U.S. named world's most competitive economy for the first time in 10 years
For the first time in a decade, the United States was crowned the world’s most competitive economy by the organization behind the Davos economic forum.
The World Economic Forum on Wednesday released its latest global competitiveness report, which looked at 140 economies based on 98 wide-ranging social, political and economic factors. The organization assessed a variety of metrics, including infrastructure, information and communications technology, macroeconomic stability, health, skills and labour market. Countries were given scores out of 100.
The U.S. took the top slot with a score of 85.6, buoyed by its capacity for innovation, evident in its high scores in business dynamism and entrepreneurial culture. The report also highlighted the nation’s strong labour market and financial system.
But authors warned the U.S. economy is under threat from a “weakening social fabric,” corruption and security and IT issues. It also pointed out that the United States is far behind most advanced economies in health, with life expectancy six years behind competitors Singapore and Japan.
Singapore came in second, heralded for its infrastructure and openness as a global trading hub. Germany was third, notable for its macroeconomic stability. Other top economies included Switzerland, Japan and the Netherlands.
Regionally, more countries in East Asia and the Pacific were ranked as more competitive than European countries.
The WEF adapted the report, which it has put out for 40 years, to account for the importance of technology as an economic driver in the modern era, which WEF refers to as “the Fourth Industrial Revolution.”
The organization’s report introduced new indicators to measure cultural factors that feed growth and innovation, such as entrepreneurial culture, embracing disruptive ideas, critical thinking and social trust, factors which were weak across the board, the report’s authors warned. It also focused on the importance of resiliency, agility and human capital.
“With opportunities for economic leapfrogging, diffusion of innovative ideas across borders and new forms of value creation, the Fourth Industrial Revolution can level the playing field for all economies,” Saadia Zahidi, a WEF managing board member, said in a news release. “But technology is not a silver bullet on its own. Countries must invest in people and institutions to deliver on the promise of technology.”
Russia and China were the only emerging markets that placed in the top 50. The lowest-scoring countries included Chad, Mauritania, Mozambique, Congo, Sierra Leone and Liberia.