European economies hold up in IMD competitiveness rankings
Despite the events of the sovereign debt crisis, the EU’s largest economies have retained their competitiveness, analysis from the Swiss business school IMD has suggested.
The IMD World Competitive Yearbook rankings measured 59 economies on how well countries manage their economic and human resources to increase their prosperity. The US and Hong Kong continue to lead the world in competitiveness, while emerging markets have slipped.
According to the WCY, the most competitive nations in Europe are Switzerland (3), Sweden (5), Norway (8) and Germany (9), which have export-oriented manufacturing and fiscal discipline. Other European countries in the top 20 are the Netherlands (11), Luxembourg (12), Denmark (13), Finland (17), the UK (18) and Ireland (20). Meanwhile, Iceland (26), France (29) and Italy (40) look better equipped to bounce back than Spain (39) and Portugal (41). The least competitive European country is Greece (58).
The EU’s four largest economies have held or improved their rankings against last year, with Germany up one place from 10th, France maintaining its position at 29, the UK moving up two places to 18 and Italy up two places at 40. However Spain, the fifth biggest economy has dropped from 35 to 39.
Meanwhile, emerging economies remain vulnerable to turmoil worldwide, with China (23), India (35) and Brazil (46) all having slipped in the rankings. All Asian economies have declined apart from Hong Kong, Malaysia (14) and Korea (22). Latin America saw every nation falling except Mexico (37).
Stephane Garelli, director of IMD’s World Competitiveness Centre said: “The recession has made the world economy more fragmented and diverse than ever, forcing companies to operate several parallel business models. Emerging economies are relying on domestic demand and national champion companies to insulate themselves from economic turmoil, while the “submerging” developed economies are turning to re-industrialization. In both cases, economic nationalism is back and protectionism is tempting.”