Global Competitiveness

[Anne B]

Anyone interested in the comparative economic situations of the UK and Australia might be interested in these summaries in the World Economic Forum's latest Global Competitiveness Report. http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2014-15.pdf. Lots to read there.

 

The Top 10 countries are

1 Switzerland, 2 Singapore, 3 USA, 4 Finland, 5 Germany, 6 Japan, 7 Hong Kong, 8 Netherlands, 9 UK, 10 Sweden. Australia is 22nd.

 

 

The United Kingdom climbs one spot to the 9th place. Overall, the country improves its performance thanks to gains derived from lower levels of fiscal deficit and public debt. In addition to these more favorable macroeconomic conditions, the United Kingdom continues to benefit from an efficient labor market (5th) and a high level of financial development (15th), despite the recent difficulties in parts of its banking system (89th) and the fact that the difficult access to loans (82nd) remains the most problematic factor for doing business in the country. In addition, the country benefits from an ICT uptake that is one of the highest in the world (2nd) and that, coupled with a highly competitive (5th) and large market (6th), allows for highly sophisticated (6th) and innovative (12th) businesses to spring up and develop. In addition to continuing to improve its macroeconomic conditions (107th), the country should look into effective ways to raise the overall quality of its education system (23rd), most notably in the areas of

mathematics and science (63rd), which will be crucial to continue fostering innovation in the country

 

 

Australia (22nd) follows an opposite trend. Since reaching its best rank—15th—in 2009, Australia has been dropping continuously in the rankings. However, although not outstanding, the country’s performance is remarkably consistent across the board. It ranks no lower than 30th in 11 of the 12 pillars of the GCI. It achieves its best rank in the financial market development pillar, advancing one position to 6th place. In particular, the soundness of its banking sector is especially strong (3rd, behind Canada and New Zealand). The country also posts gains in higher education and training, climbing to 11th position. Australia’s macroeconomic situation has deteriorated slightly (30th, down five places), owing mainly to the small increase of the budget deficit. Australia’s public debt-to-GDP ratio, though rising, is the fourth lowest among OECD countries. Overall, the quality of Australia’s public institutions is excellent (22nd) but tarnished by the 124th position it obtains for the extent of red tape. The main area of concern remains the labor market. Australia ranks 136th for the rigidity of its hiring and firing practices and 132nd for the rigidity of its wage setting. Indeed, as part of our Executive Opinion Survey, Australian businesses, year after year, have named the restrictive labor regulations the most problematic factor for doing business in their country by a wide margin.