Earlier this year a group of Harvard Business School academics warned that the dysfunctional nature of American politics was harming the country’s competitiveness. It’s a concern that seems to have been born out in the latest World Competitiveness Rankings from the Institute for Management Development (IMD), which saw the United States fall from 3rd spot down to 10th.
The rankings, which are topped by Singapore for the second year in a row, assess nations on their ability to generate prosperity. The top 5 was rounded out by Denmark, Switzerland, the Netherlands and Hong Kong, in a show of strength for smaller economies that the researchers believe is no fluke.
“The benefit of small economies in the current crisis comes from their ability to fight a pandemic and from their economic competitiveness,” they explain. “In part these may be fed by the fact it is easy to find social consensus.”
The authors believe that Singapore scored so highly in part due to its robust international trade and labor market conditions, and partly due to its robust infrastructure, including a strong technological infrastructure and education system.
Small economies for the win
Denmark continued the strong performance of smaller economies by coming 2nd in the league table, with the researchers suggesting this was in large part due to strong health and education systems, which compliment the robust economy and labor market in the country. The Danes also scored strongly on productivity and international investment.
The Swiss, who have been long time the leaders in INSEAD’s Global Innovation Index, also scored well, coming in 3rd place, with its scientific infrastructure and strong education systems a significant factor in that.
The ratings were produced after ranking countries across a number of metrics, including government efficiency, infrastructure, economic performance, and business efficiency. Each of these, in turn, had a number of sub-markers within them.
These sub-markers highlighted the strong regional variance that exists around the world, with Western Europe scoring highly on health and education, while Eastern Asia tended to lead the way in scientific and technological infrastructure.
