Global Competitiveness: Canada falls from Top 10
Productivity, debt level weaknesses among factors attributed to competitive slip.
Ottawa – A Global Competitiveness Report – released by the World Economic Forum this week – says Canada dropped two spots to 12th overall. More precisely, other countries ranked in the report moved ahead while Canada held steady. Since 2009, Canada has turned in nearly identical overall competitiveness scores, says the Conference Board of Canada.
As the Canadian Partner Institute for the World Economic Forum, the Conference Board carried out the Executive Opinion survey to obtain corporate leaders’ perceptions of the business climate. The overall rankings are calculated from both publicly available data and the Executive Opinion Survey – which, this year, included over 14,000 business leaders (including 82 in Canada) in 142 economies.
According to the survey respondents, Canada’s areas of strength include its health and primary education systems, labour markets, financial markets, institutional effectiveness, and the state of its infrastructure – all of which have contributed to the development of a sustainable and vibrant economy. However, respondents said the burden of government regulations and wastefulness of government spending were among the most problematic factors for doing business.
In the report, Canada got mixed results for its macroeconomic environment, culminating in an overall ranking of 49th in this area of competitiveness. Canada earns top scores in both inflation and country credit rating, but these strengths were offset by a ranking of 80th in terms of gross national savings as a percentage of gross domestic product (GDP), and 129th out of 142 countries in terms of overall government debt levels as a percentage of GDP.
For the third consecutive year, Switzerland topped the overall rankings, while Singapore overtook Sweden to claim second position and Finland jumped three positions to number four, dropping the United States to fifth.
Since losing first place to Switzerland in 2009, the United States has continued to slip in the rankings, due to weak economic fundamentals and increasing concerns about the efficiency and effectiveness of U.S. institutions and leaders.
Germany (6th), the Netherlands (7th), and Denmark (8th) bolstered the strong showing of Northern and Western European countries. Despite slipping three spots, Japan ranked ninth. The United Kingdom jumped up two places to 10th position and Hong Kong maintained 11th place, dropping Canada to 12th.
Several emerging economies and developing nations—particularly Asian economies—are closing the gap between the traditional “rich” and “poor” countries. The results show that while competitiveness in advanced economies has stagnated over the past seven years, in many emerging markets it has improved.
“After a number of difficult years, a recovery from the economic crisis is tentatively emerging, although it has been very unequally distributed,” said Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, in a release announcing the results. “Much of the developing world is still seeing relatively strong growth — despite some risk of overheating, while most advanced economies continue to experience sluggish recovery, persistent unemployment and financial vulnerability, with no clear horizon for improvement.”