The Most Competitive Economies of 2019
Recently, the World Economic Forum published its annual report. In which the 141 economies that makeup 99% of global GDP are ranked, in order of competitiveness.
In the World Competitiveness Report, the WEF measures a number of factors, 103 in total. That determine how competitive are most of the world’s economies. These are classified in areas such as infrastructure, institutions, macroeconomic stability, financial system, health, among others.
The results reinforced the financial predictions that foresee a global economic recession. Throughout the year, most of the economies analyzed showed low levels of growth. However, most of the top-ranking ones maintained their macroeconomic stability.
One of the factors that have contributed to this stagnation is the rise of geopolitical tensions. Exacerbated during the last year, by tensions in the international trading system. Thus, not surprisingly, the countries that showed the best performance were those that chose to diversify their investments and generate new trade agreements.
This year’s most competitive economies are:
Surpassing the United States and climbing three positions, this year, the small Asian country managed to place itself in the number 1 position, with 84.8 points out of 100. Singapore, that in recent years has also stood out for its innovation in the technology and smart cities sector. Has also managed to improve in the infrastructure, health and labor market sectors.
However, the country that has also been characterized by having a high level of control over the political life of its inhabitant’s, ranked 124 in the press freedom index.
- The United States
The United States descended one position compared to last year’s report. However, remaining as the largest best-ranked economy.
Among the areas in which the North American country stood out the most are business dynamism and innovation capacity.
However, areas such as domestic competition, market products and, not surprisingly, trade openness, have declined steadily over the past few years.
- Hong Kong
The Special Administrative Region of China is another economy that continues to climb positions in this ranking, year after year. Hong Kong currently ranks almost perfectly in the areas of health, macroeconomics, financial system and market.
However, areas such as the ability to innovate are considered among its main weaknesses. Not to mention, their lack of protection for workers. It is also possible that the political instability and repression that have taken place due to recent protests may have an impact in years to come.
- The Netherlands
The Netherlands, became the most competitive economy in Europe this 2019, taking the place of Germany. That had maintained this position during the last years.
In addition to having macroeconomic stability, a high level of business dynamism and a solid infrastructure. The main reason why this European country has managed to climb positions is because of its growing adoption of information and communication technologies.
Switzerland ranked in the 5th position, descending one compared to the previous year. Switzerland stands out in the areas of health, human capital, and skills, as well as unemployment. However, the complexity of its tariff regime makes place the country below the rest of the European countries, in this area.
Another of the world’s leading economies, Japan, continues to lose positions to other countries in the Asian continent. Although, it continues to have a high level of stability in the areas of health, infrastructure, commercial opening, and economic stability.
Japan faces new challenges in the global economy, to which it has not been able to adapt quickly enough. Among them is the participation of women in the labor market, in addition to the development of critical thinking and the specialized education of their workforce.
After years of being the strongest economy in the European Union, Germany begins to descend places. This is not surprising, considering that the country was very close to the economic, recession during the last months.
Germany continues to be the main generator of innovation worldwide, however, surprisingly it lags behind in the area of adoption of communication and information technologies.
Sweden continues to be one of the strongest economies in Europe thanks to its macroeconomic stability, a high level of innovation, business dynamism and growing adoption of communication and information technologies. However, it is still behind other economies in the region, considering the size of its labor market and domestic exports.
- United Kingdom
Another country that, despite its macroeconomic stability, begins to lag behind the new needs of the global market, is the United Kingdom.
Despite having a highly educated workforce, it is far behind the world’s leading economies in the level of adoption of information and communication technologies. In addition to the development of digital skills among its workforce.
Denmark continues being one of the most competitive economies of Europe and the world. With a stable economy, financial system and institutions, as well as a robust labor market and progressive adoption of new technologies.
Although its strict regulations in the labor market and lack of investment in research and development are areas that could lead the European country to lag over the next few years.
In summary, we can observe that, although the new geopolitical configurations have an important impact on the global economy. So do the new challenges that markets face, such as their ability to adopt new technologies and generate a sustainable development environment.
Similarly, facing the new challenges of international trade. Countries that have been able to generate new partners outside traditional trading systems have benefited.
And while the world’s leading economies continue to preserve their position as such. Currently, new economic regions, as well as market opportunities that could change this configuration in years to come, are in development.