2014 Global Competitiveness Ranking: The United States remains the leader, Japan overtakes China

2014 Global Competitiveness Ranking: The United States remains the leader, Japan overtakes China What is the competitiveness of various global economies in 2014? The United States leads the way, Europe recovers...

>How competitive are the various economies around the world in 2014? The United States leads, Europe recovers, and large emerging economies struggle. This is the answer given by the International Institute for Management Development (IMD) in Lausanne, Switzerland, the world's top business school, in the 2014 Global Competitiveness Yearbook.

In this year's ranking, the United States still ranks first, Switzerland and Singapore rank second and third respectively, mainland China ranks 23rd, and Japan overtakes China to rank 21st.

Emerging economies struggle

According to the yearbook, the United States ranks first because of its rapid economic recovery, improved employment data, and advantages in technology and infrastructure.

Compared with last year, the top ten economies in this year’s ranking have not changed much. Thanks to exports, business efficiency and innovation, the three small economies of Switzerland, Singapore and Hong Kong occupy the second, third and fourth positions respectively.

The gradual recovery of the economy has made Europe's competitiveness better than last year. In addition to Switzerland in 2nd, Sweden in 5th, Germany in 6th and Norway in 10th, Denmark also made it into the top ten, ranking 9th. Among Europe's peripheral economies, the competitiveness of Ireland, Spain and Portugal has increased, ranking 15th, 39th and 43rd respectively, while Italy and Greece have dropped 2 and 3 places respectively, ranking 46th and 57th.

Among Asian countries, Japan rose to 21st from 24th last year. The report said that the weak yen helped enhance its overseas competitiveness. The competitiveness of Malaysia and Indonesia has also improved, ranking 12th and 37th respectively. Political instability has caused Thailand's competitiveness to fall 2 places from last year to 29th.

Most large emerging economies have seen their competitiveness decline this year as economic growth and foreign investment slow, and infrastructure remains inadequate. According to the report, mainland China fell to 23rd place from 21st last year, partly due to concerns about its business environment; while inefficient labor markets and business management caused India and Brazil to slip to 44th and 54th respectively from 40th and 51st last year. In addition, Türkiye, Mexico, the Philippines and Peru also fell in the rankings.

"The overall competitiveness picture in 2014 is that the United States continues to succeed, Europe partially recovers, and some large emerging markets struggle." Arturo, head of the IMD World Competitiveness Center Brice said, "If a country wants to climb up in the competitiveness rankings, there is no unique secret recipe. Most of it depends on the local environment."

Overseas image

As part of the world competitiveness ranking, the IMD World Competitiveness Center also conducted a survey on the business environment and overseas image of each economy.

According to IMD's survey of business executives from various countries, seven of the top ten countries in terms of competitiveness are also in the top ten in terms of overseas image. Overall, there is a strong correlation between a country's overall competitiveness ranking and its international image as a business-friendly country.

Singapore's business executives are mostly optimistic about the country's overseas image. In comparison, business executives in the United States, France, Taiwan, and Poland are more pessimistic. The U.S. results may reflect issues such as international conflict and domestic political deadlock, while France's image remains weighed down by slow reforms and a negative attitude toward globalization, the survey reported.

"Economic performance changes year by year, and perceptions change over time and gradually. They can also enter a virtuous cycle of better image and better economic performance." So, how executives perceive their country is a potentially useful guide to future competitiveness development, Brice said.