Report: U.S. economy makes gains, earns highest competitive ranking in eight years

Written on Oct 06, 2017

The U.S. is the second-most competitive economy in the world, its highest ranking in eight years, the World Economic Forum said Oct. 3 as the country’s innovation edge and business optimism bolstered its standing.

Switzerland retained its No. 1 ranking, according to the forum’s global competitiveness report for 2017-18. Rounding out the top 10 behind the U.S. among 137 countries are Singapore, the Netherlands, Germany, Hong Kong, Sweden, the United Kingdom, Japan, and Finland.

The U.S. lost its top status during the financial crisis and recession of 2007-09, and fell as low as No. 7 in 2012-2013 before steadily climbing the past few years, landing at No. 3 last year.

Among the country’s biggest strengths are its ability to innovate, which relies on close collaboration between businesses and universities in research and development, says Daniel Gomez Gaviria, the forum’s head of competitiveness research and author of the report. Innovation has loomed as an increasingly more significant factor in the global economy in recent years, he says.

“The big strength of the U.S. is its innovation and business sophistication,” which refers to the efficient ways the country makes products and delivers them to customers, Gaviria says. The U.S. moved up to seventh and sixth places, respectively, in market efficiency and technological readiness, the report says.

The nation’s ranking also was lifted by the forum’s spring CEO survey, which appeared to reflect more optimism based on President Trump’s plans to cut taxes and regulations. Still, tax rates and tax regulations are the biggest problems identified by the CEOs.

While the nation advanced in health and primary education (from 29 to 19) and in the strength of its institutions (from 27 to 20), it remains relatively weak in those categories. Institutions include areas such as the burden of government regulation, government corruption, public trust in politicians and corporate ethics.

The U.S. also fell 12 spots to 83 in its macroeconomic environment. The country still has the world’s most prosperous economy, but it’s weighed down by the level of government debt and its credit rating, among other factors.

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