Switzerland, Finland, Sweden and Denmark top of the league:
This proves that focus on innovation and technology through investments in infrastructure, education, scientific research and the establishment of strong intellectual property protection are “a successful strategy for boosting competitiveness in an increasingly complex global economy”, said Augusto Lopez-Claros, chief economist and director of the WEF’s Global Competitiveness Network.
- EU ahead of US, China and India:
The EU now counts six member states (the Nordic three, UK, Netherlands and Germany) in the top ten and, although most have not made any significant upwards moves in the rankings, the economies most often described as Europe’s main rivals in its race for competitiveness have not fared too well either.
The US has tumbled down the league, dropping from first to sixth place, overtaken by three EU member states, in a sign that the EU is making progress towards the Lisbon goal of becoming “the most competitive and dynamic knowledge-based economy in the world” by 2010.
The report also shows that the EU is still well ahead of China in the competitiveness race. Furthermore, China went down, and not up, in the rankings (to 54th position), its competitiveness limited by a largely state-controlled banking sector, low penetration rates for latest technologies (mobile telephones, internet, personal computers), and low school enrolment rates.
India on the other hand, could turn out to be Europe’s main rival in the global economy, having improved its performance to rank 43rd overall - ahead of the EU’s worst-performing countries - thanks to excellent scores in capacity for innovation and sophistication of firm operations.
- Europe must still do more:
Despite the EU’s overall improvement in terms of competitiveness, much remains to be done. Indeed, Europe’s largest economies all showed signs of slowing - although Germany and the United Kingdom continue to rank in the top ten, the UK is still lagging on innovation, whereas Germany’s cumbersome labour regulations are holding the business community back. France has fallen from 12th to 18th position, due to the lack of efficiency and flexibility of its labour market and its badly targeted public expenditure.
Italy has continued its downward slide to 42nd place in this year’s report. Having run budget deficits without interruption for the past 20 years, public debt levels are among the highest in the world. The study points to "deep-seated institutional problems" which have led to bad government spending, over-regulation and poor quality public services.
As in previous years, Poland and Greece remain the worst performers in the EU – similar to the results of the World Bank study on "Doing Business in 2007", which showed the two countries to be among the worst places to do business in the world (see EurActiv 7 September 2006).
Other new member states, however, including Estonia (25), the Czech Republic (29) and Slovenia (33), have performed quite well. And, among the candidate countries, Turkey and Croatia both seem to have benefited from the "EU bonus", moving up impressively in the rankings by 12 places each, to positions 59 and 51 respectively.
