Switzerland remains the world’s most competitive economy according to this year’s rankings from the Geneva-based World Economic Forum.

Competitiveness defined by innovation

Publication of the annual table on Wednesday was accompanied with a warning from the WEF that global economy is at risk of a fresh crisis because of a failure to push through growth and productivity-friendly policies since the financial crash 10 years ago.“Global competitiveness will be more and more defined by the innovative capacity of a country. Talents will become increasingly more important than capital and therefore the world is moving from the age of capitalism into the age of ‘talentism’,” said Klaus Schwab, executive chairman of the WEF.“Countries preparing for the fourth industrial revolution and simultaneously strengthening their political, economic and social systems will be the winners in the competitive race of the future.”Switzerland got the nod as the most competitive economy ahead of the United States for a ninth straight year. Thierry Geiger, WEF economist, said Switzerland had a virtuous circle of infrastructure, institutions and education, but at the heart of its success was the way it created and used talent.“That is really the secret of Switzerland, this ability to innovate, supported by a whole range of enabling factors,” he said.However, Mr Geiger added that Switzerland was now at risk from complacency and populism. The ageing population could undermine the innovation miracle by shutting the door to foreign talent in one of the referendums that make Swiss law, he said.“We see a proliferation of such referendums on everything, some of them are kind of dangerous, they could really endanger and jeopardise Switzerland’s prosperity,” Mr Geiger said.

UK slip not due to Brexit

The UK slipped one place to eighth in the rankings, although the WEF said the fall had more to do with better performances by other countries rather than the impact of the Brexit vote – at least at the moment.

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But the WEF added, “This drop does not yet reflect the outcome of the Brexit negotiations, which is likely to further undermine the country’s competitiveness. Its macroeconomic environment remains challenging... and could become an important constraint in the future as the timeline for a reduction of the fiscal deficit is repeatedly pushed back.”A Treasury spokesman in London said the report proved that the UK was still one of the best places in the world to do business because of its “low corporate tax rate, a robust labour market and a thriving technology sector”. He added, “But we are not complacent, which is why we are building on this strength by investing £23 billion in infrastructure, technology and skills to deliver a more productive economy and higher living standards for people across the country.”Elsewhere in the table, China inched up one place to 27th, well ahead of 38th-ranked Russia and India, which was in 40th position.Among eurozone countries, there was little evidence that the recent pick-up in growth had boosted the competitiveness of the bigger economies or narrowed the region’s north-south divide. France dropped one place to 22, while there was little change in the rankings of Spain (34), Italy (43) or Greece (87).At the bottom of the rankings was war-ravaged Yemen in 137th place.The 12 categories considered by the WEF report were institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation.Top 10 WEF most competitive economies:1 Switzerland2 United States3 Singapore4 Netherlands5 Germany6 Hong Kong7 Sweden8 United Kingdom9 Japan10 FinlandFor related news and features, visit our Enterprise section.Access hundreds of global services and suppliers in our Online Directory  Get access to our free Global Mobility Toolkit

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