IMD Competitiveness Report: Switzerland regains ground

The USA has surrendered its status as the world’s most competitive economy after being overtaken by China Hong Kong and Switzerland, according to the IMD World Competitiveness Center. The IMD World Competitiveness Center, a research group within IMD business school, has published the ranking each year since 1989 and it is widely regarded as the foremost annual assessment of the competitiveness of countries.

The 2016 edition ranks China Hong Kong first, Switzerland second and the USA third, with Singapore, Sweden, Denmark, Ireland, the Netherlands, Norway and Canada completing the top 10.

Professor Arturo Bris, Director of the IMD World Competitiveness Center, said a consistent commitment to a favourable business environment was central to China Hong Kong’s rise and that Switzerland’s small size and its emphasis on a commitment to quality have allowed it to react quickly to keep its economy on top.

China Hong Kong and Singapore aside, however, the research suggests Asia’s competitiveness has declined markedly overall since the publication of last year’s ranking. Taiwan, Malaysia, Korea Republic, and Indonesia have all suffered significant falls from their 2015 positions, while China Mainland declined only narrowly retaining its place in the top 25.

The study reveals some of the most impressive strides in Europe have been made by countries in the East, chief among them Latvia, the Slovak Republic and Slovenia. Western European economies have also continued to improve, with researchers highlighting the ongoing post-financial-crisis recovery of the public sector as a key driver.

Business performance of Switzerland with potential
Although the development of Switzerland is encouraging some challenges remain. The report ranks Switzerland 10^th regarding “Business Performance”, an indicator measuring for example prices and employment. In Europe Ireland, Germany and the Netherlands perform better with regard to this indicator.

Challenges that the report mentions for Switzerland are:

• Preserve and advance bilateral relations with the European Union while seeking a better regulation of immigration.
• Support adjustment and cushion structural change in the face of the unfavorable currency and monetary environment.
• Strengthen competition in domestic sectors in order to raise productivity.

• Increase sustainability of social welfare and pension systems.
• Advance energy and environmental policies and reconcile these policies with economic objectives.

(SK)