Estonia world's 31st most competitive economy (1)
The Swiss-based IMD World Competitiveness Center has announced its latest annual World Competitiveness Ranking, published since 1989. Estonia has fallen by one place and for the first time, the country's Baltic ally Lithuania has overtaken it.
As part of its ranking of 61 economies for 2015, the IMD World Competitiveness Center looks at several aspects of each country as a place to conduct business.
The ranking measures how well countries manage all their resources and competencies to facilitate long-term value creation. The overall ranking reflects more than 300 criteria, approximately two-thirds of which are based on statistical indicators and one-third on an exclusive IMD survey of 6,234 international executives.
Estonia (30 to 31) and Latvia (35 to 43) rank lower than last year, but Lithuania gained in the ranking (34 to 28). Elsewhere in the Central and Eastern Europe, Poland (36 to 33), the Czech Republic (33 to 29) and Slovenia (55 to 49) also moved up, while the current events in Russia (38 to 45) and Ukraine (49 to 60) highlight the negative impact that armed conflict and the accompanying higher market volatility have on competitiveness in an increasingly interconnected international economy.
The USA remains at the top of the ranking as a result of its strong business efficiency and financial sector, its innovation drive and the effectiveness of its infrastructure, IMD said. Hong Kong (2) and Singapore (3) moved up, overtaking Switzerland, which dropped to fourth place. Canada (5), Norway (7), Denmark (8), Sweden (9) and Germany (10) remain in the top 10 and Luxembourg moved to the top (6) from 11th place in 2014.
Nine countries from the top 10 are also listed in the top 10 of the business efficiency factor, which focuses on the extent to which the national environment encourages enterprises to perform in an innovative, profitable and responsible manner. It is assessed through indicators related to productivity such as the labor market, finance, management practices and the attitudes and values that characterize the business environment.
"Simply put, business efficiency requires greater productivity and the competitiveness of countries is greatly linked to the ability of enterprises to remain profitable over time," the report said, adding that for example, Germany's slight drop (6 to 10) is a reflection of its fall in business efficiency (9 to 16).