Canada falls out of Top 10 spot in global competitiveness rankings
Canada dropped two spots to 12th overall in the 32nd edition of Global Competitiveness Report 2011-12, released today by the World Economic Forum. Canada has fallen three places in the global rankings since 2009, despite achieving almost identical overall competitiveness scores over the past three years.
To the Conference Board of Canada — the Canadian partner institute in preparing the report — this year’s ranking reinforces how global competitors continue to gain ground. Canada must emphasize improvements to its productivity and competitiveness to maintain its high standard of living and quality of life.
“Canada should not be satisfied with its 12th place ranking. Much more can be done to improve productivity, economic performance, and global competitiveness,” said Michael Bloom, vice-president of organizational effectiveness and learning. “Businesses continue to underperform in using our peoples’ skills and knowledge to generate new or improved products, processes or services. And Canadian businesses do not appear to be adapting adequately to globalization or building effective global value chains as quickly as their international competitors.”
As the Canadian Partner Institute for the World Economic Forum, the Conference Board carried out the Executive Opinion survey to obtain corporate leaders’ perceptions of the business climate. The overall rankings are calculated from both publicly available data and the Executive Opinion Survey — which, this year, included over 14,000 business leaders (including 98 in Canada) in a record 142 economies.
For the third consecutive year, Switzerland tops the overall rankings. Singapore overtook Sweden to claim second position and Finland jumped three positions to number four, dropping the United States to fifth. Since losing first place to Switzerland in 2009, the United States has continued to slip in the rankings, due to weak economic fundamentals and increasing concerns about the efficiency and effectiveness of U.S. institutions and leaders. Germany (6th), the Netherlands (7th), and Denmark (8th) bolstered the strong showing of Northern and Western European countries. Despite slipping three spots, Japan ranked ninth. The United Kingdom jumped up two places to 10th position and Hong Kong maintained 11th place, dropping Canada to 12th.
Canada’s Strengths and Weaknesses
According to the survey respondents, Canada’s areas of strength include its health and primary education systems, labour markets, financial markets, institutional effectiveness, and the state of its infrastructure — all of which have contributed to the development of a sustainable and vibrant economy. However, respondents said issues such as the burden of government regulations and wastefulness of government spending were among the most problematic factors for doing business.
Canada gets mixed results for its macroeconomic environment, culminating in a disappointing overall ranking of 49th in this area of competitiveness. Canada earns top scores in both inflation and country credit rating, but these strengths are more than offset by a ranking of 80th in terms of gross national savings as a percentage of gross domestic product (GDP), and 129th out of 142 countries in terms of overall government debt levels as a percentage of GDP.
The results of the Global Competitiveness Report align with the Conference Board’s How Canada Performs: A Report Card on Canada analysis, which assesses our performance relative to that of 16 peer countries in six areas of socio-economic performance. In the most recent economic analysis, Canada is expected to stay in the middle of the pack among leading developed countries in both 2010 and 2011.