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  • International Journal of Business and Management Studies,

    CD-ROM. ISSN: 2158-1479 :: 1(3):391–412 (2012)

    Copyright c© 2012 by UniversityPublications.net

    COMPETITIVENESS: TOP FIVE NATIONS LAST DECADE AND NEXT

    DECADE

    Mark Kam-Loon Loo

    Concordia University College of Alberta, Canada

    This paper investigates the top five nations in global competitiveness in the last decade from

    2000 to 2009 based on the Global Competitiveness Index by the World Economic Forum and

    the World Competitiveness Yearbook by the Institute of Management Development. Next it

    seeks to forecast the top five nations in the next decade from 2010-2019 based on the

    performance trends from the two sources. Finally, this paper discusses the factors for the

    success of these nations and suggests recommendations to enhance their global

    competitiveness.

    Keywords: Global competitiveness report, World economic forum, World competitiveness

    yearbook, Global rankings, Competitiveness index.

    Objective

    Global competitiveness is the study of the factors that influence a nation!s environment which

    ultimately affects the ability of its businessesto compete nationally and internationally. The

    primary objective of this study is to identify the five most competitive nations in the last decade

    and forecast the five most competitive nations for the next decade. The secondary objective is to

    identify the specific factors that contribute to the top five nations! competitiveness.

    Literature Review

    The two most authoritative sources on global competitiveness are the World Economic Forum's

    (WEF) Global Competitiveness Report (GCR) and the Institute of Management Development's

    (IMD) World Competitiveness Yearbook (WCY). The WEF released its first report on global

    competitiveness in 1979 and the IMD in 1988.

    Definition of Global Competitiveness

    The WEF and IMD are both Switzerland-based institutions. Both organizations use macroand

    microeconomic concepts to study the efficiency of the government and private sectors as well as

    infrastructure that shape a nation's competitiveness.

    The difference lies in their approaches via their definitions and hence, measurement of

    global competitiveness (Phiromswad, Srivannaboon, Fujiokaand Hoontrakul, 2010).The WEF

    equates competitiveness with productivity that sets a sustainable level of prosperity that a

    country may achieve, while the IMD equates competitiveness with a combination of

    competencies in economic growth and mindset in value-added areas.

    391

  • 392 Mark Kam-Loon Loo

    The WEF defines national economic competitiveness as “the set of institutions, policies and

    factors that determine the level of productivity of a country”, which in turn, affects the rate of

    return on investment and rate of output growth. (Aridas and Magno, 2011).The WEF measures

    the sustainable current and medium term levels of economic prosperity of each nation through 12

    pillars of global competitiveness (Garelli, 2011). The WEF’s Global Competitiveness Report

    (GCR) releases the annual Global Competitiveness Index (GCI) that awards a rank to each of the

    12 pillars and culminating in the rank of the nation.

    The IMD defines national economic competitiveness as “how a nation manages the totality

    of its resources and competencies to increase the prosperity of its people.” (Aridas and Magno,

    2011) The IMD analyzes national policies that create and maintain an environment that sustains

    more value creation and long-term sustainability for its enterprises and thus, promote more

    prosperity for its people(Garelli, 2011). The IMD’s World Competitiveness Yearbook (WCY)

    releases the annual rankings of nations based on four key measurements.

    The difference can be further clarified from the objectives explained by the leaders from

    both organizations.

    The GCI provides a sense why some countries have been better at providing high and rising

    living standard to their citizens than others (Dr. Jennifer Blanke, WEF, 2011), while the WCY

    focuses on how nations and enterprises manage the totality of their competitiveness to achieve

    long-term prosperity (Dr. Suzanne Rosselet, IMD, 2011). This implies that while the WEF

    focuses on the government’s role in providing a rising living standard to their citizens, the IMD

    suggests collaboration between governments and enterprises to manage resources to achieve

    sustainable progress.

    In the interest of the scholar, while the GCR’s full report is freely available

    online,thecomplete WCY results are only available through purchase. The WCY releases the

    ranking of nations and the summated performance in the four main measurements freely online

    but the rest have to be purchased.

    Measurement Differences between WEF and IMD

    The key differences in measurement between the two research organizations can be summarized

    in Table 1 below based on the WEF’s Global Competitiveness Report 2011/2012 and IMD’s

    World Competitiveness Yearbook 2011.

    Table 1. A comparison of global competitiveness methodology between WEF and IMD:

    Item WEF 2011/2012 First report: 1979

    IMD 2011

    First report: 1988

    Primary Data:

    Executive Opinion

    Surveys (EOS)

    13,395 EOS

    Over 15,000 surveys

    Median 98 per country

    4,935 EOS

    150 Partner Institutes*

    142 countries

    54 Partner Institutes*

    59 countries

    Secondary Data

    (SD)

    UNESCO, IMF & WHO** Various public literature sources

    Measurements 12 Pillars: 111 Indicators 5 Factors: 331 Criteria

    Data Analysis 2/3 EOS & 1/3 SD 1/3 EOS & 2/3 SD

  • Competitiveness: Top Five Nations Last Decade and Next Decade 393

    Strength Up-to-date perceptions and forward-looking

    indicators that reflect voices of opinion

    leaders in business and other stakeholders

    More emphasis on indicators from varying

    independent sources, so it manages to reveal

    more about objectivepast performance

    *Recognized economic departments f national universities, independent research institutes or business organizations.

    **UNESCO: United Nations Educational, Scientific and Cultural Organization; IMF: International Monetary Fund;

    WHO: World Health Organization

    As shown in Table 1, the WEF and IMD rely on primary and secondary (or hard) data to

    determine the competitiveness of nations.

    While both the WEF and IMD conduct executive opinion surveys in the nations studied,

    WEF’s sample numbers 15,000 top management executives while IMD surveys nearly 5,000 top

    and middle managementexecutives representing a cross-section of the business community.Thus,

    WEF’s sample size is three times larger than IMD’s.

    Both employ partner institutes that include leading research institutes and business

    organizations to help execute the surveys. WEF's collaborates with a larger network of

    institutions totaling 150 while IMD engages 54 partner institutes. Again, WEF’s number of

    partners is nearly three times IMD’s partners.

    The WEF country sample numbers 142, nearly three times larger than IMD’s 59 countries,

    suggesting that the WEF undertakes a wider global study than the IMD. In WEF’s executive

    opinion survey, the median is 98 per country.

    Both the WEF and IMD gather secondary or hard data from publicly available sources such

    as the United Nations on population and International Monetary Fund on Gross Domestic

    Product. The difference in data analysis lies in their formulation of the ratio between primary

    and secondary data sources to yield their respective desired results. WEF results are based on

    two-thirds of the primary research survey and one-third hard data, while the IMD is reversed,

    one-third executive opinion survey and two-thirds hard data.

    Thus, WEF places 66.6% weight on the Executive Opinion Survey, seeking to collect

    qualitative data not covered by quantitative data from public sources.On the other hand, the WEF

    places 66.6% weight on hard data of statistical indicators acquired frominternational, national

    and regional organizations as well as private institutions.

    The strength of the WEF’s methodology lies in the up-to-date perceptions and forward-

    looking indicators that reflect the voices of opinion leaders in business and other stakeholder,

    while the IMD emphasizes more on the indicators from varying independent sources and thus,

    reveals more about objective past performance.

    In terms of evaluating global competitiveness, the WEF measures 111 indicators that form

    12 pillarswhile the IMD evaluates 331 criteriacategorized in four main factors as shown in

    Table 2.

    Table 2. Differences in measurement between WEF and IMD

    WEF 2011-2012 Indicators IMD Criteria

    Institutions 21

    Economic Performance 78 Infrastructure 9

    Macroeconomic Environment 6

    Health and primary education 10 Government Efficiency 71

    Higher education and training 8

  • 394 Mark Kam-Loon Loo

    Goods and market efficiency 16

    Labour market efficiency 9

    Business Efficiency 68 Financial market development 8

    Technological readiness 6

    Market size 2

    Infrastructure 114 Business sophistication 9

    Innovation 7

    Total 111 Total 331

    Source: Global Competitiveness Report 2011/12 and World Competitiveness Yearbook 2011

    The WEF researchers evaluate economies by the 12 pillars to construct a weighted Global

    Competitive Index that determines their rank. The pillars of competitiveness relate to three

    stages of economic development (Sala-I-Martin, 2011) as shown in Figure 1.

    Figure 1. WEF’s Three Stages of Economic Development and 12 Pillars of Competitiveness Source: Global

    Competitiveness Report 2011-2012

    The following briefly defines each of the 12 pillars of competitiveness (Grammy, 2011):

    • Institutions: Legal and administrative framework within which individuals, forms and

    governments interact to generate wealth.

    • Infrastructure: Effective modes of transportation and communication, including quality

    roads, railroad, ports, airports, utility supplies and telecommunication networks.

    • Macroeconomic Environment: Stability and predictability in economic activity based on

    optimal levels of regulation and taxation for private firms to create employment manage

    production and make profit.

    • Health and Primary Education: A healthy, literate and cultured workforce supporting

    production of goods and services in an efficient manner.

    • Higher Education and Training: A pool of well-educated and skilled workers who are able to

    adapt rapidly to a changing environment and evolving needs of the production system.

    • Goods Market Efficiency: Market competition, both domestic and foreign, to facilitate a

    proper balance between demand and supply with minimal public regulations.

    Stage 1: Factor Driven

    Economies

    Stage 2: Efficiency Driven

    Economies

    Stage 3: Innovation

    Driven Economies

    Basic Pillars (weight 20%)

    1. Institutions

    2. Infrastructure

    3. Macroeconomic

    Environment

    4. Health & Primary Education

    Efficiency Pillars (weight 50%)

    5. Higher Education & Training

    6. Goods Market Efficiency

    7. Labour Market Efficiency

    8. Financial Market Development

    9. Technological Readiness

    10. Market Size

    Innovation and

    Sophistication Pillars(weight

    30%)

    11. Business Sophistication

    12. Innovation

  • Competitiveness: Top Five Nations Last Decade and Next Decade 395

    • Labour MarketsEfficiency: Efficiency of labour markets to allocate workers to their optimal

    employment positions and provide them with incentives to give their best effort.

    • Financial Markets Development: Efficiency of financial markets to allocate domestic and

    foreign savings to provide entrepreneurial and investment projects based on expected rates of

    return rather than political connections.

    • Technological Readiness: Agility with which an economy adopts existing technologies to

    enhance productivity, with full capacity to leverage information and communication

    technologies in production processes for increased efficiency and competitiveness.

    • Market Size: Expanding market size allowing firms to exploit economies of scale with

    regional and international markets complementing domestic markets.

    • Business Sophistication: Sophisticated business practices conducive to efficiency and based

    on the quality of overall business networks and sustained profitability.

    • Innovation: Invention and innovation made possible by substantial investment in research

    and development to create new products and offer better methods of production and

    distribution.

    These pillars are weighted to best represent the needs of the nation being measured in terms of

    competitiveness. Pillars 1 to 4 are weighted 20%. They form the basic requirements for

    development in nations whose economies are factor-driven. These nations compete based on

    factor endowments, such as human and physical capital, natural resources and trade location.

    Their businesses produce labour intensive products and compete on price. Maintaining

    competitiveness at this stage of development hinges primarily on well-functioning public and

    private institutions, developed infrastructure, stable macroeconomic environment and healthy

    workforce with a minimum of primary education.

    Pillars 5 to 10 are described as efficiency enhancers of development and they are weighted

    at 50%. Economies become more competitive, increasing productivity and paying higher wages.

    Economies move into the efficiency driven stage of development when they market capital

    intensive products and compete internationally on price and quality. Competitiveness is

    increasingly driven by higher education and training, efficient goods market, well-functioning

    labour markets, developed financial markets, advance technology and expanding market size.

    Pillars 11 to 12 describe the innovation and sophistication stage of development, and they

    are weighted 30%. Economies enter the innovation driven stage when they pay high wages and

    provide a high standard of living. Their businesses compete by developing new and unique

    products using and investing heavily in sophisticated production processes.

    Economic Performance

    1. Domestic Economy

    2. International Trade

    3. International

    Investment

    4. Employment

    5. Prices

    Business Efficiency

    1. Productivity

    2. Labour Market

    3. Finance

    4. Management Practices

    5. Attitudes and Values

    Government Efficiency

    1. Public Finance

    2. Fiscal Policy

    3. Institutional Framework

    4. Business Legislation

    5. Societal Framework

    Infrastructure

    1. Basic

    2. Technological

    3. Scientific

    4. Health & Environment

    5. Education

    Figure 2. IMD’s Four Main Factors for Measurement Source: World Competitiveness Yearbook 2011

    As seen from Figure 2, the IMD’s methodology for its World Competitiveness Yearbook

    divides the national environment into four main factors, each with five sub-factors:

  • 396 Mark Kam-Loon Loo

    Economic Performance: domestic economy, international trade, international investment,

    employment, prices

    Government Efficiency: public finance, fiscal policy, institutional framework, business

    legislation, societal framework

    Business Efficiency: productivity, labour market, finance, management practices,

    attitudes and values

    Infrastructure: basic infrastructure, technological infrastructure, scientific

    infrastructure, health and environment, education

    The 20 sub-factors comprise a total of 331 criteria to calculate the overall competitiveness

    ranking. These criteria emphasize the market’s support for entrepreneurship and ability to attract

    investment.

    Which measurement is better?

    Many developing nations suffer from the annual fluctuations in their competitiveness ranking.

    For example, in the 2010 rankings, while Thailand was placed 26th

    among 59 countries in the

    IMD measurement, it fell two spots from 36th

    to 38th

    among 139 economies in the WEF report.

    The fall in rankings of a nation can give room to critics to raise discontent against the ruling

    government. The Thai government would be happier with the IMD than the WEFrankings,

    especially in the aftermath of a period of domestic political instability (Limsamarnphun, 2010).

    The situation becomes even more controversial when a significant difference exists between

    the two measurements. Thailand has slipped 10 places in the WEF yardstick since 2006.

    However, it is favourably ranked with the IMD at 26th

    in 2010 and 2009, improving from 27th

    in

    2008 and 33rd

    in 2007. While the Thai government can be criticized for failing by WEF

    standards, it can defend that it has progressed since 2007 by IMD’s measurements. However, the

    WEF places Thailand in a more competitive position in the top 27% compared to the IMD’s

    position among the 44%.

    So which measurement should governments, enterprise and scholars believe?

    Methodology

    The WEF and IMD are the two most authoritative measurements of global competitiveness and

    no government can afford to ignore either - even if one may not be as politically convenient as

    the other. Hence, despite their differences, both measurements are employed in this study. The

    issue lies in reconciling the differences between the two measurements to form a credible

    measurement for the Top 5 nations.

    Figure 3 recapitulates the weights assigned by WEF and IMD to primary and secondary

    data. The WEF assigns 2/3 of weight to primary data from executive opinion surveys and 1/3 to

    secondary or hard data. The IMD assigns 1/3 of weight to executive opinion surveys and 2/3 to

    hard data sources. Since the difference lies in the exact ratio reversal, the “truth” should lie in

    between both findings given the reliable and impartial research conducted by these two world-

    class organizations. Thus, this study takes into consideration both results and the identification

    of the Top 5 nations is based on averaging the sum of rankings by these two organizations.

  • Competitiveness: Top Five Nations Last Decade and Next Decade 397

    Data WEF IMD

    Primary: EOS 2/3 1/3

    Secondary 1/3 2/3

    Figure 3. Calculating the rank of nations in global competitiveness

    There are at least four issues that need clear definitions to identify the Top 5 nations in

    global competitiveness in the last decade and the next decade:

    • The last decade is defined as between the years 2000 and 2009 and the next decade is defined

    as between 2010 and 2019.

    • Consistency in global competitiveness rankings over a period of time is vital to justify the

    Top 5 nations.

    • The Top 5 nations in global competitiveness in the last decade are determined from the

    rankings by both the WEF and IMD from 2000 to 2009. .

    • The Top 5 nations in the next decade are forecasted based on the progress of the measured

    indicators in the global competitiveness rankings by both the WEF and IMD in the last five

    years from 2007 to 2011.These nations must demonstrate progress in higher ranking or the

    ability to maintain their position among the Top 5 in both the WEF and IMD measurements.

    Tables 3 and 4 below show six most competitive nations and thus, identified the Top 5 from

    the WEF and IMD rankings.

    Table 3. Determining the Top 5 Most Competitive Nations Last Decade based on WEF rankings

    Country/WEF 2000 2001 2002 2003 2004 2005 2006/7 2007/8 2008/9 2009/10 Average Rank

    U.S.A 1 2 1 2 2 2 1 1 1 2 1.5 1

    Finland 5 1 2 1 1 1 6 6 6 6 3.5 2

    Singapore 2 4 4 6 7 6 8 7 5 3 5.2 3

    Sweden 12 9 5 3 3 3 9 4 4 4 5.6 4

    Switzerland 9 15 6 7 8 8 4 2 2 1 6.2 5

    Denmark 13 14 10 4 5 4 3 3 3 5 6.4 6

    Source: Global Competitiveness Reports from 2000 to 2009/10, World Economic Forum

    WEF Rankings

    IMD Rankings

    Average of

    WEF + IMD

  • 398 Mark Kam-Loon Loo

    Table 4. Determining the Top 5 Most Competitive Nations Last Decade based on IMD rankings

    Country/IMD 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Average Rank

    U.S.A 1 1 1 1 1 1 1 1 1 1 1 1

    Singapore 2 2 5 4 2 3 3 2 2 3 2.8 2

    Hong Kong 12 6 9 10 6 2 2 3 3 2 5.5 3

    Luxembourg 6 4 3 2 9 10 9 4 5 12 6.4 4

    Canada 8 9 8 6 3 5 7 10 8 8 7.2 5

    Denmark 13 15 6 5 7 7 5 5 6 5 7.4 6

    Source: World Competitiveness Yearbook from 2000 to 2009, Institute of Management Development

    Tables 3 and 4 show WEF and IMD ranked USA and Singapore among the Top 5 in the last

    decade from 2000 to 2009.USA ranks 1stin both measurements while Singapore ranks 3rd

    in WEF

    but 2nd

    in IMD. Finland, Sweden and Switzerland are also in the WEF Top 5 but rank 7th

    , 11th

    and 8th

    respectively in IMD.Likewise, Hong Kong, Canada and Luxembourgare in the IMD Top

    5 but rank 15th

    , 9th

    and 23rd

    in WEF (Luxembourg was listed in WEF from 2003). The

    differences in the rankings of nations between the two measures were expected. As stated earlier,

    to minimize the gap between the two, the Top 5 will be determined by averaging the sum of the

    two measures. This would involve listing the most competitive nations from both lists until a

    clear confirmation of the top 5 can be established as shown in Table 5.

    Table 5. Top 5 most competitive nations based on averages between WEF and IMD rankings

    Country WEF

    Average Rank

    IMD

    Average Rank

    WEF + IMD

    Average Rank Rank

    USA 1.5 1 1 1 1.25 1

    Singapore 5.2 3 2.8 2 4 2

    Finland 3.5 2 7.7 7 5.6 3

    Denmark 6.4 6 7.4 6 6.9 4

    Switzerland 6.2 5 7.7 7 6.95 5

    Sweden 5.6 4 10.8 11 8.2 6

    Canada 10.6 9 7.2 5 8.9 7

    Netherland 10 8 9.6 10 9.8 8

    Hong Kong 15.4 15 5.5 3 10.45 9

    Australia 12.5 14 8.7 9 19.6 10

    Source: Developed by author for this paper based on data from WEF and IMD reports from 2000 to 2009.

  • Competitiveness: Top Five Nations Last Decade and Next Decade 399

    Results

    Top 5 Last Decade 2000-2009

    The results in Table 5 shows the Top 5 nations in global competitiveness in the last decade 2000

    to 2009, from 1st to 5

    th, are USA, Singapore, Finland, Denmark and Switzerland. Denmark may

    be a surprise 4th

    place but it had been a consistent performer at 6th

    place in both the WEF and

    IMD rankings in the last decade, ousting other nations that had suffered fluctuations in their

    rankings.

    Sweden was ranked 4th

    in the WEF is now ranked 6th

    in this analysis that considered IMD’s

    reports. Hong Kong, Luxembourg and Canada were ranked 3rd

    , 4th

    and 5th

    in the IMD list but

    only Hong Kong stays as 9th

    and Canada 7th

    while Luxembourg is out of the top 10 list.

    Top 5 Next Decade 2010-2019

    Predicting the five most competitive nations in the next decade will be based on the progress of

    nations in global competitiveness in the last five years, between 2007 and 2011. The rankings in

    the last five years will give an indication of the ability of the nations to achieve or maintain

    within the Top 5 in global competitiveness. Nations that qualify for the Top 5 should

    demonstrate consistency in rank progress in both the WEF and IMD measures.

    If progress is judged based on year by year improvements, there will be fluctuations as many

    nations go and up down one or two positions each year. One way to measure progress is by

    comparing their average rankings between two periods: 2007-2011 and 2009-2011. If the last

    three years produce a better rank than the last five years, it would be a predictor of indicate

    progress. Again, the rank is calculated based on the WEF and IMD findings and a sufficient

    number of nations have to be investigated until the Top 5 are clearly established. Appendices 1, 2

    and 3 show systematically how the five most competitive nations are identified from the WEF

    and IMD reports in the last five and three years respectively..

    The findings from Appendices 1, 2 and 3 are summarized in Table 6 which shows the

    averages of rankings between WEF and IMD in the last decade 2000-2009, in the last five years

    2007-2011 and in the last three years 2009-2011.

    Table 6. Top 5 Nations in Global Competitiveness in Last 5 and 3 Years

    Country 10 Years

    Country 5 Years

    Country 3 Years

    2000-2009 2007-2011 2009-2011

    USA 1 USA 1 Singapore 1

    Singapore 2 Switzerland 2 Switzerland 1

    Finland 3 Singapore 3 USA 3

    Denmark 4 Sweden 4 Sweden 4

    Switzerland 5 Denmark 5 Denmark 5

    Sweden 6 Canada 6 Canada 6

    Canada 7 Netherlands 7 Finland 7

    Netherlands 8 Finland 8 Netherlands 7

  • 400 Mark Kam-Loon Loo

    Table 6 shows the Top 5 most competitive nations from 1st to 5

    th place from:

    • 2000-2009: USA, Singapore, Finland, Denmark and Switzerland

    • 2007 to 2011: USA, Switzerland, Singapore, Sweden and Denmark

    • 2009 to 2011: Singapore, Switzerland, USA, Sweden and Denmark

    The results show that while USA slipped to 3rd

    rank in the last three years, Switzerland and

    Singapore have progressed to displace USA as 1st rank in the last three years. Switzerland

    moved from 2nd

    to 1st rank while Singapore has made the most significant progress from 3

    rd to

    tying with Switzerland at 1st rank.

    Table 6 also shows that while the Top 5 winners maintained their position consistently in the

    last five and three-year periods, visibly missing is Finland which was ranked 3rd

    in the last

    decade but now fallen to rank 7th.

    Sweden instead has a made a commendable comeback from

    rank 6th

    in the last decade to rank 4th

    in both time periods. Other nations that may vie for a spot in

    the Top 5 next decade include Canada that has improved from rank 7th

    last decade to rank 6th

    and

    Netherlands from rank 8th

    last decade to rank 7th

    .

    Changes are also evident in the rankings of the Top 5 between the WEF and IMD findings

    over the two time periods.While the IMD maintains USA as rank 1st, the WEF finds that USA

    had slipped to 2nd

    place in 2009, 4th

    in 2010 and 5th

    in 2011 signifying an unprecedented decline

    in global competitiveness for the most powerful nation in the world. Singapore, a small nation in

    physical size, ranked 3rd

    in the last five years has made giant strides to tie at rank 1st with

    Switzerland in the last three years.

    Given the trend that even formidable nations such as the USA can decline in global

    competitiveness, Canada, Finland and the Netherlands have strong potential to become the top 5

    nations in the next decade. As for now, the performance of nations in the last 5 and 3 years

    compared seem to favour Singapore, Switzerland, USA, Sweden and Denmark in the top 5 most

    competitive nations in the world.

    What are the secrets of success for these five most competitive nations? .

    Discussion

    The factors of success for the Top 5 nations in global competitiveness will be discussed in

    ascending order from rank 5th

    to 1st.

    The information in the tables below is sourced from the

    WEF’s Global Competitiveness Reports (GCR) from 2007 to 2011. The numbers represent the

    rank that each nation achieved in the 12 pillars of competitiveness. The rank within the (bracket)

    represents the rank of the average performance of competitiveness over the last five years to

    meet the criteria of consistency.

    Only the pillars that attained an average rank from 1 to 5.9 are discussed as they represent

    the Top 5 positions in each measurement of competitiveness. As it is an average rank from the

    summated performance over the past five years, a nation that has the best consistent performance

    may not necessarily have a perfect score of 1.

    There are many items of measurement to form a pillar of competitiveness. Only the items

    that gained 1strank will be outlined to focus on each nation’s most notable strength in the specific

    pillar of competitiveness, otherwise there will be an overly long list of achievements for the

    purpose of this paper.

  • Competitiveness: Top Five Nations Last Decade and Next Decade 401

    5th

    Most Competitive: Denmark

    Denmark achieved 4th

    place in the last decade but dropped by one position to 5th

    in the last 5 and

    3 years. Table 7 below shows Denmark’s rankings in the 12 pillars of competitiveness in the last

    five years. The last row in Table 7 shows the average performance in the last five years.

    Table.7. Denmark’s rankings in 12 Pillars of Competitiveness between 2007 and 2011

    Den

    mar

    k

    Subindexes

    Basic requirements Efficiency enhancers

    Innovation and

    Sophistication factors

    Ran

    k

    Inst

    itu

    tio

    ns

    Infr

    astr

    uct

    ure

    Mac

    roec

    on

    om

    ic

    stab

    ilit

    y

    Hea

    lth a

    nd p

    rim

    ary

    edu

    cati

    on

    Ran

    k

    Hig

    her

    ed

    uca

    tion

    an

    d

    trai

    nin

    g

    Go

    od

    s m

    ark

    et

    effi

    cien

    cy

    Lab

    ou

    r m

    arket

    effi

    cien

    cy

    Fin

    anci

    al m

    arket

    dev

    elopm

    ent

    Tec

    hn

    olo

    gic

    al

    read

    ines

    s

    Mar

    ket

    siz

    e

    Ran

    k

    Busi

    nes

    s

    sop

    his

    tica

    tio

    n

    Inn

    ov

    atio

    n

    2011/12 8 5 10 31 28 9 6 16 6 17 4 53 8 6 10

    2010/11 7 5 13 16 20 9 3 13 5 18 6 52 9 7 10

    2009/10 4 3 12 14 6 6 2 7 5 8 4 49 7 8 10

    2008/09 4 3 8 12 4 3 2 4 5 4 3 46 7 5 10

    2007/08 1 2 7 10 3 4 3 3 5 6 5 45 8 6 10

    Average 4.8 3.6 10 16.6 12.2 6.2 3.2 8.6 5.2 10.6 4.4 49 7.8 6.4 10

    Source: Global Competitiveness Report 2011-2012, World Economic Forum

    The average rankings show that Denmark stays within the Top 5 in Basic Requirements at

    4.8 but outside Top 5 in Efficiency Enhancers at 6.2 and Innovation and Sophistication factors at

    7.8.

    Table 7 also shows Denmark has four pillars with Top 5 rankings:

    • Higher Education and Training (3.2): Denmark invests 7.8% of its GDP in secondary and

    post-secondary education, and job training and employee development (Central Intelligence

    Agency, 2011).It has a high rate of enrolment in secondary and post-secondary educational

    institutions but if citizens lack formal education, Denmark's companies provide on the job

    training and employee development. This combination of a strong education system and

    excellent job training has resulted in a highly productive, well-educated and stable labour

    market (Schwab, 2011).

    • Institutions (3.6): Denmark is ranked 1st in two areas - lowest cost of business affected by

    organized crime, and ethical behaviour of firms.

    • Technological Readiness (4.4): The 2011/12 Global Competitiveness Index shows Denmark

    at 3rd

    place with a score of 6.2 of 7, narrowly beaten by Switzerland and Sweden both at 6.3.

  • 402 Mark Kam-Loon Loo

    Among the Top 5 Nations, Denmark invests 3.02% of GDP in research and development

    behind Sweden and Switzerland (World Bank, 2012; Appendix 4)..

    • Labour Market Efficiency (5.2): Denmark is ranked 1st in two areas – hiring and firing

    practices, and lowest redundancy costs in weeks of salary.Although Denmark is ranked 10 in

    Infrastructure, it has the best quality of electricity supply and 7.4 million mobile

    subscriptions for 5.53 million people (Global Competitiveness Report 2011-2012).

    4th

    Most Competitive: Sweden

    Sweden achieved 6th

    place in the last decade but climbed to 4th

    placein the last five and three

    years. Table 8 shows that Sweden stays in the Top 5 in Innovation and Sophistication at 4th

    and

    Basic Requirements at 5th

    but outside the Top 5 in Efficiency Enhancers at 7.2th

    .

    Table 8. Sweden’s rankings in 12 Pillars of Competitiveness between 2007 and 2011

    Sweden

    Subindexes

    Basic requirements Efficiency enhancers Innovation and

    Sophistication factors

    Ran

    k

    Inst

    itu

    tio

    ns

    Infr

    astr

    uct

    ure

    Mac

    roec

    on

    om

    ic

    stab

    ilit

    y

    Hea

    lth a

    nd p

    rim

    ary

    edu

    cati

    on

    Ran

    k

    Hig

    her

    ed

    uca

    tion

    an

    d

    trai

    nin

    g

    Go

    od

    s m

    ark

    et

    effi

    cien

    cy

    Lab

    ou

    r m

    arket

    effi

    cien

    cy

    Fin

    anci

    al m

    arket

    dev

    elopm

    ent

    Tec

    hn

    olo

    gic

    al

    read

    ines

    s

    Mar

    ket

    siz

    e

    Ran

    k

    Busi

    nes

    s

    sop

    his

    tica

    tio

    n

    Inn

    ov

    atio

    n

    2011/12 4 2 13 13 18 7 2 7 25 11 2 31 2 2 2

    2010/11 4 2 10 14 18 5 2 5 18 13 1 34 3 2 5

    2009/10 5 2 14 15 12 7 3 4 19 12 1 32 4 4 5

    2008/09 6 4 13 15 8 9 3 7 26 8 2 30 6 7 5

    2007/08 6 6 12 17 5 8 2 7 37 9 1 34 5 4 6

    Average 5.0 3.2 12.4 14.8 12.2 7.2 2.4 6.0 25.0 10.6 1.4 32.2 4.0 3.8 4.6

    Source: Global Competitiveness Report 2011-2012, World Economic Forum

    Sweden has five pillars with average Top 5 rankings, one above Denmark:

    • Technological Readiness (1.4): Sweden ranks 1st in availability of latest technologies and

    firm-level technology absorption.

    • Higher Education and Training (2.4): Sweden spends about 6.6% of GDP on education and

    as a result, Sweden boasts a 99% literacy rate (Central Intelligence Agency, 2012).

    • Institutions (3.2): Sweden ranks 1st in three areas - no favouritism in decisions of government

    officials, efficacy of corporate boards and protection of minority shareholders’ interests.

    • Business Sophistication (3.8): Sweden is ranked 1st in two areas – firms use sophisticated

    business tools and techniques, and willingness to delegate authority.

  • Competitiveness: Top Five Nations Last Decade and Next Decade 403

    • Innovation (4.6): Sweden leads the Top 5 nations in research and development investment

    with 3.62% of GDP (World Bank, 2012; Appendix 4). Sweden boasts of world famous

    multinational firms such as Ikea, Volvo and Ericsson Telecommunications. The world pays

    tribute to Sweden’s ability to detect radioactivity that led to the discovery of the Chernobyl

    disaster in 1986.

    Although Sweden ranks 6th

    in GoodsMarket Efficiency, it earns top position in effectiveness of

    anti-monopoly policies in that pillar.Similarly, though it ranks 25th

    in LabourMarket Efficiency,

    it ranks 1stin reliance on professional management in that category.

    3rd

    Most Competitive: The United States of America

    The USA ranked 1stin the last decade but dropped to rank 3

    rd in the last three years. If its

    competitiveness continues to slide, the USA may lose its place in the top 5 in the next decade.

    Although the USA has ranked 6th

    in 2006/07, it has consistently maintained 1st or 2

    ndrank until

    recent years when it slipped to 4th

    in 2010/11 and 5th

    in 2011/2012.

    Table 8 shows that the USA has a strong lead in Efficiency Enhancers at 1.8, an enviable

    position at 3.2 in Innovation and Sophistication factors but significantly weaker than the other

    Top 5 nations in Basic Requirements at 28.2.

    Table 9. The USA’s rankings in 12 Pillars of Competitiveness between 2007 and 2011

    USA

    Subindexes

    Basic requirements Efficiency enhancers

    Innovation and

    Sophistication

    factors

    Ran

    k

    Inst

    itu

    tio

    ns

    Infr

    astr

    uct

    ure

    Mac

    roec

    on

    om

    ic s

    tab

    ilit

    y

    Hea

    lth a

    nd p

    rim

    ary

    edu

    cati

    on

    Ran

    k

    Hig

    her

    ed

    uca

    tion

    an

    d

    trai

    nin

    g

    Go

    od

    s m

    ark

    et e

    ffic

    ien

    cy

    Lab

    ou

    r m

    arket

    eff

    icie

    ncy

    Fin

    anci

    al m

    arket

    dev

    elopm

    ent

    Tec

    hn

    olo

    gic

    al r

    ead

    ines

    s

    Mar

    ket

    siz

    e

    Ran

    k

    Bu

    sin

    ess

    sop

    his

    tica

    tio

    n

    Inn

    ov

    atio

    n

    2011/12 36 39 16 90 42 3 13 24 4 22 20 1 6 10 5

    2010/11 32 40 15 87 42 3 9 26 4 31 17 1 4 8

    2009/10 28 34 8 93 36 1 7 12 3 20 13 1 1 5 1

    2008/09 22 29 7 66 34 1 5 8 1 9 11 1 1 4 1

    2007/08 23 33 6 75 34 1 5 12 1 11 9 1 4 7 1

    Average 28.2 35 10.4 82.2 37.6 1.8 7.8 16.4 2.6 18.6 14 1 3.2 6.8 2

    Source: Global Competitiveness Report 2011-2012, World Economic Forum

  • 404 Mark Kam-Loon Loo

    Table 8 shows that USA only Top 5 rankings in three pillars, behind Denmark and Sweden

    with four and five pillars respectively. Nevertheless, the three pillars have been well maintained

    and should continue to remain strong if the USA rebounds from the recession and its associated

    subprime market conditions.

    • Market size (1):The USA has the highest Gross Domestic Product (GDP) at $14,658 million,

    far ahead of the second highest nation, China at $10,086 million. It has the largest domestic

    population with purchasing power, providing the base for American firms to incubate and

    perfect business processes before going abroad. Thus, it also boasts of the largest

    international market, exporting $1.3 trillion in goods and services in 2010 (Central

    Intelligence Agency, 2012). With huge domestic consumption and world markets, US firms

    are able to compete on a larger scale than most firms in other nations.

    • Innovation (2): The USA excels in two types of innovation: technology and marketing. One

    clear competitive advantage over the last two decades has been its ever expanding capacity

    for technological innovations. From IBM to Apple and Windows to Yahoo and Google to

    Facebook and Twitter, the USA leads in the cyber world of communication and

    entertainment. While it is important to generate new products, the ability to market products

    globally is equally important. The USA is undisputedly the world’s leader in marketingand

    advertising (Bhide, 2009). USA is 4th among the Top 5 in investment in research and

    development with 2.79% GDP, behind Sweden, Switzerland and Denmark (world Bank,

    2012; Appendix 4)

    • Labour market efficiency (2.6): The USA is competitive attracting and retaining talent from

    around the world to continuously help to enhance the quality of scientists, engineers and

    educational institutions to fuel the growth of innovation (Schwab, 2011). It has 27% of the

    world’s largest 500 corporations (Fortune, 2011) that offer employees the best cutting edge

    technologies to compete internationally (Bhide, 2009).

    Although the USA has an average rank of 10.4 in Infrastructure, its logistical systems are

    massive. It has the highest scheduled available airline seat kilometer per week at 32,086, three

    times higher than the nearest competitor, China at 10,157. It has the highest number of airports

    at 15,097 compared to the second highest, Brazil at 4.072. It also boasts of the world’s longest

    developed roadway at 6.5 million kilometers and railway at 224, 792 kilometers(Central

    Intelligence Agency, 2012).

    1st in Global Competitiveness: Switzerland and Singapore

    In the last decade 2000-2009, Switzerland was placed 5thwhile Singapore was 2nd. However, in

    the last five years 2007-2011, Switzerland progressed to 2nd rank while Singapore slipped to 3rd

    place. In the last three years 2009-2011, Singapore climbed to tie with Switzerland in 1st rank.

    Switzerland

    Switzerland has been incredibly competitive over the past decade. They have outperformed the

    average level of performance among developed nations in almost all pillars of competitiveness.

    Overall, Switzerland maintains Top 5 positions in Innovation and Sophistication at 1.8, Basic

    Requirements 2.8 and Efficiency Enhancers at 4.8 as shown in Table 10.

  • Competitiveness: Top Five Nations Last Decade and Next Decade 405

    Table 10. Switzerland’s rankings in 12 Pillars of Competitiveness between 2007 and 2011

    Year

    Subindexes

    Basic requirements Efficiency enhancers

    Innovation and

    Sophistication

    factors

    Ran

    k

    Inst

    itu

    tio

    ns

    Infr

    astr

    uct

    ure

    Mac

    roec

    on

    om

    ic s

    tab

    ilit

    y

    Hea

    lth a

    nd p

    rim

    ary

    ed

    uca

    tio

    n

    Ran

    k

    Hig

    her

    ed

    uca

    tion

    an

    d t

    rain

    ing

    Go

    od

    s m

    ark

    et e

    ffic

    ien

    cy

    Lab

    ou

    r m

    arket

    eff

    icie

    ncy

    Fin

    anci

    al m

    arket

    dev

    elop

    men

    t

    Tec

    hnolo

    gic

    al r

    eadin

    ess

    Mar

    ket

    siz

    e

    Ran

    k

    Busi

    nes

    s so

    phis

    tica

    tion

    Inn

    ov

    atio

    n

    2011/12 3 6 5 7 8 2 3 5 1 7 1 39 1 3 1

    2010/11 2 7 6 5 7 4 4 4 2 8 7 36 2 4 2

    2009/10 3 8 5 17 21 3 6 5 2 14 3 36 3 3 2

    2008/09 2 5 3 10 17 8 7 6 3 21 5 35 2 2 3

    2007/08 4 4 22 14 29 7 7 6 3 21 3 37 1 2 2

    Average 2.8 6 8.2 10.6 16.4 4.8 5.4 5.2 2.2 14.2 3.8 36.6 1.8 2.8 2

    Source: Global Competitiveness Report 2011-2012, World Economic Forum

    Table 10 shows that Switzerland has successfully maintained Top 5 positions in six pillars:

    • Innovation (2): Switzerland ranks 1st in university-industry collaboration, resulting in the

    lowest R&D cost per patent in the world (Ruhli and Schuppisser, 1994). Switzerland is 2nd

    in

    research and development investment with 3.62% GDP behind Sweden (World Bank, 2012;

    Appendix 4).

    • Labour Market (2.2): Switzerland ranks 1st in two measurements - cooperation in labour-

    employee relations and brain retention.With a 99% literacy rate (Central Intelligence

    Agency, 2011), Switzerland’s globally recognized tertiary management and science

    programs supply human capital as a competitive advantage – a well-educated, highly skilled

    and productive workforce (Rulhli&Schuppisser, 2004). With university-industry

    collaboration, on-the-job training and intellectual property protection, Switzerland has been

    able to retain talent.

    • Business sophistication (2.8): Switzerland ranks 1st in local supplier quality, indicating its

    suppliers are tops in efficiency and technological capability, internationally competitive and

    assist clients in new product and process development.

  • 406 Mark Kam-Loon Loo

    • Technological readiness (3.8): Switzerland tops in broadband internet subscriptions.As

    members of both the European Patent Convention and Patent Cooperation Treaty,

    Switzerland protects intellectual property locally and globally (Political Risk Yearbook,

    2011) promoting technological innovations.

    • Goods market efficiency (5.2): Switzerland tops in the extent of market dominance, which

    means healthy competition among businesses.

    • Higher education and training (5.4): Switzerland ranks 1st in three indicators – quality of

    education system, local availability of specialized research and training services, and extent

    of staff training. Although Switzerland’s excellent tertiary education system has only a

    49.4% attendance rate, Swiss companies provide workers with on-the-job training to mitigate

    inefficiencies (World Economic Forum, 2012).

    Although not mentioned explicitly in the reports, one of the contributing factors to Switzerland’s

    success is its excellent international relations. While Switzerland may not be a member of the

    European Union (EU),it provides economic activities that meet the EU standards (Central

    Intelligence Agency, 2011) and reap member benefits such as lowered trade barriers (Political

    Risk Year Book, 2011). As a member of the European Free Trade Association which includes

    (Political Risk Year Book, 2011), Switzerland enjoys free trade with Lichtenstein, Iceland and

    Norway resulting in increased trade. Finally, Switzerland has a history of neutrality that avoided

    the explicit costs of war and trade barriers following bitter wars, such as World War II.

    Singapore

    Singapore is the only Asian nation in the Top 5. It has maintained a high average rank of 2.4 in

    both Basic Requirements and Efficiency Enhancers but only managed 11th

    in Innovation and

    Sophistication.

    Table 11. Singapore’s rankings in 12 Pillars of Competitiveness between 2007 and 2011

    Sin

    gap

    ore

    Subindexes

    Basic requirements Efficiency enhancers

    Innovation and

    sophistication

    factors

    Ran

    k

    Inst

    itu

    tio

    ns

    Infr

    astr

    uct

    ure

    Mac

    roec

    on

    om

    ic s

    tab

    ilit

    y

    Hea

    lth a

    nd p

    rim

    ary

    ed

    uca

    tio

    n

    Ran

    k

    Hig

    her

    ed

    uca

    tion

    an

    d t

    rain

    ing

    Go

    od

    s m

    ark

    et e

    ffic

    ien

    cy

    Lab

    or

    mar

    ket

    eff

    icie

    ncy

    Fin

    anci

    al m

    arket

    dev

    elop

    men

    t

    Tec

    hnolo

    gic

    al r

    eadin

    ess

    Mar

    ket

    siz

    e

    Ran

    k

    Busi

    nes

    s so

    phis

    tica

    tion

    Inn

    ov

    atio

    n

    2011/12 1 1 3 9 3 1 4 1 2 1 10 37 11 15 8

    2010/11 3 1 5 33 3 1 5 1 1 2 11 41 10 15 9

  • Competitiveness: Top Five Nations Last Decade and Next Decade 407

    2009/10 2 1 4 35 13 2 5 1 1 2 6 39 10 14 8

    2008/09 3 1 4 21 16 2 8 1 2 2 7 41 11 14 11

    2007/08 3 3 3 24 19 6 16 2 2 3 12 50 13 16 11

    Average

    2.4 1.4 3.8 24.4 10.8 2.4 7.6 1.2 1.6 2 9.2 41.6 11 14.8 9.4

    Source: Global Competitiveness Report 2011-2012, World Economic Forum

    Table 11 shows Singapore has five strong pillars:

    • Goods Market Efficiency (1.2): Singapore tops in business impact on rules on foreign direct

    investment and ease of customs procedures, thus attracting foreign investment and

    encouraging international trade.

    • Institutions (1.4): Singapore tops in five indicators – public trust of politicians, efficiency in

    providing goods and services, ease of doing business, efficient legal framework in settling disputes and transparency of government policy making. Singapore maintains high

    government efficiency and a low corruption rate among developing nations known for higher

    levels of corruption. The IMD reports Singapore as one of the six nations that has managed a

    balance between government and business efficiency with a zero gap.

    • Labour Market Efficiency (1.6): Singapore is number 1 in rewarding pay according to

    productivity. Singapore today is the only first world status nation in South East Asia and

    nearly one in every six households has more than $1 million in assets, making it the densest population of wealthy households in the world, according to a new report by Boston

    Consulting Group (Wong, 2011). • Financial Market Development (2): Singapore has successfully maintained its status as the

    financial hub of South East Asia, and in 2011 established itself as world number 1, defeating

    Hong Kong narrowly.

    • Infrastructure (3): Singapore has relentlessly improved its quality of both port and air

    transport infrastructure, earning top spot respectively in the world.

    Singapore has an average rank of 7.6 (within world top 10) in higher education and training but it is 1st in quality of math and science education. While Singapore may be 5th among the Top 5 in

    research and development investment with 2.66% GDP, it is the only South-East Asian nation to

    hold a commendable 9th position globally in GDP% investment in R & D. In the Global Competitiveness Report 2011-2012, Singapore outperformed the average

    performance of innovation-driven economies in 10 pillars of competitiveness: Institutions, Infrastructure, Macroeconomic Environment, Health and Primary Education, Higher Education

    and Training, Goods Market Efficiency, Labour Market Efficiency, Financial Market

    Development and Technological Readiness. Its performance in the remaining two pillars, Market Size and Business Sophistication, matches the level of the innovation-driven economies.

    Switzerland and Singapore are competing neck to neck in the race for first place in global

    competitiveness. Both have multiethnic populations with public schools that teach ethnic

    languages.Both have a strong mandate against corruption that significantly reduces foreign direct

  • 408 Mark Kam-Loon Loo

    investment, international trade and economic growth (Hill, 2011). Both have strong banking

    systems and comparable Basic Requirements. While Singapore is twice stronger at 2.4 than

    Switzerland’s 4.8 in Efficiency Enhancers, Switzerland seems better positioned to lead as

    number 1 in the next decade owing to its Innovation and Sophistication at a consistent 1st or 2

    nd,

    far ahead of Singapore’s 11th

    place.

    Recommendations for the Top 5

    Despite being great nations, the Top 5 leading nations in global competitiveness have

    weaknesses to overcome. Tables 12 and 13 below compare between the average performance in

    the last five years and in the last three years in the measurements ranked by the WEF and IMD

    respectively.These two tables reveal the specific areas each nation has to arrest further decline in

    global competitiveness.

    Table 12 compares the performance of the Top 5 nations in the three stages of development

    measured by the WEF between the last five years 2007-2011 and the last three years 2009-2011.

    Table 12. Performance of Top 5 Nations in the WEF’s Three Stages of Development

    WEF

    Country

    GC

    I R

    ankin

    g

    2007-2

    011

    GC

    I R

    ank

    ing

    20

    09

    -20

    11 Subindexes

    Stage 1: Basic requirements Stage 2: Efficiency

    enhancers

    Stage 3: Innovation and

    Sophistication factors

    2007-2011 2009-2011 2007-2011 2009-2011 2007-2011 2009-2011

    Switzerland 1.4 1 2.8 2.7 4.8 3.0 1.8 2

    USA 2.6 2.7 28.2 32.0 1.8 2.3 3.2 3.7

    Sweden 3.3 3 5 4.3 7.2 6.3 4 3

    Singapore 4 3.7 2.4 2.0 2.4 1.3 11 10.3

    Denmark 5.6 5.7 4.8 6.3 6.2 8 7.8 8

    Source: Global Competitiveness Report 2011-2012, World Economic Forum

    Table 12 shows that Sweden and Singapore have both improved in all three stages while the

    other three countries showed decline in one or more stages.Switzerland has slipped a little in

    Stage 3 Innovation and Sophistication factors by 0.2 from 1.8 to 2 but no seeming cause for

    alarm as yet. Denmark has dipped in all three stages but manages to stay within the Top 10.

    USA has declined in all stages but the most alarming decline is in Stage 1 Basic Requirements,

    declining by almost four places from 28.2 to 32.

    Comparing the stages of development, Stage 1 Basic Requirements has two countries, USA

    and Denmark in decline. Stage 2 Efficiency Enhancers finds Denmark and USA again slipping

    in competitive positions. Finally, Stage 3 Innovation and Sophistication factors revealthree

    countries – USA, Denmark and Switzerland – declining in competitiveness.

    Overall, while the WEF average rankings between the last five and three years show

    declines and improvements, they are not dramatic changes except in the case of USA in Basic

    Requirements that has slipped outside the Top 30 position.

  • Competitiveness: Top Five Nations Last Decade and Next Decade 409

    Table 13. Performance of Top 5 Nations in the IMD’s Four Factors

    IMD Economic

    Performance

    Government Efficiency Business Efficiency Infrastructure

    Country 2007-2011 2009-2011 2007-2011 2009-2011 2007-2011 2009-2011 2007-2011 2009-2011

    Switzerland 12.2 12.7 3 3 7.4 7 3 3

    USA 1 1 19.6 20.3 9.6 1.3 1 1

    Sweden 17 15.3 10.6 9.3 8 12 3.2 3

    Singapore 5 6 1.4 1.7 2.6 6.3 7 9.7

    Denmark 27.4 31 7.2 9.3 5.4 10 5 4.7

    Source: World Competitiveness Yearbook 2011, Institute of Management Development

    Table 13 shows that while WEF rated Switzerland and Singapore as improving in all areas,

    the IMD shows the two nations declined. Switzerland has slightly declined in Economic

    Performance by 0.5 from 12.2 to 12.7. Singapore has declined in every area especially in

    Business Efficiency by 3.7 from 2.6 to 6.3 and Infrastructure by 2.7 from 7 to 9.7. Nevertheless,

    Singapore remains in the Top 10 in every factor.

    Sweden has improved in all areas but declined in Business Efficiency by 4 positions from 8

    to 12. Denmark has also slipped rather drastically in Business Efficiency 4.6 from 5.4 to 10. In

    contrast, USA has improved dramatically in Business Efficiency by 8.3 from 9.6 to 1.3. The

    USA has declined slightly by 0.7 from 19.6 to 20.3.

    Comparing the four factors, the most improved factor is Infrastructure with only Singapore

    showing a decline. However, each of the other three factors, Economic Performance,

    Government Efficiency and Business Efficiency, has three countries in decline.

    In Economic Performance, Denmark has a far lead over Singapore and Switzerland in

    decline. With an average rank of 31 in the last three years, Denmark has to work hard to reverse

    the slide.

    In Government Efficiency, although Singapore and Denmark need to arrest further decline,

    it is the USA that has to improve dramatically to prevent it from affecting negatively the stellar

    progress in Business Efficiency improved from 9.6 to 1.3. Despite dropping by 0.3 from 1.4 to

    1.7, Singapore is still the global model for Government Efficiency.

    In Business Efficiency, Denmark, Sweden and Singapore has slipped by nearly four or more

    positions. Denmark suffered the worst drop but managed to stay within Top 10 but Sweden has

    ejected itself from the Top 10 sliding from 8 to 12. Singapore has also declined from an enviable

    2.6 to 6.3. All three nations need to improve their Business Efficiency.

    Limitation and Future Research

    While care has been taken in this study to produce the most credible results, the dramatically

    different rankings of many nations between the two world class research organizations – WEF

    and IMD – remain controversial. However, no other global organizations are as thorough and

    authoritative as these two measurements. Unless a third organization comes up with a measuring

    instrument that can reflect a middle path, reconciling the two sets of findings, these two

    measurements remain the most authoritative sources in global competitiveness.

    Finally, future research is encouraged to study and monitor emerging nations in global

    competitiveness that will help identify nations for international investors. Governments and

  • 410 Mark Kam-Loon Loo

    captains of industry in respective nations should conduct yearly evaluations of their global

    competitiveness and take measures to improve areas of weaknesses and raise the standard of

    living for their citizens.

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  • Competitiveness: Top Five Nations Last Decade and Next Decade 411

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    3:00 AM EDT, http://finance.yahoo.com/news/pf_article_112859.html.Accessed April 21, 2012.

    29. World Bank 2012, http://data.worldbank.org/indicator/GB.XPD.RSDV.GD.ZS, accessed April 23, 2012

    30. World Competitiveness Yearbook 2000, Institute of Management Development, Lausanne, Switzerland

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    34. World Competitiveness Yearbook 2004, Institute of Management Development, Lausanne, Switzerland

    35. World Competitiveness Yearbook 2005, Institute of Management Development, Lausanne, Switzerland

    36. World Competitiveness Yearbook 2006, Institute of Management Development, Lausanne, Switzerland

    37. World Competitiveness Yearbook 2007, Institute of Management Development, Lausanne, Switzerland

    38. World Competitiveness Yearbook 2008, Institute of Management Development, Lausanne, Switzerland

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    Appendix 1.WEF and IMD Rankings of Top 8 Nations in the last five years from 2007 to

    2011

    Country/WEF 2007/08 2008/09 2009/10 2010/11 2011/12 Average Rank

    Switzerland 2 2 1 1 1 1.4 1

    United States 1 1 2 4 5 2.6 2

    Sweden 4 4 4 2 3 3.4 3

    Singapore 7 5 3 3 2 4.0 4

    Denmark 3 3 5 9 8 5.6 5

    Finland 6 6 6 7 4 5.8 6

    Netherlands 10 8 10 8 7 8.6 7

    Canada 13 10 9 10 12 10.8 8

    Country/IMD 2007 2008 2009 2010 2011 Average Rank

    USA 1 1 1 3 1 1.4 1

    Singapore 2 2 3 1 3 2.2 2

    Hong Kong 3 3 2 2 1 2.2 2

    Switzerland 6 4 4 4 5 4.6 4

    Sweden 9 9 6 6 4 6.8 5

    Canada 10 8 8 7 7 8 6

    Denmark 5 6 5 13 12 8.2 7

    Luxembourg 4 5 12 11 11 8.6 8

  • 412 Mark Kam-Loon Loo

    Appendix 2: WEF and IMD Rankings of Top 8 Nations in the last 3 years from 2009 to

    2011

    Country/WEF 2009-

    2010

    2010-

    2011

    2011-

    2012 Average

    Country/IMD

    2009 2010 2011 Average

    Switzerland 1 1 1 1.00 USA 1 3 1 1.67

    Singapore 3 3 2 2.67 Hong Kong 2 2 1 1.67

    Sweden 4 2 3 3.00 Singapore 3 1 3 2.33

    USA 2 4 5 3.67 Switzerland 4 4 5 4.33

    Finland 6 7 4 5.67 Sweden 6 6 4 5.33

    Denmark 5 9 8 7.33 Canada 8 7 7 7.33

    Netherlands 10 8 7 8.33 Denmark 5 13 12 10.00

    Canada 9 10 12 10.33 Luxembourg 12 11 11 11.33

    Appendix 3: Top 5 Nations in the Last Five and Three Years

    2007-2011 (Last 5 Years) 2009-2011 (Last 3 Years)

    Country

    WEF

    2007-

    2011

    IMD

    2007-

    2011

    Average Rank

    Country

    WEF

    2009-

    2011

    IMD

    2009-

    2011

    Average Rank

    U.S.A 2 1 1.5 1 Singapore 2 3 2.5 1

    Switzerland 1 4 2.5 2 Switzerland 1 4 2.5 1

    Singapore 4 2 3 3 U.S.A 5 1 3 3

    Sweden 3 5 4 4 Sweden 3 5 4 4

    Denmark 5 8 6.5 5 Denmark 7 8 7.5 5

    Canada 10 6 8 6 Canada 10 7 8.5 6

    Netherlands 9 10 9.5 7 Finland 5 15 10 7

    Finland 6 15 11 8 Netherlands 9 11 10 7

    Appendix 4: GDP Percentage Investment in Research and Development

    Country 2007 2008 2009 2010

    Israel 4.80 4.66 4.27 NA

    Finland 3.47 3.72 3.96 3.84

    Sweden 3.40 3.70 3.62 NA

    Japan 3.44 3.45 NA NA

    Korea 3.21 3.36 NA NA

    Switzerland NA 3 NA NA

    Denmark 2.58 2.87 3.02 NA

    USA 2.67 2.79 NA NA

    Singapore 2.37 2.66 NA NA

    Source: World Bank 2012, http://data.worldbank.org/indicator/GB.XPD.RSDV.GD.ZS, accessed April 23, 2012

    NA = Not available.