competitiveness: top five nations last decade and...
TRANSCRIPT
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International Journal of Business and Management Studies,
CD-ROM. ISSN: 2158-1479 :: 1(3):391–412 (2012)
Copyright c© 2012 by UniversityPublications.net
COMPETITIVENESS: TOP FIVE NATIONS LAST DECADE AND NEXT
DECADE
Mark Kam-Loon Loo
Concordia University College of Alberta, Canada
This paper investigates the top five nations in global competitiveness in the last decade from
2000 to 2009 based on the Global Competitiveness Index by the World Economic Forum and
the World Competitiveness Yearbook by the Institute of Management Development. Next it
seeks to forecast the top five nations in the next decade from 2010-2019 based on the
performance trends from the two sources. Finally, this paper discusses the factors for the
success of these nations and suggests recommendations to enhance their global
competitiveness.
Keywords: Global competitiveness report, World economic forum, World competitiveness
yearbook, Global rankings, Competitiveness index.
Objective
Global competitiveness is the study of the factors that influence a nation!s environment which
ultimately affects the ability of its businessesto compete nationally and internationally. The
primary objective of this study is to identify the five most competitive nations in the last decade
and forecast the five most competitive nations for the next decade. The secondary objective is to
identify the specific factors that contribute to the top five nations! competitiveness.
Literature Review
The two most authoritative sources on global competitiveness are the World Economic Forum's
(WEF) Global Competitiveness Report (GCR) and the Institute of Management Development's
(IMD) World Competitiveness Yearbook (WCY). The WEF released its first report on global
competitiveness in 1979 and the IMD in 1988.
Definition of Global Competitiveness
The WEF and IMD are both Switzerland-based institutions. Both organizations use macroand
microeconomic concepts to study the efficiency of the government and private sectors as well as
infrastructure that shape a nation's competitiveness.
The difference lies in their approaches via their definitions and hence, measurement of
global competitiveness (Phiromswad, Srivannaboon, Fujiokaand Hoontrakul, 2010).The WEF
equates competitiveness with productivity that sets a sustainable level of prosperity that a
country may achieve, while the IMD equates competitiveness with a combination of
competencies in economic growth and mindset in value-added areas.
391
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392 Mark Kam-Loon Loo
The WEF defines national economic competitiveness as “the set of institutions, policies and
factors that determine the level of productivity of a country”, which in turn, affects the rate of
return on investment and rate of output growth. (Aridas and Magno, 2011).The WEF measures
the sustainable current and medium term levels of economic prosperity of each nation through 12
pillars of global competitiveness (Garelli, 2011). The WEF’s Global Competitiveness Report
(GCR) releases the annual Global Competitiveness Index (GCI) that awards a rank to each of the
12 pillars and culminating in the rank of the nation.
The IMD defines national economic competitiveness as “how a nation manages the totality
of its resources and competencies to increase the prosperity of its people.” (Aridas and Magno,
2011) The IMD analyzes national policies that create and maintain an environment that sustains
more value creation and long-term sustainability for its enterprises and thus, promote more
prosperity for its people(Garelli, 2011). The IMD’s World Competitiveness Yearbook (WCY)
releases the annual rankings of nations based on four key measurements.
The difference can be further clarified from the objectives explained by the leaders from
both organizations.
The GCI provides a sense why some countries have been better at providing high and rising
living standard to their citizens than others (Dr. Jennifer Blanke, WEF, 2011), while the WCY
focuses on how nations and enterprises manage the totality of their competitiveness to achieve
long-term prosperity (Dr. Suzanne Rosselet, IMD, 2011). This implies that while the WEF
focuses on the government’s role in providing a rising living standard to their citizens, the IMD
suggests collaboration between governments and enterprises to manage resources to achieve
sustainable progress.
In the interest of the scholar, while the GCR’s full report is freely available
online,thecomplete WCY results are only available through purchase. The WCY releases the
ranking of nations and the summated performance in the four main measurements freely online
but the rest have to be purchased.
Measurement Differences between WEF and IMD
The key differences in measurement between the two research organizations can be summarized
in Table 1 below based on the WEF’s Global Competitiveness Report 2011/2012 and IMD’s
World Competitiveness Yearbook 2011.
Table 1. A comparison of global competitiveness methodology between WEF and IMD:
Item WEF 2011/2012 First report: 1979
IMD 2011
First report: 1988
Primary Data:
Executive Opinion
Surveys (EOS)
13,395 EOS
Over 15,000 surveys
Median 98 per country
4,935 EOS
150 Partner Institutes*
142 countries
54 Partner Institutes*
59 countries
Secondary Data
(SD)
UNESCO, IMF & WHO** Various public literature sources
Measurements 12 Pillars: 111 Indicators 5 Factors: 331 Criteria
Data Analysis 2/3 EOS & 1/3 SD 1/3 EOS & 2/3 SD
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Competitiveness: Top Five Nations Last Decade and Next Decade 393
Strength Up-to-date perceptions and forward-looking
indicators that reflect voices of opinion
leaders in business and other stakeholders
More emphasis on indicators from varying
independent sources, so it manages to reveal
more about objectivepast performance
*Recognized economic departments f national universities, independent research institutes or business organizations.
**UNESCO: United Nations Educational, Scientific and Cultural Organization; IMF: International Monetary Fund;
WHO: World Health Organization
As shown in Table 1, the WEF and IMD rely on primary and secondary (or hard) data to
determine the competitiveness of nations.
While both the WEF and IMD conduct executive opinion surveys in the nations studied,
WEF’s sample numbers 15,000 top management executives while IMD surveys nearly 5,000 top
and middle managementexecutives representing a cross-section of the business community.Thus,
WEF’s sample size is three times larger than IMD’s.
Both employ partner institutes that include leading research institutes and business
organizations to help execute the surveys. WEF's collaborates with a larger network of
institutions totaling 150 while IMD engages 54 partner institutes. Again, WEF’s number of
partners is nearly three times IMD’s partners.
The WEF country sample numbers 142, nearly three times larger than IMD’s 59 countries,
suggesting that the WEF undertakes a wider global study than the IMD. In WEF’s executive
opinion survey, the median is 98 per country.
Both the WEF and IMD gather secondary or hard data from publicly available sources such
as the United Nations on population and International Monetary Fund on Gross Domestic
Product. The difference in data analysis lies in their formulation of the ratio between primary
and secondary data sources to yield their respective desired results. WEF results are based on
two-thirds of the primary research survey and one-third hard data, while the IMD is reversed,
one-third executive opinion survey and two-thirds hard data.
Thus, WEF places 66.6% weight on the Executive Opinion Survey, seeking to collect
qualitative data not covered by quantitative data from public sources.On the other hand, the WEF
places 66.6% weight on hard data of statistical indicators acquired frominternational, national
and regional organizations as well as private institutions.
The strength of the WEF’s methodology lies in the up-to-date perceptions and forward-
looking indicators that reflect the voices of opinion leaders in business and other stakeholder,
while the IMD emphasizes more on the indicators from varying independent sources and thus,
reveals more about objective past performance.
In terms of evaluating global competitiveness, the WEF measures 111 indicators that form
12 pillarswhile the IMD evaluates 331 criteriacategorized in four main factors as shown in
Table 2.
Table 2. Differences in measurement between WEF and IMD
WEF 2011-2012 Indicators IMD Criteria
Institutions 21
Economic Performance 78 Infrastructure 9
Macroeconomic Environment 6
Health and primary education 10 Government Efficiency 71
Higher education and training 8
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394 Mark Kam-Loon Loo
Goods and market efficiency 16
Labour market efficiency 9
Business Efficiency 68 Financial market development 8
Technological readiness 6
Market size 2
Infrastructure 114 Business sophistication 9
Innovation 7
Total 111 Total 331
Source: Global Competitiveness Report 2011/12 and World Competitiveness Yearbook 2011
The WEF researchers evaluate economies by the 12 pillars to construct a weighted Global
Competitive Index that determines their rank. The pillars of competitiveness relate to three
stages of economic development (Sala-I-Martin, 2011) as shown in Figure 1.
Figure 1. WEF’s Three Stages of Economic Development and 12 Pillars of Competitiveness Source: Global
Competitiveness Report 2011-2012
The following briefly defines each of the 12 pillars of competitiveness (Grammy, 2011):
• Institutions: Legal and administrative framework within which individuals, forms and
governments interact to generate wealth.
• Infrastructure: Effective modes of transportation and communication, including quality
roads, railroad, ports, airports, utility supplies and telecommunication networks.
• Macroeconomic Environment: Stability and predictability in economic activity based on
optimal levels of regulation and taxation for private firms to create employment manage
production and make profit.
• Health and Primary Education: A healthy, literate and cultured workforce supporting
production of goods and services in an efficient manner.
• Higher Education and Training: A pool of well-educated and skilled workers who are able to
adapt rapidly to a changing environment and evolving needs of the production system.
• Goods Market Efficiency: Market competition, both domestic and foreign, to facilitate a
proper balance between demand and supply with minimal public regulations.
Stage 1: Factor Driven
Economies
Stage 2: Efficiency Driven
Economies
Stage 3: Innovation
Driven Economies
Basic Pillars (weight 20%)
1. Institutions
2. Infrastructure
3. Macroeconomic
Environment
4. Health & Primary Education
Efficiency Pillars (weight 50%)
5. Higher Education & Training
6. Goods Market Efficiency
7. Labour Market Efficiency
8. Financial Market Development
9. Technological Readiness
10. Market Size
Innovation and
Sophistication Pillars(weight
30%)
11. Business Sophistication
12. Innovation
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Competitiveness: Top Five Nations Last Decade and Next Decade 395
• Labour MarketsEfficiency: Efficiency of labour markets to allocate workers to their optimal
employment positions and provide them with incentives to give their best effort.
• Financial Markets Development: Efficiency of financial markets to allocate domestic and
foreign savings to provide entrepreneurial and investment projects based on expected rates of
return rather than political connections.
• Technological Readiness: Agility with which an economy adopts existing technologies to
enhance productivity, with full capacity to leverage information and communication
technologies in production processes for increased efficiency and competitiveness.
• Market Size: Expanding market size allowing firms to exploit economies of scale with
regional and international markets complementing domestic markets.
• Business Sophistication: Sophisticated business practices conducive to efficiency and based
on the quality of overall business networks and sustained profitability.
• Innovation: Invention and innovation made possible by substantial investment in research
and development to create new products and offer better methods of production and
distribution.
These pillars are weighted to best represent the needs of the nation being measured in terms of
competitiveness. Pillars 1 to 4 are weighted 20%. They form the basic requirements for
development in nations whose economies are factor-driven. These nations compete based on
factor endowments, such as human and physical capital, natural resources and trade location.
Their businesses produce labour intensive products and compete on price. Maintaining
competitiveness at this stage of development hinges primarily on well-functioning public and
private institutions, developed infrastructure, stable macroeconomic environment and healthy
workforce with a minimum of primary education.
Pillars 5 to 10 are described as efficiency enhancers of development and they are weighted
at 50%. Economies become more competitive, increasing productivity and paying higher wages.
Economies move into the efficiency driven stage of development when they market capital
intensive products and compete internationally on price and quality. Competitiveness is
increasingly driven by higher education and training, efficient goods market, well-functioning
labour markets, developed financial markets, advance technology and expanding market size.
Pillars 11 to 12 describe the innovation and sophistication stage of development, and they
are weighted 30%. Economies enter the innovation driven stage when they pay high wages and
provide a high standard of living. Their businesses compete by developing new and unique
products using and investing heavily in sophisticated production processes.
Economic Performance
1. Domestic Economy
2. International Trade
3. International
Investment
4. Employment
5. Prices
Business Efficiency
1. Productivity
2. Labour Market
3. Finance
4. Management Practices
5. Attitudes and Values
Government Efficiency
1. Public Finance
2. Fiscal Policy
3. Institutional Framework
4. Business Legislation
5. Societal Framework
Infrastructure
1. Basic
2. Technological
3. Scientific
4. Health & Environment
5. Education
Figure 2. IMD’s Four Main Factors for Measurement Source: World Competitiveness Yearbook 2011
As seen from Figure 2, the IMD’s methodology for its World Competitiveness Yearbook
divides the national environment into four main factors, each with five sub-factors:
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396 Mark Kam-Loon Loo
Economic Performance: domestic economy, international trade, international investment,
employment, prices
Government Efficiency: public finance, fiscal policy, institutional framework, business
legislation, societal framework
Business Efficiency: productivity, labour market, finance, management practices,
attitudes and values
Infrastructure: basic infrastructure, technological infrastructure, scientific
infrastructure, health and environment, education
The 20 sub-factors comprise a total of 331 criteria to calculate the overall competitiveness
ranking. These criteria emphasize the market’s support for entrepreneurship and ability to attract
investment.
Which measurement is better?
Many developing nations suffer from the annual fluctuations in their competitiveness ranking.
For example, in the 2010 rankings, while Thailand was placed 26th
among 59 countries in the
IMD measurement, it fell two spots from 36th
to 38th
among 139 economies in the WEF report.
The fall in rankings of a nation can give room to critics to raise discontent against the ruling
government. The Thai government would be happier with the IMD than the WEFrankings,
especially in the aftermath of a period of domestic political instability (Limsamarnphun, 2010).
The situation becomes even more controversial when a significant difference exists between
the two measurements. Thailand has slipped 10 places in the WEF yardstick since 2006.
However, it is favourably ranked with the IMD at 26th
in 2010 and 2009, improving from 27th
in
2008 and 33rd
in 2007. While the Thai government can be criticized for failing by WEF
standards, it can defend that it has progressed since 2007 by IMD’s measurements. However, the
WEF places Thailand in a more competitive position in the top 27% compared to the IMD’s
position among the 44%.
So which measurement should governments, enterprise and scholars believe?
Methodology
The WEF and IMD are the two most authoritative measurements of global competitiveness and
no government can afford to ignore either - even if one may not be as politically convenient as
the other. Hence, despite their differences, both measurements are employed in this study. The
issue lies in reconciling the differences between the two measurements to form a credible
measurement for the Top 5 nations.
Figure 3 recapitulates the weights assigned by WEF and IMD to primary and secondary
data. The WEF assigns 2/3 of weight to primary data from executive opinion surveys and 1/3 to
secondary or hard data. The IMD assigns 1/3 of weight to executive opinion surveys and 2/3 to
hard data sources. Since the difference lies in the exact ratio reversal, the “truth” should lie in
between both findings given the reliable and impartial research conducted by these two world-
class organizations. Thus, this study takes into consideration both results and the identification
of the Top 5 nations is based on averaging the sum of rankings by these two organizations.
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Competitiveness: Top Five Nations Last Decade and Next Decade 397
Data WEF IMD
Primary: EOS 2/3 1/3
Secondary 1/3 2/3
Figure 3. Calculating the rank of nations in global competitiveness
There are at least four issues that need clear definitions to identify the Top 5 nations in
global competitiveness in the last decade and the next decade:
• The last decade is defined as between the years 2000 and 2009 and the next decade is defined
as between 2010 and 2019.
• Consistency in global competitiveness rankings over a period of time is vital to justify the
Top 5 nations.
• The Top 5 nations in global competitiveness in the last decade are determined from the
rankings by both the WEF and IMD from 2000 to 2009. .
• The Top 5 nations in the next decade are forecasted based on the progress of the measured
indicators in the global competitiveness rankings by both the WEF and IMD in the last five
years from 2007 to 2011.These nations must demonstrate progress in higher ranking or the
ability to maintain their position among the Top 5 in both the WEF and IMD measurements.
Tables 3 and 4 below show six most competitive nations and thus, identified the Top 5 from
the WEF and IMD rankings.
Table 3. Determining the Top 5 Most Competitive Nations Last Decade based on WEF rankings
Country/WEF 2000 2001 2002 2003 2004 2005 2006/7 2007/8 2008/9 2009/10 Average Rank
U.S.A 1 2 1 2 2 2 1 1 1 2 1.5 1
Finland 5 1 2 1 1 1 6 6 6 6 3.5 2
Singapore 2 4 4 6 7 6 8 7 5 3 5.2 3
Sweden 12 9 5 3 3 3 9 4 4 4 5.6 4
Switzerland 9 15 6 7 8 8 4 2 2 1 6.2 5
Denmark 13 14 10 4 5 4 3 3 3 5 6.4 6
Source: Global Competitiveness Reports from 2000 to 2009/10, World Economic Forum
WEF Rankings
IMD Rankings
Average of
WEF + IMD
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398 Mark Kam-Loon Loo
Table 4. Determining the Top 5 Most Competitive Nations Last Decade based on IMD rankings
Country/IMD 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Average Rank
U.S.A 1 1 1 1 1 1 1 1 1 1 1 1
Singapore 2 2 5 4 2 3 3 2 2 3 2.8 2
Hong Kong 12 6 9 10 6 2 2 3 3 2 5.5 3
Luxembourg 6 4 3 2 9 10 9 4 5 12 6.4 4
Canada 8 9 8 6 3 5 7 10 8 8 7.2 5
Denmark 13 15 6 5 7 7 5 5 6 5 7.4 6
Source: World Competitiveness Yearbook from 2000 to 2009, Institute of Management Development
Tables 3 and 4 show WEF and IMD ranked USA and Singapore among the Top 5 in the last
decade from 2000 to 2009.USA ranks 1stin both measurements while Singapore ranks 3rd
in WEF
but 2nd
in IMD. Finland, Sweden and Switzerland are also in the WEF Top 5 but rank 7th
, 11th
and 8th
respectively in IMD.Likewise, Hong Kong, Canada and Luxembourgare in the IMD Top
5 but rank 15th
, 9th
and 23rd
in WEF (Luxembourg was listed in WEF from 2003). The
differences in the rankings of nations between the two measures were expected. As stated earlier,
to minimize the gap between the two, the Top 5 will be determined by averaging the sum of the
two measures. This would involve listing the most competitive nations from both lists until a
clear confirmation of the top 5 can be established as shown in Table 5.
Table 5. Top 5 most competitive nations based on averages between WEF and IMD rankings
Country WEF
Average Rank
IMD
Average Rank
WEF + IMD
Average Rank Rank
USA 1.5 1 1 1 1.25 1
Singapore 5.2 3 2.8 2 4 2
Finland 3.5 2 7.7 7 5.6 3
Denmark 6.4 6 7.4 6 6.9 4
Switzerland 6.2 5 7.7 7 6.95 5
Sweden 5.6 4 10.8 11 8.2 6
Canada 10.6 9 7.2 5 8.9 7
Netherland 10 8 9.6 10 9.8 8
Hong Kong 15.4 15 5.5 3 10.45 9
Australia 12.5 14 8.7 9 19.6 10
Source: Developed by author for this paper based on data from WEF and IMD reports from 2000 to 2009.
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Competitiveness: Top Five Nations Last Decade and Next Decade 399
Results
Top 5 Last Decade 2000-2009
The results in Table 5 shows the Top 5 nations in global competitiveness in the last decade 2000
to 2009, from 1st to 5
th, are USA, Singapore, Finland, Denmark and Switzerland. Denmark may
be a surprise 4th
place but it had been a consistent performer at 6th
place in both the WEF and
IMD rankings in the last decade, ousting other nations that had suffered fluctuations in their
rankings.
Sweden was ranked 4th
in the WEF is now ranked 6th
in this analysis that considered IMD’s
reports. Hong Kong, Luxembourg and Canada were ranked 3rd
, 4th
and 5th
in the IMD list but
only Hong Kong stays as 9th
and Canada 7th
while Luxembourg is out of the top 10 list.
Top 5 Next Decade 2010-2019
Predicting the five most competitive nations in the next decade will be based on the progress of
nations in global competitiveness in the last five years, between 2007 and 2011. The rankings in
the last five years will give an indication of the ability of the nations to achieve or maintain
within the Top 5 in global competitiveness. Nations that qualify for the Top 5 should
demonstrate consistency in rank progress in both the WEF and IMD measures.
If progress is judged based on year by year improvements, there will be fluctuations as many
nations go and up down one or two positions each year. One way to measure progress is by
comparing their average rankings between two periods: 2007-2011 and 2009-2011. If the last
three years produce a better rank than the last five years, it would be a predictor of indicate
progress. Again, the rank is calculated based on the WEF and IMD findings and a sufficient
number of nations have to be investigated until the Top 5 are clearly established. Appendices 1, 2
and 3 show systematically how the five most competitive nations are identified from the WEF
and IMD reports in the last five and three years respectively..
The findings from Appendices 1, 2 and 3 are summarized in Table 6 which shows the
averages of rankings between WEF and IMD in the last decade 2000-2009, in the last five years
2007-2011 and in the last three years 2009-2011.
Table 6. Top 5 Nations in Global Competitiveness in Last 5 and 3 Years
Country 10 Years
Country 5 Years
Country 3 Years
2000-2009 2007-2011 2009-2011
USA 1 USA 1 Singapore 1
Singapore 2 Switzerland 2 Switzerland 1
Finland 3 Singapore 3 USA 3
Denmark 4 Sweden 4 Sweden 4
Switzerland 5 Denmark 5 Denmark 5
Sweden 6 Canada 6 Canada 6
Canada 7 Netherlands 7 Finland 7
Netherlands 8 Finland 8 Netherlands 7
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400 Mark Kam-Loon Loo
Table 6 shows the Top 5 most competitive nations from 1st to 5
th place from:
• 2000-2009: USA, Singapore, Finland, Denmark and Switzerland
• 2007 to 2011: USA, Switzerland, Singapore, Sweden and Denmark
• 2009 to 2011: Singapore, Switzerland, USA, Sweden and Denmark
The results show that while USA slipped to 3rd
rank in the last three years, Switzerland and
Singapore have progressed to displace USA as 1st rank in the last three years. Switzerland
moved from 2nd
to 1st rank while Singapore has made the most significant progress from 3
rd to
tying with Switzerland at 1st rank.
Table 6 also shows that while the Top 5 winners maintained their position consistently in the
last five and three-year periods, visibly missing is Finland which was ranked 3rd
in the last
decade but now fallen to rank 7th.
Sweden instead has a made a commendable comeback from
rank 6th
in the last decade to rank 4th
in both time periods. Other nations that may vie for a spot in
the Top 5 next decade include Canada that has improved from rank 7th
last decade to rank 6th
and
Netherlands from rank 8th
last decade to rank 7th
.
Changes are also evident in the rankings of the Top 5 between the WEF and IMD findings
over the two time periods.While the IMD maintains USA as rank 1st, the WEF finds that USA
had slipped to 2nd
place in 2009, 4th
in 2010 and 5th
in 2011 signifying an unprecedented decline
in global competitiveness for the most powerful nation in the world. Singapore, a small nation in
physical size, ranked 3rd
in the last five years has made giant strides to tie at rank 1st with
Switzerland in the last three years.
Given the trend that even formidable nations such as the USA can decline in global
competitiveness, Canada, Finland and the Netherlands have strong potential to become the top 5
nations in the next decade. As for now, the performance of nations in the last 5 and 3 years
compared seem to favour Singapore, Switzerland, USA, Sweden and Denmark in the top 5 most
competitive nations in the world.
What are the secrets of success for these five most competitive nations? .
Discussion
The factors of success for the Top 5 nations in global competitiveness will be discussed in
ascending order from rank 5th
to 1st.
The information in the tables below is sourced from the
WEF’s Global Competitiveness Reports (GCR) from 2007 to 2011. The numbers represent the
rank that each nation achieved in the 12 pillars of competitiveness. The rank within the (bracket)
represents the rank of the average performance of competitiveness over the last five years to
meet the criteria of consistency.
Only the pillars that attained an average rank from 1 to 5.9 are discussed as they represent
the Top 5 positions in each measurement of competitiveness. As it is an average rank from the
summated performance over the past five years, a nation that has the best consistent performance
may not necessarily have a perfect score of 1.
There are many items of measurement to form a pillar of competitiveness. Only the items
that gained 1strank will be outlined to focus on each nation’s most notable strength in the specific
pillar of competitiveness, otherwise there will be an overly long list of achievements for the
purpose of this paper.
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Competitiveness: Top Five Nations Last Decade and Next Decade 401
5th
Most Competitive: Denmark
Denmark achieved 4th
place in the last decade but dropped by one position to 5th
in the last 5 and
3 years. Table 7 below shows Denmark’s rankings in the 12 pillars of competitiveness in the last
five years. The last row in Table 7 shows the average performance in the last five years.
Table.7. Denmark’s rankings in 12 Pillars of Competitiveness between 2007 and 2011
Den
mar
k
Subindexes
Basic requirements Efficiency enhancers
Innovation and
Sophistication factors
Ran
k
Inst
itu
tio
ns
Infr
astr
uct
ure
Mac
roec
on
om
ic
stab
ilit
y
Hea
lth a
nd p
rim
ary
edu
cati
on
Ran
k
Hig
her
ed
uca
tion
an
d
trai
nin
g
Go
od
s m
ark
et
effi
cien
cy
Lab
ou
r m
arket
effi
cien
cy
Fin
anci
al m
arket
dev
elopm
ent
Tec
hn
olo
gic
al
read
ines
s
Mar
ket
siz
e
Ran
k
Busi
nes
s
sop
his
tica
tio
n
Inn
ov
atio
n
2011/12 8 5 10 31 28 9 6 16 6 17 4 53 8 6 10
2010/11 7 5 13 16 20 9 3 13 5 18 6 52 9 7 10
2009/10 4 3 12 14 6 6 2 7 5 8 4 49 7 8 10
2008/09 4 3 8 12 4 3 2 4 5 4 3 46 7 5 10
2007/08 1 2 7 10 3 4 3 3 5 6 5 45 8 6 10
Average 4.8 3.6 10 16.6 12.2 6.2 3.2 8.6 5.2 10.6 4.4 49 7.8 6.4 10
Source: Global Competitiveness Report 2011-2012, World Economic Forum
The average rankings show that Denmark stays within the Top 5 in Basic Requirements at
4.8 but outside Top 5 in Efficiency Enhancers at 6.2 and Innovation and Sophistication factors at
7.8.
Table 7 also shows Denmark has four pillars with Top 5 rankings:
• Higher Education and Training (3.2): Denmark invests 7.8% of its GDP in secondary and
post-secondary education, and job training and employee development (Central Intelligence
Agency, 2011).It has a high rate of enrolment in secondary and post-secondary educational
institutions but if citizens lack formal education, Denmark's companies provide on the job
training and employee development. This combination of a strong education system and
excellent job training has resulted in a highly productive, well-educated and stable labour
market (Schwab, 2011).
• Institutions (3.6): Denmark is ranked 1st in two areas - lowest cost of business affected by
organized crime, and ethical behaviour of firms.
• Technological Readiness (4.4): The 2011/12 Global Competitiveness Index shows Denmark
at 3rd
place with a score of 6.2 of 7, narrowly beaten by Switzerland and Sweden both at 6.3.
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402 Mark Kam-Loon Loo
Among the Top 5 Nations, Denmark invests 3.02% of GDP in research and development
behind Sweden and Switzerland (World Bank, 2012; Appendix 4)..
• Labour Market Efficiency (5.2): Denmark is ranked 1st in two areas – hiring and firing
practices, and lowest redundancy costs in weeks of salary.Although Denmark is ranked 10 in
Infrastructure, it has the best quality of electricity supply and 7.4 million mobile
subscriptions for 5.53 million people (Global Competitiveness Report 2011-2012).
4th
Most Competitive: Sweden
Sweden achieved 6th
place in the last decade but climbed to 4th
placein the last five and three
years. Table 8 shows that Sweden stays in the Top 5 in Innovation and Sophistication at 4th
and
Basic Requirements at 5th
but outside the Top 5 in Efficiency Enhancers at 7.2th
.
Table 8. Sweden’s rankings in 12 Pillars of Competitiveness between 2007 and 2011
Sweden
Subindexes
Basic requirements Efficiency enhancers Innovation and
Sophistication factors
Ran
k
Inst
itu
tio
ns
Infr
astr
uct
ure
Mac
roec
on
om
ic
stab
ilit
y
Hea
lth a
nd p
rim
ary
edu
cati
on
Ran
k
Hig
her
ed
uca
tion
an
d
trai
nin
g
Go
od
s m
ark
et
effi
cien
cy
Lab
ou
r m
arket
effi
cien
cy
Fin
anci
al m
arket
dev
elopm
ent
Tec
hn
olo
gic
al
read
ines
s
Mar
ket
siz
e
Ran
k
Busi
nes
s
sop
his
tica
tio
n
Inn
ov
atio
n
2011/12 4 2 13 13 18 7 2 7 25 11 2 31 2 2 2
2010/11 4 2 10 14 18 5 2 5 18 13 1 34 3 2 5
2009/10 5 2 14 15 12 7 3 4 19 12 1 32 4 4 5
2008/09 6 4 13 15 8 9 3 7 26 8 2 30 6 7 5
2007/08 6 6 12 17 5 8 2 7 37 9 1 34 5 4 6
Average 5.0 3.2 12.4 14.8 12.2 7.2 2.4 6.0 25.0 10.6 1.4 32.2 4.0 3.8 4.6
Source: Global Competitiveness Report 2011-2012, World Economic Forum
Sweden has five pillars with average Top 5 rankings, one above Denmark:
• Technological Readiness (1.4): Sweden ranks 1st in availability of latest technologies and
firm-level technology absorption.
• Higher Education and Training (2.4): Sweden spends about 6.6% of GDP on education and
as a result, Sweden boasts a 99% literacy rate (Central Intelligence Agency, 2012).
• Institutions (3.2): Sweden ranks 1st in three areas - no favouritism in decisions of government
officials, efficacy of corporate boards and protection of minority shareholders’ interests.
• Business Sophistication (3.8): Sweden is ranked 1st in two areas – firms use sophisticated
business tools and techniques, and willingness to delegate authority.
-
Competitiveness: Top Five Nations Last Decade and Next Decade 403
• Innovation (4.6): Sweden leads the Top 5 nations in research and development investment
with 3.62% of GDP (World Bank, 2012; Appendix 4). Sweden boasts of world famous
multinational firms such as Ikea, Volvo and Ericsson Telecommunications. The world pays
tribute to Sweden’s ability to detect radioactivity that led to the discovery of the Chernobyl
disaster in 1986.
Although Sweden ranks 6th
in GoodsMarket Efficiency, it earns top position in effectiveness of
anti-monopoly policies in that pillar.Similarly, though it ranks 25th
in LabourMarket Efficiency,
it ranks 1stin reliance on professional management in that category.
3rd
Most Competitive: The United States of America
The USA ranked 1stin the last decade but dropped to rank 3
rd in the last three years. If its
competitiveness continues to slide, the USA may lose its place in the top 5 in the next decade.
Although the USA has ranked 6th
in 2006/07, it has consistently maintained 1st or 2
ndrank until
recent years when it slipped to 4th
in 2010/11 and 5th
in 2011/2012.
Table 8 shows that the USA has a strong lead in Efficiency Enhancers at 1.8, an enviable
position at 3.2 in Innovation and Sophistication factors but significantly weaker than the other
Top 5 nations in Basic Requirements at 28.2.
Table 9. The USA’s rankings in 12 Pillars of Competitiveness between 2007 and 2011
USA
Subindexes
Basic requirements Efficiency enhancers
Innovation and
Sophistication
factors
Ran
k
Inst
itu
tio
ns
Infr
astr
uct
ure
Mac
roec
on
om
ic s
tab
ilit
y
Hea
lth a
nd p
rim
ary
edu
cati
on
Ran
k
Hig
her
ed
uca
tion
an
d
trai
nin
g
Go
od
s m
ark
et e
ffic
ien
cy
Lab
ou
r m
arket
eff
icie
ncy
Fin
anci
al m
arket
dev
elopm
ent
Tec
hn
olo
gic
al r
ead
ines
s
Mar
ket
siz
e
Ran
k
Bu
sin
ess
sop
his
tica
tio
n
Inn
ov
atio
n
2011/12 36 39 16 90 42 3 13 24 4 22 20 1 6 10 5
2010/11 32 40 15 87 42 3 9 26 4 31 17 1 4 8
2009/10 28 34 8 93 36 1 7 12 3 20 13 1 1 5 1
2008/09 22 29 7 66 34 1 5 8 1 9 11 1 1 4 1
2007/08 23 33 6 75 34 1 5 12 1 11 9 1 4 7 1
Average 28.2 35 10.4 82.2 37.6 1.8 7.8 16.4 2.6 18.6 14 1 3.2 6.8 2
Source: Global Competitiveness Report 2011-2012, World Economic Forum
-
404 Mark Kam-Loon Loo
Table 8 shows that USA only Top 5 rankings in three pillars, behind Denmark and Sweden
with four and five pillars respectively. Nevertheless, the three pillars have been well maintained
and should continue to remain strong if the USA rebounds from the recession and its associated
subprime market conditions.
• Market size (1):The USA has the highest Gross Domestic Product (GDP) at $14,658 million,
far ahead of the second highest nation, China at $10,086 million. It has the largest domestic
population with purchasing power, providing the base for American firms to incubate and
perfect business processes before going abroad. Thus, it also boasts of the largest
international market, exporting $1.3 trillion in goods and services in 2010 (Central
Intelligence Agency, 2012). With huge domestic consumption and world markets, US firms
are able to compete on a larger scale than most firms in other nations.
• Innovation (2): The USA excels in two types of innovation: technology and marketing. One
clear competitive advantage over the last two decades has been its ever expanding capacity
for technological innovations. From IBM to Apple and Windows to Yahoo and Google to
Facebook and Twitter, the USA leads in the cyber world of communication and
entertainment. While it is important to generate new products, the ability to market products
globally is equally important. The USA is undisputedly the world’s leader in marketingand
advertising (Bhide, 2009). USA is 4th among the Top 5 in investment in research and
development with 2.79% GDP, behind Sweden, Switzerland and Denmark (world Bank,
2012; Appendix 4)
• Labour market efficiency (2.6): The USA is competitive attracting and retaining talent from
around the world to continuously help to enhance the quality of scientists, engineers and
educational institutions to fuel the growth of innovation (Schwab, 2011). It has 27% of the
world’s largest 500 corporations (Fortune, 2011) that offer employees the best cutting edge
technologies to compete internationally (Bhide, 2009).
Although the USA has an average rank of 10.4 in Infrastructure, its logistical systems are
massive. It has the highest scheduled available airline seat kilometer per week at 32,086, three
times higher than the nearest competitor, China at 10,157. It has the highest number of airports
at 15,097 compared to the second highest, Brazil at 4.072. It also boasts of the world’s longest
developed roadway at 6.5 million kilometers and railway at 224, 792 kilometers(Central
Intelligence Agency, 2012).
1st in Global Competitiveness: Switzerland and Singapore
In the last decade 2000-2009, Switzerland was placed 5thwhile Singapore was 2nd. However, in
the last five years 2007-2011, Switzerland progressed to 2nd rank while Singapore slipped to 3rd
place. In the last three years 2009-2011, Singapore climbed to tie with Switzerland in 1st rank.
Switzerland
Switzerland has been incredibly competitive over the past decade. They have outperformed the
average level of performance among developed nations in almost all pillars of competitiveness.
Overall, Switzerland maintains Top 5 positions in Innovation and Sophistication at 1.8, Basic
Requirements 2.8 and Efficiency Enhancers at 4.8 as shown in Table 10.
-
Competitiveness: Top Five Nations Last Decade and Next Decade 405
Table 10. Switzerland’s rankings in 12 Pillars of Competitiveness between 2007 and 2011
Year
Subindexes
Basic requirements Efficiency enhancers
Innovation and
Sophistication
factors
Ran
k
Inst
itu
tio
ns
Infr
astr
uct
ure
Mac
roec
on
om
ic s
tab
ilit
y
Hea
lth a
nd p
rim
ary
ed
uca
tio
n
Ran
k
Hig
her
ed
uca
tion
an
d t
rain
ing
Go
od
s m
ark
et e
ffic
ien
cy
Lab
ou
r m
arket
eff
icie
ncy
Fin
anci
al m
arket
dev
elop
men
t
Tec
hnolo
gic
al r
eadin
ess
Mar
ket
siz
e
Ran
k
Busi
nes
s so
phis
tica
tion
Inn
ov
atio
n
2011/12 3 6 5 7 8 2 3 5 1 7 1 39 1 3 1
2010/11 2 7 6 5 7 4 4 4 2 8 7 36 2 4 2
2009/10 3 8 5 17 21 3 6 5 2 14 3 36 3 3 2
2008/09 2 5 3 10 17 8 7 6 3 21 5 35 2 2 3
2007/08 4 4 22 14 29 7 7 6 3 21 3 37 1 2 2
Average 2.8 6 8.2 10.6 16.4 4.8 5.4 5.2 2.2 14.2 3.8 36.6 1.8 2.8 2
Source: Global Competitiveness Report 2011-2012, World Economic Forum
Table 10 shows that Switzerland has successfully maintained Top 5 positions in six pillars:
• Innovation (2): Switzerland ranks 1st in university-industry collaboration, resulting in the
lowest R&D cost per patent in the world (Ruhli and Schuppisser, 1994). Switzerland is 2nd
in
research and development investment with 3.62% GDP behind Sweden (World Bank, 2012;
Appendix 4).
• Labour Market (2.2): Switzerland ranks 1st in two measurements - cooperation in labour-
employee relations and brain retention.With a 99% literacy rate (Central Intelligence
Agency, 2011), Switzerland’s globally recognized tertiary management and science
programs supply human capital as a competitive advantage – a well-educated, highly skilled
and productive workforce (Rulhli&Schuppisser, 2004). With university-industry
collaboration, on-the-job training and intellectual property protection, Switzerland has been
able to retain talent.
• Business sophistication (2.8): Switzerland ranks 1st in local supplier quality, indicating its
suppliers are tops in efficiency and technological capability, internationally competitive and
assist clients in new product and process development.
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406 Mark Kam-Loon Loo
• Technological readiness (3.8): Switzerland tops in broadband internet subscriptions.As
members of both the European Patent Convention and Patent Cooperation Treaty,
Switzerland protects intellectual property locally and globally (Political Risk Yearbook,
2011) promoting technological innovations.
• Goods market efficiency (5.2): Switzerland tops in the extent of market dominance, which
means healthy competition among businesses.
• Higher education and training (5.4): Switzerland ranks 1st in three indicators – quality of
education system, local availability of specialized research and training services, and extent
of staff training. Although Switzerland’s excellent tertiary education system has only a
49.4% attendance rate, Swiss companies provide workers with on-the-job training to mitigate
inefficiencies (World Economic Forum, 2012).
Although not mentioned explicitly in the reports, one of the contributing factors to Switzerland’s
success is its excellent international relations. While Switzerland may not be a member of the
European Union (EU),it provides economic activities that meet the EU standards (Central
Intelligence Agency, 2011) and reap member benefits such as lowered trade barriers (Political
Risk Year Book, 2011). As a member of the European Free Trade Association which includes
(Political Risk Year Book, 2011), Switzerland enjoys free trade with Lichtenstein, Iceland and
Norway resulting in increased trade. Finally, Switzerland has a history of neutrality that avoided
the explicit costs of war and trade barriers following bitter wars, such as World War II.
Singapore
Singapore is the only Asian nation in the Top 5. It has maintained a high average rank of 2.4 in
both Basic Requirements and Efficiency Enhancers but only managed 11th
in Innovation and
Sophistication.
Table 11. Singapore’s rankings in 12 Pillars of Competitiveness between 2007 and 2011
Sin
gap
ore
Subindexes
Basic requirements Efficiency enhancers
Innovation and
sophistication
factors
Ran
k
Inst
itu
tio
ns
Infr
astr
uct
ure
Mac
roec
on
om
ic s
tab
ilit
y
Hea
lth a
nd p
rim
ary
ed
uca
tio
n
Ran
k
Hig
her
ed
uca
tion
an
d t
rain
ing
Go
od
s m
ark
et e
ffic
ien
cy
Lab
or
mar
ket
eff
icie
ncy
Fin
anci
al m
arket
dev
elop
men
t
Tec
hnolo
gic
al r
eadin
ess
Mar
ket
siz
e
Ran
k
Busi
nes
s so
phis
tica
tion
Inn
ov
atio
n
2011/12 1 1 3 9 3 1 4 1 2 1 10 37 11 15 8
2010/11 3 1 5 33 3 1 5 1 1 2 11 41 10 15 9
-
Competitiveness: Top Five Nations Last Decade and Next Decade 407
2009/10 2 1 4 35 13 2 5 1 1 2 6 39 10 14 8
2008/09 3 1 4 21 16 2 8 1 2 2 7 41 11 14 11
2007/08 3 3 3 24 19 6 16 2 2 3 12 50 13 16 11
Average
2.4 1.4 3.8 24.4 10.8 2.4 7.6 1.2 1.6 2 9.2 41.6 11 14.8 9.4
Source: Global Competitiveness Report 2011-2012, World Economic Forum
Table 11 shows Singapore has five strong pillars:
• Goods Market Efficiency (1.2): Singapore tops in business impact on rules on foreign direct
investment and ease of customs procedures, thus attracting foreign investment and
encouraging international trade.
• Institutions (1.4): Singapore tops in five indicators – public trust of politicians, efficiency in
providing goods and services, ease of doing business, efficient legal framework in settling disputes and transparency of government policy making. Singapore maintains high
government efficiency and a low corruption rate among developing nations known for higher
levels of corruption. The IMD reports Singapore as one of the six nations that has managed a
balance between government and business efficiency with a zero gap.
• Labour Market Efficiency (1.6): Singapore is number 1 in rewarding pay according to
productivity. Singapore today is the only first world status nation in South East Asia and
nearly one in every six households has more than $1 million in assets, making it the densest population of wealthy households in the world, according to a new report by Boston
Consulting Group (Wong, 2011). • Financial Market Development (2): Singapore has successfully maintained its status as the
financial hub of South East Asia, and in 2011 established itself as world number 1, defeating
Hong Kong narrowly.
• Infrastructure (3): Singapore has relentlessly improved its quality of both port and air
transport infrastructure, earning top spot respectively in the world.
Singapore has an average rank of 7.6 (within world top 10) in higher education and training but it is 1st in quality of math and science education. While Singapore may be 5th among the Top 5 in
research and development investment with 2.66% GDP, it is the only South-East Asian nation to
hold a commendable 9th position globally in GDP% investment in R & D. In the Global Competitiveness Report 2011-2012, Singapore outperformed the average
performance of innovation-driven economies in 10 pillars of competitiveness: Institutions, Infrastructure, Macroeconomic Environment, Health and Primary Education, Higher Education
and Training, Goods Market Efficiency, Labour Market Efficiency, Financial Market
Development and Technological Readiness. Its performance in the remaining two pillars, Market Size and Business Sophistication, matches the level of the innovation-driven economies.
Switzerland and Singapore are competing neck to neck in the race for first place in global
competitiveness. Both have multiethnic populations with public schools that teach ethnic
languages.Both have a strong mandate against corruption that significantly reduces foreign direct
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408 Mark Kam-Loon Loo
investment, international trade and economic growth (Hill, 2011). Both have strong banking
systems and comparable Basic Requirements. While Singapore is twice stronger at 2.4 than
Switzerland’s 4.8 in Efficiency Enhancers, Switzerland seems better positioned to lead as
number 1 in the next decade owing to its Innovation and Sophistication at a consistent 1st or 2
nd,
far ahead of Singapore’s 11th
place.
Recommendations for the Top 5
Despite being great nations, the Top 5 leading nations in global competitiveness have
weaknesses to overcome. Tables 12 and 13 below compare between the average performance in
the last five years and in the last three years in the measurements ranked by the WEF and IMD
respectively.These two tables reveal the specific areas each nation has to arrest further decline in
global competitiveness.
Table 12 compares the performance of the Top 5 nations in the three stages of development
measured by the WEF between the last five years 2007-2011 and the last three years 2009-2011.
Table 12. Performance of Top 5 Nations in the WEF’s Three Stages of Development
WEF
Country
GC
I R
ankin
g
2007-2
011
GC
I R
ank
ing
20
09
-20
11 Subindexes
Stage 1: Basic requirements Stage 2: Efficiency
enhancers
Stage 3: Innovation and
Sophistication factors
2007-2011 2009-2011 2007-2011 2009-2011 2007-2011 2009-2011
Switzerland 1.4 1 2.8 2.7 4.8 3.0 1.8 2
USA 2.6 2.7 28.2 32.0 1.8 2.3 3.2 3.7
Sweden 3.3 3 5 4.3 7.2 6.3 4 3
Singapore 4 3.7 2.4 2.0 2.4 1.3 11 10.3
Denmark 5.6 5.7 4.8 6.3 6.2 8 7.8 8
Source: Global Competitiveness Report 2011-2012, World Economic Forum
Table 12 shows that Sweden and Singapore have both improved in all three stages while the
other three countries showed decline in one or more stages.Switzerland has slipped a little in
Stage 3 Innovation and Sophistication factors by 0.2 from 1.8 to 2 but no seeming cause for
alarm as yet. Denmark has dipped in all three stages but manages to stay within the Top 10.
USA has declined in all stages but the most alarming decline is in Stage 1 Basic Requirements,
declining by almost four places from 28.2 to 32.
Comparing the stages of development, Stage 1 Basic Requirements has two countries, USA
and Denmark in decline. Stage 2 Efficiency Enhancers finds Denmark and USA again slipping
in competitive positions. Finally, Stage 3 Innovation and Sophistication factors revealthree
countries – USA, Denmark and Switzerland – declining in competitiveness.
Overall, while the WEF average rankings between the last five and three years show
declines and improvements, they are not dramatic changes except in the case of USA in Basic
Requirements that has slipped outside the Top 30 position.
-
Competitiveness: Top Five Nations Last Decade and Next Decade 409
Table 13. Performance of Top 5 Nations in the IMD’s Four Factors
IMD Economic
Performance
Government Efficiency Business Efficiency Infrastructure
Country 2007-2011 2009-2011 2007-2011 2009-2011 2007-2011 2009-2011 2007-2011 2009-2011
Switzerland 12.2 12.7 3 3 7.4 7 3 3
USA 1 1 19.6 20.3 9.6 1.3 1 1
Sweden 17 15.3 10.6 9.3 8 12 3.2 3
Singapore 5 6 1.4 1.7 2.6 6.3 7 9.7
Denmark 27.4 31 7.2 9.3 5.4 10 5 4.7
Source: World Competitiveness Yearbook 2011, Institute of Management Development
Table 13 shows that while WEF rated Switzerland and Singapore as improving in all areas,
the IMD shows the two nations declined. Switzerland has slightly declined in Economic
Performance by 0.5 from 12.2 to 12.7. Singapore has declined in every area especially in
Business Efficiency by 3.7 from 2.6 to 6.3 and Infrastructure by 2.7 from 7 to 9.7. Nevertheless,
Singapore remains in the Top 10 in every factor.
Sweden has improved in all areas but declined in Business Efficiency by 4 positions from 8
to 12. Denmark has also slipped rather drastically in Business Efficiency 4.6 from 5.4 to 10. In
contrast, USA has improved dramatically in Business Efficiency by 8.3 from 9.6 to 1.3. The
USA has declined slightly by 0.7 from 19.6 to 20.3.
Comparing the four factors, the most improved factor is Infrastructure with only Singapore
showing a decline. However, each of the other three factors, Economic Performance,
Government Efficiency and Business Efficiency, has three countries in decline.
In Economic Performance, Denmark has a far lead over Singapore and Switzerland in
decline. With an average rank of 31 in the last three years, Denmark has to work hard to reverse
the slide.
In Government Efficiency, although Singapore and Denmark need to arrest further decline,
it is the USA that has to improve dramatically to prevent it from affecting negatively the stellar
progress in Business Efficiency improved from 9.6 to 1.3. Despite dropping by 0.3 from 1.4 to
1.7, Singapore is still the global model for Government Efficiency.
In Business Efficiency, Denmark, Sweden and Singapore has slipped by nearly four or more
positions. Denmark suffered the worst drop but managed to stay within Top 10 but Sweden has
ejected itself from the Top 10 sliding from 8 to 12. Singapore has also declined from an enviable
2.6 to 6.3. All three nations need to improve their Business Efficiency.
Limitation and Future Research
While care has been taken in this study to produce the most credible results, the dramatically
different rankings of many nations between the two world class research organizations – WEF
and IMD – remain controversial. However, no other global organizations are as thorough and
authoritative as these two measurements. Unless a third organization comes up with a measuring
instrument that can reflect a middle path, reconciling the two sets of findings, these two
measurements remain the most authoritative sources in global competitiveness.
Finally, future research is encouraged to study and monitor emerging nations in global
competitiveness that will help identify nations for international investors. Governments and
-
410 Mark Kam-Loon Loo
captains of industry in respective nations should conduct yearly evaluations of their global
competitiveness and take measures to improve areas of weaknesses and raise the standard of
living for their citizens.
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Appendix 1.WEF and IMD Rankings of Top 8 Nations in the last five years from 2007 to
2011
Country/WEF 2007/08 2008/09 2009/10 2010/11 2011/12 Average Rank
Switzerland 2 2 1 1 1 1.4 1
United States 1 1 2 4 5 2.6 2
Sweden 4 4 4 2 3 3.4 3
Singapore 7 5 3 3 2 4.0 4
Denmark 3 3 5 9 8 5.6 5
Finland 6 6 6 7 4 5.8 6
Netherlands 10 8 10 8 7 8.6 7
Canada 13 10 9 10 12 10.8 8
Country/IMD 2007 2008 2009 2010 2011 Average Rank
USA 1 1 1 3 1 1.4 1
Singapore 2 2 3 1 3 2.2 2
Hong Kong 3 3 2 2 1 2.2 2
Switzerland 6 4 4 4 5 4.6 4
Sweden 9 9 6 6 4 6.8 5
Canada 10 8 8 7 7 8 6
Denmark 5 6 5 13 12 8.2 7
Luxembourg 4 5 12 11 11 8.6 8
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412 Mark Kam-Loon Loo
Appendix 2: WEF and IMD Rankings of Top 8 Nations in the last 3 years from 2009 to
2011
Country/WEF 2009-
2010
2010-
2011
2011-
2012 Average
Country/IMD
2009 2010 2011 Average
Switzerland 1 1 1 1.00 USA 1 3 1 1.67
Singapore 3 3 2 2.67 Hong Kong 2 2 1 1.67
Sweden 4 2 3 3.00 Singapore 3 1 3 2.33
USA 2 4 5 3.67 Switzerland 4 4 5 4.33
Finland 6 7 4 5.67 Sweden 6 6 4 5.33
Denmark 5 9 8 7.33 Canada 8 7 7 7.33
Netherlands 10 8 7 8.33 Denmark 5 13 12 10.00
Canada 9 10 12 10.33 Luxembourg 12 11 11 11.33
Appendix 3: Top 5 Nations in the Last Five and Three Years
2007-2011 (Last 5 Years) 2009-2011 (Last 3 Years)
Country
WEF
2007-
2011
IMD
2007-
2011
Average Rank
Country
WEF
2009-
2011
IMD
2009-
2011
Average Rank
U.S.A 2 1 1.5 1 Singapore 2 3 2.5 1
Switzerland 1 4 2.5 2 Switzerland 1 4 2.5 1
Singapore 4 2 3 3 U.S.A 5 1 3 3
Sweden 3 5 4 4 Sweden 3 5 4 4
Denmark 5 8 6.5 5 Denmark 7 8 7.5 5
Canada 10 6 8 6 Canada 10 7 8.5 6
Netherlands 9 10 9.5 7 Finland 5 15 10 7
Finland 6 15 11 8 Netherlands 9 11 10 7
Appendix 4: GDP Percentage Investment in Research and Development
Country 2007 2008 2009 2010
Israel 4.80 4.66 4.27 NA
Finland 3.47 3.72 3.96 3.84
Sweden 3.40 3.70 3.62 NA
Japan 3.44 3.45 NA NA
Korea 3.21 3.36 NA NA
Switzerland NA 3 NA NA
Denmark 2.58 2.87 3.02 NA
USA 2.67 2.79 NA NA
Singapore 2.37 2.66 NA NA
Source: World Bank 2012, http://data.worldbank.org/indicator/GB.XPD.RSDV.GD.ZS, accessed April 23, 2012
NA = Not available.