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The rating of the competitiveness of the countries of the world is an indicator that is annually calculated by the Institute of Management (IDM – Institute of Management Development), located in the Swiss city of Lausanne. The place in it shows how each country is able to create conditions for the development of a business that can withstand competition in the international arena.
To build the rating, 333 criteria are used that characterize the state of the state economy, the effectiveness of government actions, the state of the business environment and infrastructure. For the assessment, both statistical data and expert opinions and reviews of businessmen are used. Each year, the positions of countries in the ranking change, a detailed justification is given for this.
- IMD Competitiveness Ranking
- 1st place: Singapore
- 2nd place: USA
- 3rd place: Hong Kong
- 4th place: the Netherlands
- 5th place: Switzerland
- 6th place: Japan
- 7th place: Germany
- 8th place: Sweden
- 9th place: Great Britain
- 10th place: Denmark
- 11th place: Finland
- 12th place: Taiwan
- 13th place: South Korea
- 14th place: Canada
- 15th place: France
IMD Competitiveness Ranking
|IMD Competitiveness Ranking||1||Singapore||5.0|
1st place: Singapore
The leader in the ranking is Singapore, a small island state in Southeast Asia. It is a country with a developed market economy and a high – about $ 26 thousand – WFP per capita. Wealth is supported by the export of electronics, information technology, financial services, and pharmaceuticals.
In 1965, after gaining independence from the Federation of Malay, Singapore was a very poor and corrupt country. The republic did not have its own production, even fresh water and building sand were imported from Malaysia. The first president of the island state, Lee Kuan Yew, began to actively attract investors, persuading people who showed interest in Singapore to open their businesses there.
Economic freedom, the absence of protectionism that protects ineffective enterprises, allowed Singapore to achieve high rates of growth of national wealth – at different times in the range of 2-7% per year. The republic belongs to the “Asian tigers” – the eastern countries that quickly made the leap from poor developing to developed.
2nd place: USA
The United States of America is the richest country in the world, with an economy of almost a quarter of the world's GDP. The economic structure is typically post-industrial, most of the product is created in the service sector – primarily education and science, medicine, transport, government and other services. These spheres account for almost 80% of GDP, 20% is industry and less than 1% is agriculture.
Of some importance for the economic well-being of the United States is the fact that the US dollar is the world's main reserve currency. This allows the country to save on conversions, as well as borrow money in the capital markets at low rates due to the high liquidity of the dollar. On the other hand, there are also negative effects – due to the high exchange rate, the competitiveness of American exporters is reduced.
An important competitive advantage of the United States economy is its transparency. The American government publishes many freely available reports on various indicators. The openness of data on various companies allows investors to make better economic decisions.
3rd place: Hong Kong
Hong Kong is an autonomous region within China. Since 1841 it was a colony of Britain, which declared it a free trade zone – this was facilitated by its advantageous geographical position. In 1997, Hong Kong was transferred back to China, but retained a high degree of autonomy in line with the “one country, two systems” course. It has its own currency – the Hong Kong dollar.
Hong Kong's economy is one of the most pronounced liberal market. The state very weakly interferes in business, there is no foreign exchange control, there are no obstacles for foreign investment. Banks operate freely – over 250 banking institutions are open in the region.
In Hong Kong, both the service sector and industry are developed. An important role is played by the production of clothing and fabrics, which accounts for 30% of exports, while electronics occupy the second place in sales abroad. Hong Kong is one of the world's largest financial centers. Tourism is also developed – the region is visited by more than 10 million people a year.
4th place: the Netherlands
The Netherlands is the leader among European countries in terms of competitiveness. The economy here is oriented towards other countries, transport and trade play an important role in it – this is facilitated by the position in the center of Europe.
Thanks to the high level of economic freedom, a favorable entrepreneurial atmosphere and a large number of highly qualified specialists, many European companies locate their industrial production in the Netherlands. Leading industries are gas and oil production, metallurgy, electrical engineering and household chemicals.
Tourism is of great importance for the economy of the Netherlands – the country is visited by more than 10 million tourists a year. Most often, two of the twelve provinces are visited – North and South Holland. The name Holland has stuck to the whole country, but the Netherlands recently officially dropped it in order to reduce the “congestion” of tourists in these provinces and let people know that there is something to visit in other parts of the state.
5th place: Switzerland
The Swiss Confederation is the banking “heart” of Europe; its economy is largely based on the circulation of foreign financial capital. It is one of the most stable countries in the world, which has not participated in wars for several centuries.
The Confederation has a favorable climate for small and large businesses. The state minimally interferes with the work of enterprises, the needs of people are met by the free market. There is almost no unemployment. In addition to banking, the Swiss watch industry is of global importance.
Three quarters of Swiss workers are employed in the tourism sector. Holidays in this country are quite an expensive pleasure, but there are still a lot of people who want to visit the alpine resorts. The tourism business is one of the key factors in enriching the country and ensuring a high standard of living for the population.
6th place: Japan
Japan is one of the “Asian tigers”, a country that has increased its GDP more than 60 times since the 60s of the XX century. This happened due to an increase in exports – cheap Japanese goods, like Chinese products today, flooded the Western market several decades ago. To stop this process, the United States and European countries persuaded Japan to raise the yen rate, and prices for its brands increased markedly.
The main export items are vehicles and electronics. Particularly prized are Japanese cars, which account for 40% of all overseas sales. At the same time, Japan is forced to import natural resources, which are very few in its own territory. A careful attitude towards natural resources was characteristic of the Japanese in the past centuries.
Now, when exporting, Japan focuses on the quality of products, and not on the massive sale of cheap things. The country is aimed at the high-tech market – robots, optics, electronics. Also, Japan plans to expand the sale abroad of expensive and dietary food products – valuable varieties of fish, specific desserts.
7th place: Germany
The peculiarity of Germany is the social-market organization of the economy. This means that a sufficiently high freedom of entrepreneurship remains, but at the same time the state does not forget about social security of the population – the costs of this are a rather high tax burden. Trade unions and employers see each other as partners, not as opposing forces.
Germany is characterized by “Rhine capitalism”, in which banks are shareholders of enterprises and influence business decisions with significant influence. Industry occupies a large share in the economy – its role is higher than in other developed countries, where the service sector is in the lead.
The German economy is clearly export-oriented. The most important trade partners are France, other EU countries, Great Britain, USA, China, Russia. The country is constantly expanding its presence in the world market at a rate of several percent per year.
The problems of Germany include, first of all, the economic integration of the eastern part of the country, the former GDR. The federal government is allocating $ 100 million a year to address these difficulties.
8th place: Sweden
The economy of Sweden is considered by many to be socialist, while for others it is an example of “capitalism with a human face”. The country has very low public debt and low inflation, a stable banking system.
In the early 1990s, a crisis began in Sweden, during which there was a rapid depreciation of the national currency, an increase in budget spending and an increase in the number of unemployed. To get out of this situation, a “ceiling” of government spending was set, allowing the budget to maintain a surplus. Thanks to this, it was possible to reduce taxes on enterprises and the population, while not abandoning social programs.
Sweden is characterized by a liberal approach to international trade. The country is focused on exporting a wide range of goods and maintains a positive trade balance. Now the sphere of information technologies and telecommunications plays a big economic role here. In Sweden, not only large enterprises are involved in this – on the contrary, good conditions have been created here for small IT startups.
Despite the fact that Stockholm is one of the important economic nodes, the level of well-being is not very noticeable in the center of the country and in the periphery. Even the poorest parts of Sweden have a higher standard of living than the European average.
9th place: Great Britain
In the UK, which was in deep decline after World War II, rapid economic growth began again since the 1980s. This was helped by mass privatization, as well as the country's accession to the EU. The state invested in improving the quality of education and skills of the workforce.
In terms of the number of jobs in the UK, the service sector is in the lead – it employs two thirds of the working population. One fifth of them work in the industry. The rest either have their own businesses or are employed in the government or the military sector.
Unlike many other Western countries, Great Britain is self-sufficient in oil and coal. These fossils play a role in exports as well. However, in general, natural resources are scarce here, their contribution to the well-being of the British is insignificant. Iron ore, for example, ceased to be mined altogether in order to preserve the remaining reserves.
Brexit, which began in 2016, has not yet had a serious impact on the British economy. It is assumed that the free trade zone will continue for several years after Britain's exit from the EU.
10th place: Denmark
Denmark is a country that preserves an industrial and agrarian economy. At the beginning of this century, one fifth of the working-age population was employed in agriculture – now, due to the enlargement of farms, only 6% remain in this sector. Industry accounts for 40% of the national income. The country has one of the most stable economies in Europe and one of the most stable currencies, the Danish krone.
Denmark is the world leader in terms of foreign trade turnover per capita. Export earnings account for 50% of GDP. Food is supplied abroad – sea fish, Danish livestock products (meat and milk), as well as industrial and agricultural equipment, tools, furniture, medicines. An interesting export item is Christmas trees growing in artificially planted forests.
In the labor market, there is an agreement between employers and trade unions. The Danish approach is characterized here by the word “flexicurity” – from a combination of flexibility and security. The system is called the “golden triangle”. Its first aspect is the employer's ability to fire and hire employees as needed, the second is financial assistance to those who have lost their jobs, and the third is training and assistance in finding employment for the unemployed.
The disadvantages of the Danish economic system are high taxes, reduced competitiveness in the foreign market due to the high exchange rate of the kroon, high cost of essential goods and housing. Cars are especially expensive here – they are several times more expensive than in neighboring European countries.
11th place: Finland
Finland has a predominantly post-industrial economy, 70% of the population is employed in the service sector. The country is characterized by economic and political stability. A competitive advantage is the close interaction between educational institutions, scientific and technical centers and enterprises.
The leading industries include the timber industry. Finland receives a significant income from the sale of timber abroad, and paper is also exported to other countries. Another export item is digital electronics, including Nokia phones. Overall, foreign trade accounts for about 40% of Finnish GDP. Tourism also contributes to welfare.
The disadvantages of the Finnish economic system include high taxes. For example, personal income tax can be as high as 35%. However, in return, the Finns receive free education, which allows even a person from a poor family to become a highly qualified specialist, as well as free medicine and other social benefits.
12th place: Taiwan
Taiwan is a country with a dynamically developing capitalist economy. It is characterized by a gradual decrease in state control, the privatization of banks and industrial enterprises. In the last century, Taiwan was a predominantly agricultural country, then the agricultural sector shrank and rapid industrialization began.
Among the industrial sectors that generate a large income from exports, we can highlight the cotton industry, which was in the lead here in the middle of the last century, as well as the production of building materials, aluminum, steel and glass. The food industry is developed – canned fish and seafood are produced and exported abroad. From agricultural products, fruits and vegetables are exported, which grow well in warm climates.
Like many other economically successful countries, Taiwan supplies electronics overseas. Computer parts are manufactured here, as well as printers – at the end of the last century, most of these devices were from here. The role of mechanical engineering is increasing.
The weak side of Taiwan is its dependence on the supply of natural resources, primarily energy – oil and gas. The country is striving to switch to hydropower, but now it does not meet all needs, and is unlikely to be in the future.
13th place: South Korea
The Republic of Korea is a country that has made the leap from extreme poverty to immense wealth in just a few decades. In 1953, when the South Korean state began to exist, it was one of the poorest in the world, lagging behind even many African countries in terms of GDP. Now it is one of the richest and most prosperous states in East Asia.
South Korea has been ranked first in the Bloomberg Innovation Index for several years, a measure of the role innovation plays in a country's economy. Patent activity is very active here, especially in the field of electronics and other “high technologies”. Export of these technologies abroad is one of the main income items of the republic.
The Korean state's openness to international trade and export orientation is considered the main reason for its rapid economic growth. Coma electronics, Korea supplies cosmetics and medicines abroad, encourages “medical tourism” – visiting the country for certain procedures and operations, including plastic ones. Foreigners visit the republic for other reasons, and there are more tourists here every year.
14th place: Canada
One of the main factors favorable for the Canadian economy is its proximity to the United States. The country has many treaties with the United States to facilitate trade and travel. It is the United States that accounts for three-fourths of Canadian exports.
Like the American one, the Canadian economy is oriented towards the free market. The service sector is in the lead in providing employment – 70% of citizens work in it. A quarter are employed in industry – the production of aircraft, trains, other vehicles, electronics. The territory of Canada is rich in minerals, which are enough not only for domestic needs, but also for supplies abroad. This is especially true for energy resources – gas, oil, coal – that are exported to the United States.
Canada is the second largest country in the world, due to the huge size of the territory, economic development in different parts of it is uneven. Most of the cities and population are located in the south, along the American border. In the north, there are territories where mostly Aboriginal people, not Europeans, still live, and they lead a traditional way of life, surviving mainly through fishing.
15th place: France
France is located in the center of Western Europe. Access to the trade routes of the Atlantic and Mediterranean Sea is of great importance for the country's economy. Economic weight allows the French state to play a key role in the politics of the European Union and the whole world.
Currently, there is a transition from nationalization to privatization in France, but the presence of the state in the economy is still quite noticeable. The country combines capitalist traits with laws that support the social sphere and reduce income inequality.
Tourism is one of the main sources of wealth in France. It is the most visited country in the world, hosting over 75 million tourists every year. The most developed railway network in Europe has been created here, which is used by both the French and residents and companies of neighboring countries.
State intervention in the economy includes planning. However, unlike the socialist states, it serves as a guideline and indicator for development rather than setting mandatory standards. This policy is sometimes called “economic dirigisme” – the state acts as a “conductor” for the “orchestra” of private companies.
Attention! This rating is subjective and does not constitute an advertisement and does not serve as a purchase guide. Before buying, you need to consult with a specialist.