GENEVA — The U.S. retained the top spot as the world’s most competitive economy in 2008, in large part due to its strengths in innovation and labor market efficiency, a report by the World Economic Forum said.
The U.S. “is endowed with many structural features that make its economy extremely productive and place it on a strong footing to ride out business cycle shifts and economic shocks,” said the Oct. 8 report.
However, the WEF’s “Global Competitiveness Report 2008-2009” warned that the U.S. has “built large macroeconomic imbalances…with repeated fiscal deficits leading to rising and burgeoning levels of public indebtedness.”
Switzerland is ranked as second-most competitive, followed by Denmark, Sweden, Singapore, Finland, Germany, the Netherlands, Japan and Canada.
Jennifer Blanke, WEF senior economist, said the global study was focused on examining economic structures rather than any shocks to the systems. Blanke said the current financial crisis will bring about “a huge correction,” and warned that unless it’s fixed “it can do a lot of damage in the short to medium term” to the competitiveness of economies.
The report ranks 134 economies based on a survey of 12,000 business leaders worldwide and 12 key determinants of competitiveness. These include macroeconomic stability, goods and labor market efficiency, innovation, business sophistication, institutions, infrastructure, education, technological readiness and financial market sophistication.
Among emerging economies, gains were posted by China, Brazil, Costa Rica, Peru, Cambodia, Jordan and Hong Kong, the report shows.