U.S. Regains Top Spot in World Competitiveness Rankings; Hong Kong Falls to No. 3

The U.S. has regained the No. 1 spot in 2013, thanks to a rebounding financial sector, an abundance of technological innovation and successful companies, according to IMD Business Schools' World Competitiveness Rankings.

 

Hong Kong, which was No. 1 in 2012, fell to No. 3 spot. Singapore fell from being No. 4 in 2012 to No. 5 in 2013.

 

China (21) and Japan (24) are also increasing their competitiveness. In the case of Japan, Abenomics seems to be having an initial impact on the dynamism of the economy.

 

In Europe, the most competitive nations include Switzerland (2), Sweden (4) and Germany (9), whose success relies upon export-oriented manufacturing, diversified economies, strong small and medium enterprises (SMEs) and fiscal discipline. The rest of Europe is heavily constrained by austerity programs that are delaying recovery and calling into question the timeliness of the measures proposed.

 

The BRICS economies have enjoyed mixed fortunes. China (21) and Russia (42) rose in the rankings, while India (40), Brazil (51) and South Africa (53) all fell.

 

Emerging economies in general remain highly dependent on the global economic recovery, which seems to be delayed.

 

In Latin America, Mexico (32) has seen a small revival in its competitiveness that now needs to be confirmed over time and by the continuous implementation of structural reforms.

 

"While the euro zone remains stalled, the robust comeback of the US to the top of the competitiveness rankings, and better news from Japan, have revived the austerity debate," said Professor Stephane Garelli, director of the IMD World Competitiveness Center. "Structural reforms are unavoidable, but growth remains a prerequisite for competitiveness. In addition, the harshness of austerity measures too often antagonizes the population. In the end, countries need to preserve social cohesion to deliver prosperity."

 

"True, Europe's competitiveness is declining, but Switzerland, Sweden, Germany and Norway are shining successes. Latin America is disappointing, but there are great global companies all over that region. Brazil, Russia, India, China and South Africa are immensely different in their competitiveness strategies and performance, but the BRICS remain lands of opportunities," Garelli said.

 

"In the end, the golden rules of competitiveness are simple: manufacture, diversify, export, invest in infrastructure, educate, support SMEs, enforce fiscal discipline, and above all maintain social cohesion."
 

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