The Ten Most Competitive Countries In The World

The United Kingdom edges on to the top ten list for the first time since 2007.

Last year's rank: 12th

Strengths:

• Sophisticated and innovative businesses
• Ranks 6th in market size

Weaknesses:

• Weak macroeconomics (ranks 85th) because of a double digit deficit, mounting public debt (77% of GDP) and a low savings rate (12.3% in 2010).

In spite of political turmoil, natural disasters, and economic stagnation, Japan still remains one of the best places to do business in the world—if declining.

Last year's rank: 6th

Strengths:

• Ranked #1 for the sophistication of its businesses.
• Ranked #4 for innovation.
• Has the 2nd highest number of patents per capita in the world.

Weaknesses:

• Severe macroeconomic problems, here it ranks 113th on the list. The public debt is 220% of GDP, that says it all.

Denmark inched up one spot from last year, mostly because of its unique labor market.

Last year's rank: 9th

Strengths:

• Denmark's institutions are ranked the 5th strongest in the world.
• Has the "most flexible labor market of all the Nordic countries," and ranks 6th in the world for them.

Weaknesses:

• Denmark needs to continue making its financial markets and businesses more sophisticated.

The Netherlands moved up one spot from last year, mostly because it improved on strengths that it already has.

Last year's rank: 8th

Strengths:

• The Netherlands has managed to make its already strong institutions even stronger.
• It has improved the efficiency of its financial markets and the sophistication of its businesses (ranked 5th).
• And ranks 8th in both primary and higher education/training.

Weaknesses:

• Could improve upon the flexibility of its labor market.

Germany inched down one place from last year, and given current events, that seems pretty good.

Last year's rank: 5th

Strengths:

• Ranks 2nd in terms of infrastructure.
• A big hand goes to Germany's famous mittlestand (mid-sized companies). This report lauds the country for the low market dominance of its big corporations.

Weaknesses:

• A rigid labor market (ranks 125th).
• Deteriorating availability of scientists and engineers. Last year it ranked 27th in this area, this year it ranks 41st.

The United States stays strong, but it looks like the public and private sector will have to learn how to work together if that is to continue.

Last year's rank: 4th

Strengths:

• Incredibly sophisticated and innovative companies.
• A great higher education system that cooperates well with the private sector to spur research and development.
• A huge domestic economy.
• Improving financial markets (up to 22nd from 31st last year).

Weaknesses:

• Business simply does not trust the country's institutions—here it ranks 39th. In terms of trust between politicians and business, it ranks 50th, and it ranks 66th in terms of government waste.
• Ranks 90th in terms of macroeconomic stability, mostly because of massive public debt.

Finland is the biggest jumper on the top ten list.

Last year's rank: 7th

Strengths:

• Has the 3rd highest ranked public institutions.
• Ranked 1st for higher education.
• Ranked 3rd for innovation.

Weaknesses:

• A small increase in the country's budget deficit has shaken its macroeconomic footing.
  

Sweden is down one from last year, but mostly because of the power of this year's #2 ranked country. On its own, it's still going very strong.

Last year's rank: 2nd

Strengths:

• Great institutions, especially ethical private sector companies and corporate boards. In terms of business culture and innovation it is ranked 2nd.
• Ranks 2nd for higher education and training.
• Stable macroeconomic climate due to low public debt and a balanced budget.

Weaknesses:

• Like other Nordic countries, it lacks a flexible labor market.

All eyes are on Singapore. The country has everything in place for success; now it just needs to become more sophisticated.

Last year's rank: 3rd

Strengths:

• Strong, transparent, efficient institutions (ranked 1st here).
• Also ranked 1st for its financial market development.
• Great infrastructure (ranked 3rd).

Weaknesses:

• Needs more advanced technological development and more sophisticated companies.

Switzerland claims the number one spot, but can it keep it?

Last year's rank: 1st

Strengths:

• Strong collaboration between business and academia which spurs innovation and research and development.
• Strong institutions and financial markets.
• Solid infrastructure.

Weaknesses:

• University enrollment is low at just 49.4%.

Biggest winner: Ethiopia, moved from 119th last year, to 106th this time around.

• Why: While not particularly sophisticated in business or technology, Ethiopia possesses strong governmental institutions, low government waste, and a stronger than average education system for its region.

Biggest losers: Egypt (fell from 81st to 94th).

• Why: In short, political turmoil. However, if vestiges of the old regime are removed, Egypt could become very competitive as it is a huge market. The vestiges are: an inefficient and over-regulated labor market and a subpar education system. 

Check out The Ten Best States To Do Business>>