US ranked most competitive economy in the world by World Economic Forum

The United States topped this year’s ranking of the world’s most competitive economies, followed by Singapore and Germany. Made by the World Economic Forum (WEF), the list is based on a survey with 12,274 global business executives in 140 countries. Almost 30 points and 80 ranks separate the United States from Argentina, the worst performing economy of the group.

The 20 most competitive economies, according to the World Economic Forum

The results demonstrate a strong correlation between competitiveness and income level. All 20 countries in the top 20 have high-income economies, and the top 40 only includes three low-income economies: Malaysia (25th), China (28th) and Thailand (38th).

“Governments must support those who lose out to globalization”

One of the study’s main findings is that, while more open economies tend to be more innovative and, therefore, more competitive, openness doesn’t always mean a “win-win” situation between countries. “It is at times a ‘win-lose’”, reads the report. However, countries which try to deal with the situation by adopting protectionist measures are actually counterproductive for sustained economic growth, according to the WEF.

The organization advises countries to focus on improving the conditions of those who are negatively impacted by globalization, rather than favoring protectionism. “Combining GCI data with other sources suggests that redistributive policies, safety nets, investments in human capital, and more progressive taxation could help reduce inequality without compromising a country’s level of competitiveness.”

Technology is less widespread than one would assume

According to WEF’s report, more than half of humanity has never gone online. While the world counts 7.6 billion inhabitants, there are only 4.5 billion smartphones in use. “The promise of leveraging technology for economic leapfrogging remains largely unfulfilled”, says the organization. 77 of the 140 economies studied struggle to innovate, as innovation capacity remains extremely limited, localized or restricted to few sectors.

Equality is key

Last but not least, the study revealed there is no trade-off between equality and economic growth: “it is possible to be pro-growth and pro-equity, as shown by the strong performance of several northern European countries in terms of both competitiveness and inclusion”, says WEF. The organization concluded its report by stressing the need for a more holistic model of economic progress, one which “promotes higher living standards for all, respects planetary boundaries, and does not disadvantage future generations”.

Photo: Pixabay, courtesy of WEF