Switzerland ranks as the world’s most competitive country for the seventh year in a row, followed by Singapore and the United States, according to a World Economic Forum report released Tuesday.
Rounding out the top 10 in the Global Competitiveness Report 2015-2016 were Germany, the Netherlands, Japan, Hong Kong, Finland, Sweden and the United Kingdom. African countries held up the bottom of the rankings of 140 countries.
The report said countries that fail to embrace the structural reforms needed to boost productivity and encourage entrepreneurial talent are losing out in the global competitiveness race. It said driving productivity levels forward is important to achieve growth, bring unemployment rates down and be competitive.
It noted that economic growth has returned in most countries, but not to 2008 pre-crisis levels. The report warned that emerging markets that have failed to improve competitiveness since the recession will have great difficulty absorbing future shocks to the global economy.
Margareta Drzeniek-Hanouz, lead economist and head of Global Competitiveness and Risks for the World Economic Forum, noted that the digitalization of machines and manufacturing is becoming more important in the global economy. But she said the human factor is crucial for future competitiveness.
“And when we see also how the top economies have fared in comparison to some of the economies that rank well, we see that across the board, the common factor is that the top-ranking economies did actually very well in terms of this human factor," she said. Examples of the human factor, she said, include education, nurturing of talent, the flexibility of the labor market and the ability of the business sector to adapt to changes in the country.
The report used 12 pillars — such as infrastructure, macroeconomic environment, health and primary education, business sophistication and innovation — to rate a country’s competitiveness.
Key findings showed the trend in the larger emerging markets is mainly one of decline or stagnation. But the report noted that India and South Africa appear to be bucking this trend, with both countries moving up in the rankings. It said 28th-ranked China is the most competitive in this group of economies, but China's failure to move up in the rankings shows that the country is facing some difficult economic challenges.
The report said sub-Saharan Africa continues to grow at close to a 5 percent annual rate, but competitiveness and productivity remain low, largely because of volatile commodity prices.
Most African countries are in the bottom half of the competitiveness ranking, with Guinea at number 140. But a few countries are doing well. Mauritius (46th) remains the region’s most competitive economy, followed closely by South Africa and Rwanda. The report cited Ivory Coast (91st) and Ethiopia (109th) as this year’s largest improvers in the region overall.