U.S. Loses Ground in World Competitiveness Ranking

Denmark, Ireland and Switzerland have been named the world’s most competitive economies in the 2023 World Competitiveness Ranking published by the International Institute for Management Development (IMD) on Tuesday. While Denmark managed to stay in first place after its rise to the top last year, Ireland leapt from 11th to second place, with Switzerland stuck in neutral in third place.

What springs to mind when looking at this year’s top performers is the fact that all of them are relatively small economies, enabling them to react faster in today’s fast-paced globalized economy. “Navigating today’s unpredictable environment requires agility and adaptability,” Christos Cabolis, the WCC’s chief economist explains. “Countries which excel are building resilient economies, such as Ireland, Iceland, and Bahrain. Their governments are also able to adapt policies based on current economic conditions in a timely fashion.”

The same cannot be said of the United States with its federal system and slow-moving legislative process, which partly explains the U.S. economy’s gradual decline from the top of IMD’s annual ranking. Having held the top position uninterrupted from 1997 to 2009 and not fallen out of the top 3 until 2017, the world’s largest economy ranks ninth this year after sitting in 10th place from 2020 through 2022. While that may sound bad considering the United States’ status in the world, it still makes the U.S. the highest-ranked among the world’s largest economies with Canada the only other top 10 economy (in terms of GDP) to make the top 20 in the 2023 Competitiveness Ranking.

With five economies in the top 10, Europe once again excelled in the 2023 ranking, even though the region’s economic powerhouses Germany, France and the UK are notably absent from the top 10, and the top 20 for that matter.