The United States once again boasts the world’s most competitive economy, thanks to its vibrant entrepreneurial culture and capacity to innovate in ways that spur growth and opportunities.
That’s the judgment of the World Economic Forum, a Swiss nonprofit organization that has been ranking economies’ competitiveness for 40 years.
The United States moved ahead of last year’s Number 1, Switzerland, and into first place for the first time since 2008. The Swiss dipped to fourth on the competitiveness index, behind Singapore and Germany and ahead of Japan.
The forum, which convenes a gathering of world business and political leaders in Davos, Switzerland, each winter, rated 140 economies on 12 factors, among them institutions, market size, health, workers’ skills, infrastructure, business dynamism and innovation capability.
“Innovation has become an imperative for all advanced economies and a priority for a growing number of emerging countries,” the report says. The vast majority “are struggling to make innovation a meaningful engine of growth,” according to the report.
There “are only a few innovation powerhouses in the world, including Germany, the United States and Switzerland,” the report adds.
The forum altered the formula to place more emphasis this year on innovation, which it calls a critical driver of productivity and growth. “Governments are struggling to understand what makes a country innovative,” the report says.
Scores on the 0-to-100 competitiveness scale ranged from Chad’s 35.5 to the United States’ 85.6.
The United States and Europe are home to seven of the 10 most competitive economies; the three others are in Asia. Seventeen of the 20 countries at the bottom are in sub-Saharan Africa. That region’s best performer was 49th-ranked Mauritius.
High-income countries dominated the rankings. The only non-high-income economies in the Top 40 were those of Malaysia (25th), China (28th) and Thailand (38th).
Some countries with similar income levels were nonetheless far apart on the competitiveness of their economies. Chile ranked 33rd, while oil-rich Venezuela was 127th.