The U.S. again took first place in world competitiveness, according to a leading business school. Here are the factors that clinched it for us:
Yes, when it comes to world competitiveness–despite frequent complaints from U.S. manufacturers about an unfair international playing field–the U.S. is tops again. As reported by IndustryWeek, the rankings were issued by IMD, a prominent business school based in Lausanne, Switzerland. The 2005 edition of IMD’s annual World Competitiveness Yearbook, containing data on 60 economies around the globe, came out earlier this year.
The 10 most competitive economies are:
1. United States
2. Hong Kong
3. Singapore
4. Iceland
5. Canada
6. Finland
7. Denmark
8. Switzerland
9. Australia
10. Luxembourg
At No. 31, China–not including Hong Kong, a special administrative area within China that clinched the no. 2 spot–fell significantly from its No. 24 ranking last year. IMD says the lower ranking is due to a recent “extremely negative opinion survey” that casts doubt on whether China can sustain its remarkable economic expansion.
At the very bottom of IMD’s list (with the lowest ranking mentioned first) are Venezuela, Indonesia, Argentina, Poland and Mexico.
The U.S. snagged the no. 1 spot because of its GDP, investment flows, stock market capitalization, the availability of venture capital, its ability to attract highly skilled foreign workers, business spending on R&D, the numbers of computers in use, its high-tech exports, and the number of foreign patents awarded.
However, the U.S. has a weak spot “The [federal] budget deficit, which runs at 3.4% of GDP, should be a far more serious matter of concern in the U.S.,” says Stephane Garelli, a professor at IMD and author of the yearbook’s executive summary. “Such a persistent deficit, which is unlikely to be reduced in the near future, has a number of enduring effects, the least of which is the explosion of debt. [While] this debt does not constitute, per se, a major problem for the U.S. economy..it is far more disquieting for the world economy in general, since it puts considerable strain on the capital market.”
Source:
U.S. Repeats As No. 1
John S. McClenahen
IndustryWeek, July 1, 2005
www.industryweek.com/ReadArticle.aspx?ArticleID=10448
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What about our trade deficite of 160 billion with China, 120 billion with Germany, 60 billion with Japan and 9 billion with India ?
Because of the trade deficite we are not very competative with other countries.
Agriculture does well only because we subsidize it. Take away the subsadies and the sugar , cotton growers would not be very competative.
Although the position looks good right now, I believe the US corporate tax system should be restructured to encourage massive research and development. Some of us invest as much as 25% in R&D. The results earn us business from countries like Korea and China, essential for correcting the deficit. I happen to believe the greatest hazard to the US and our way of life is not terrorism, but the coming lack of economic resilience. I think we are too complacent about a potentially serious situation as our durable goods manufacturing migrates abroad.