IMD, a highly ranked global business school based in Switzerland and Singapore, has releases its 2015 World Competitiveness Ranking with China Hong Kong taking second place, Singapore third and the Scandinavian countries remaining in the top 10: Norway seventh, Denmark eighth, and Sweden on ninth place respectively.
Malaysia is ranked in fourteen while Finland 20 and Thailand thirty. Malaysia, Thailand and Indonesia all move down in the ranking from the previous year. Most Asian economies in decline have seen a drop in their domestic economies and are impacted by weakening/aging infrastructure.
A question of business efficiency
The ranking highlights one particular commonality among the best ranking countries. Nine countries from the top 10 are also listed in the top 10 of the business efficiency factor.
Business efficiency 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 labour 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,” said Professor Bris. “Increasing productivity remains a fundamental challenge for all countries.”
Long-term business profitability and productivity are difficult to achieve because they are largely underpinned by the strategic efforts of companies striving to maximize positive externalities that originate in economic activities.
Impact of business efficiency
Indonesia’s decline in the ranking is accompanied by a steep drop in the business efficiency factor (22 to 34).
The IMD World Competitiveness Yearbook measures how well countries manage all their resources and competencies to facilitate long-term value creation. The overall ranking released today 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.
IMD 2015 ranking is based on perceptions of 61 economies as places to do business.