in both these fields will be necessary for Haiti to allow it to slowly begin competing on the world stage.Click the NBC News link to find the rest of the countries’ rankings.
