Saturday, September 10, 2011

United States Global Competitiveness

Ever wonder where that statistic comes from when a newspaper article states that the United States infrastructure has dropped to 16th in the world? These statistics come out of the Global Competitiveness Report produced each year by the World Economic Forum. The World Economic Forum has recently published its Global Competitiveness Report for 2011-2012. In the July 20, 2011 blog "Why so much discussion about the debt ceiling?" there was a discussion of the report and the differences between pre-recession rankings in 2007 and the rankings in the 2010 report. The previous blog is located in the July entries. The complete 2011-2012 report can be viewed at:


Directly quoting from the 2011-2012 report, their assessment of the United is as follows:
"The United States continues the decline that began three years ago, falling one more position to 5th place. While many structural features continue to make its economy extremely productive, a number of escalating weaknesses have lowered the US ranking in recent years. 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 labor markets and the scale opportunities afforded by the sheer size of its domestic economy—the largest in the world by far—these qualities continue to make the United States very competitive. On the other hand, there are some weaknesses in particular areas that have deepened since past assessments. The business community continues to be critical toward public and private institutions (39th).

In particular, its trust in politicians is not strong (50th), it remains concerned about the government’s ability to maintain arms-length relationships with the private sector (50th), and it considers that the government spends its resources relatively wastefully (66th). In comparison with last year, policy making is assessed as less transparent (50th) and regulation as more burdensome (58th). A lack of macroeconomic stability continues to be the United States’ greatest area of weakness (90th). Over the past decade, the country has been running
repeated fiscal deficits, leading to burgeoning levels of public indebtedness that are likely to weigh heavily on the country’s future growth. On a more positive note, after having declined for two years in a row, measures of financial market development are showing a hesitant recovery, improving from 31st last year to 22nd overall this year in that pillar."

Changes between 2007(pre-recession), 2010, and 2011.
 
Overall Competitiveness                   2007-1st      2010-4th       2011-5th
1. Trust in institutions                      2007-25th    2010-40th     2011-39th
2. Infrastructure                               2007-7th      2010-15th      2011-16th
3. Macroeconomics                         2007-66th    2010-87th    2011-90th
4. Health and Primary Education      2007-34th    2010-42nd    2011 42nd
5. Higher Education and Training      2007-5th     2010-9th       2011-13th
6. Goods Market Efficiency               2007-8th    2010-26th     2011-24th
7. Labor Market efficiency                 2007-1st    2010-4th       2011-4th
8. Financial Market Development      2007-9th    2010-31st     2011-22nd
9. Technological Readiness              2007-11th   2010-17th    2011-20th
10. Market Size                                2007-1st    2010-1st       2011-1st
11. Business Sophistication             2007-4th    2010-8th       2011-10th
12. Technical Innovation                   2007-1st    2010-1st         2011-5th 

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