AS featured in the Irish Times this week the good news the Ireland’s growth and stability in the world economy is once again recognised by one of the most respected ratings agencies.
Each country’s ranking is based on an analysis of over 340 criteria derived from four principal factors: economic performance, government efficiency, business efficiency and infrastructure. A survey of some 5,400 business executives is also taken into account.
Ireland’s rise in the rankings was linked to its economic performance, which was ranked 6th out of 61.
The State also scored strongly when it came to business efficiency, which covers areas such as productivity and labour market flexibility, coming second overall.
However, it scored worst when it came to infrastructure, where it was ranked 23rd overall. Within this subcategory, its ranking for basic infrastructure, which includes road and rail networks, was even worse at 40.
Ireland’s highest position in the IMD’s competitiveness rankings was fifth, which it achieved in 2000. It fell to 24th position in 2011, only months after being forced into an international bailout.
This year’s rankings saw the US surrender its status as the world’s most competitive economy, a position it has for the last three years, to Hong Kong and Switzerland.
Prof Arturo Bris, director of the IMD World Competitiveness Center, said a consistent commitment to a favourable business environment was central to Hong Kong’s rise and that Switzerland’s small size and its emphasis on a commitment to quality have allowed it to react quickly to keep its economy on top.
“The USA still boasts the best economic performance in the world, but there are many other factors that we take into account when assessing competitiveness,” he said.
“The common pattern among all of the countries in the top 20 is their focus on business-friendly regulation, physical and intangible infrastructure and inclusive institutions.”
Prof Bris said one important fact that the ranking makes clear year after year is that current economic growth is by no means a guarantee of future competitiveness.
Data gathered since the first ranking was published more than 25 years ago also lend weight to fears that the rich are getting richer and the poor poorer, underpinning the thesis propounded by French
“Since 1995 the world has become increasingly unequal in terms of income differences among countries, although the rate of increase is now slowing,” Prof Bris said.
“The wealth of the richest countries has grown every year except for the past two, while the poorer countries have seen some improvement in living conditions since the millennium,” he added.
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