Reversing a four-year downward trend, the US has climbed two places to fifth position in the global competitiveness index compiled by World Economic Forum (WEF), while Switzerland retained its top rank.
In the lead on the top 10 board, Switzerland was followed by Singapore and Finland, all three unchanged from last year. Germany moved two places up to fourth.
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The US turnaround reflects a perceived improvement in the country’s financial market as well as greater confidence in its public institutions, the report says.
The survey said: "Overall, many structural features continue to make the US economy extremely productive. US companies are highly sophisticated and innovative, supported by an excellent university system that collaborates admirably with the business sector in R&D.
"Combined with flexible labour markets and the scale opportunities afforded by the sheer size of its domestic economy make the United States very competitive," the survey report added.
Hong Kong climbed up to seventh and Japan advanced to ninth. But Sweden dropped to sixth, while the Netherlands sank to eighth, and the UK moved down to 10th, reflecting the Europe distracted by public debt and concerns about the Euro zone’s solidarity.
Singapore and Finland remain in second and third positions respectively, while Germany moves up two places (4th).
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By GlobalDataThe survey found that countries in southern Europe, such as Spain (35th), Italy (49th), Portugal (51st) and notably Greece (91st), continue to suffer numerous economic problems, including weakness in their financial markets and poor access to financing.
Of the five BRICS, the People’s Republic of China (29th) continues to lead the group, followed by South Africa (53rd), Brazil (56th) India (60th) and Russia (64th). Among the BRICS, only Russia improves its ranking, climbing three places, while Brazil drops eight places.
On India, the report said the country continues to be penalized for its very disappointing performance in the basic drivers underpinning competitiveness, the very ones that matter the most.
Asia is also home to some of the world’s least competitive economies, including Bangladesh (110th), Nepal (117th) and Pakistan (133rd), which drops for the third year in a row. Bhutan (109th), Lao PDR (81st) and Myanmar (139th) join the index for the first time.
Among the Asian economies, Malaysia ranked 24th, Indonesia jumped to 38th, making it the most improved of the G20 economies since 2006, while Korea (25th) declined by six places.
In the Middle East and North Africa, Qatar (13th) tops the region’s rankings, with the United Arab Emirates (19th) entering the top 20 for the first time. Saudi Arabia (20th) falls two places but remains among the top 20. Israel ranks 27th. Egypt (118th) drops a further 11 places on last year’s index. Bahrain (43rd), Jordan (68th) and Morocco (77th) also decline. Elsewhere in the region, Algeria moves up to 100th place and Tunisia re-enters the index at 83rd.
In sub-Saharan Africa, Mauritius (45th) overtakes South Africa (53rd) as the region’s most competitive economy. Kenya makes the biggest improvement, rising by ten places to 96th position. Nigeria (120th) continues to be ranked low, highlighting the need for it to diversify its economy. Chile (34th) continues to lead the regional rankings ahead of Panama (40th), Costa Rica (54th) and Mexico (55th), which all remain relatively stable.
Klaus Schwab, founder and executive chairman of the World Economic Forum, said: "Innovation becomes even more critical in terms of an economy’s ability to foster future prosperity. I predict that the traditional distinction between countries being ‘developed’ or ‘less developed’ will gradually disappear and we will instead refer to them much more in terms of being ‘innovation rich’ vs. ‘innovation poor’ countries.
"It is therefore vital that leaders from business, government and civil society work collaboratively to create education systems and enable environments which foster innovation."
Schwab has attributed the gains to improvements in U.S. financial markets and public institutions, two of 12 pillars on which the organization judges national competitiveness.
