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  Singapore overtakes the U.S. to top competitiveness ranking 

Schwab, Klaus; World Economic Forum
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Despite the injection of more than $10 trillion by central banks over the past 10 years, the World Economic Forum (WEF) is asking this $10 trillion question: "Why has global productivity stagnated for a decade?"

The short answer, based on its Global Competitiveness Report 2019, is that "most economies are still locked in a cycle of low or flat productivity growth."

The good news is that productivity can be improved. And the "economies that have channeled investments into human capital, improving institutions, innovation capability and business dynamism will be best placed to revive productivity and withstand a global slowdown," the WEF asserts.

The 2019 ranking

With a score of 84.8 (+1.3), Singapore is the world's most competitive economy in 2019, overtaking the United States, which falls to second place. Hong Kong SAR (3rd), Netherlands (4th) and Switzerland (5th) round up the top five.

The average score across the 141 economies covered by the report is 61 points, almost 40 points away from the ideal state or "frontier" of competitiveness. "This global competitiveness gap is of even more concern as the global economy faces the prospect of a downturn," the WEF states. "The changing geopolitical context and rising trade tensions are fueling uncertainty and could precipitate a slowdown." However, the WEF also notes that some of this year's better performers in the ranking appear to be benefiting from the trade feud through trade diversion, including Singapore (1st) and Vietnam (67th), the most improved country in this year's Index.

Regional highlights
The presence of many competitive countries in Asia-Pacific makes this region the most competitive in the world, followed closely by Europe and North America, the WEF reports. The ranking also reveals how heterogeneous the regional competitiveness landscape is. Although the Asia-Pacific region is home to some of the most technologically advanced economies in the world, the average scores of the innovative capability (54.0) and business dynamism (66.1) are relatively low, lagging behind Europe and North America.

In Europe, the global top three are promptly followed by the Netherlands (4th), Switzerland (5th), Germany (7th), Sweden (8th), the United Kingdom (9th) and Denmark (10th). Among other large economies in the region, France 15th, Spain 23rd and Italy 30th. The most improved country is Croatia (63rd).

Focus on Spain
Professor Pascual Berrone and researcher María Luisa Blázquez of IESE's International Center for Competitiveness (ICC) serve as collaborating members for the WEF, covering Spain for the compilation of the report. They note that Spain improved its ranking by three spots over last year with a score of 75.3, standing out globally in terms of its healthy life expectancy.

Methodology, very briefly
The WEF's Global Competitiveness Report series, first launched in 1979, features the Global Competitiveness Index 4.0 (GCI 4.0). The GCI 4.0, which first debuted in 2018, offers insights into the economic prospects of 141 economies in the era of the Fourth Industrial Revolution through 103 indicators organized into 12 pillars (i.e., categories) of competitiveness. The 12 pillars are: institutions, infrastructure, ICT adoption, macroeconomic stability, health, skills, product market, labor market, financial system, market size, business dynamism, and innovation capability. For each indicator, using a scale from 0 to 100, it shows how close an economy is to the "frontier" of competitiveness.

Full details are available in the report.
This article is based on:  The Global Competitiveness Report 2019
Publisher:  World Economic Forum
Year:  2019
Language:  English