Ireland ranks 7th out of 61 countries benchmarked in the 2016 IMD World Competitiveness Yearbook. This year’s list is topped by Hong Kong, Switzerland, the US and Singapore.
This is a significant jump from last year, when Ireland ranked 16th in the competitiveness rankings.
The IMD World Competitiveness Center, a research group within the IMD Business School, has published the ranking each year since 1989 and it is widely regarded as the foremost annual assessment of the competitiveness of countries.
This year’s rankings saw the US lose its status as the world’s most competitive economy to Hong Kong.
‘There is no room for complacency. Ireland must remain conscious of maintaining improved competitiveness in an export-led economy, the provision of suitable skills coming through the workforce and Ireland must continue to provide business advantages that resonate with global companies’
– MARTIN SHANAHAN, IDA IRELAND
Prof Arturo Bris, director of the IMD World Competitiveness Center, said a consistent commitment to a favourable business environment was central to Hong Kong’s rise and that Switzerland’s small size and its emphasis on a commitment to quality have allowed it to react quickly to keep its economy on top.
“The USA still boasts the best economic performance in the world, but there are many other factors that we take into account when assessing competitiveness,” he said.
“The common pattern among all of the countries in the top 20 is their focus on business-friendly regulation, physical and intangible infrastructure and inclusive institutions.”
How Ireland ranked
Each ranking is based on analysis of more than 340 criteria derived from four principal factors: economic performance, government efficiency, business efficiency and infrastructure. Responses from an in-depth survey of more than 5,400 business executives, who are asked to assess the situation in their own countries, are also taken into consideration.
Ireland ranked 7th based on a score of 91.540. It was narrowly surpassed by Singapore, Sweden and Denmark, but ahead of the Netherlands, Norway and Canada.
Ireland achieved first spot in a number of important sub factors, including:
- Real GDP growth
- Flexibility and adaptability of people
- Real GDP growth per capita
- Investment incentives
- National culture
- Finance skills
“IDA Ireland has set ambitious investment and jobs targets in its current strategy Winning: Foreign Direct Investment 2015-2019,” said IDA Ireland CEO Martin Shanahan.
“However, in order to achieve these targets, we will have to remain vigilant and monitor our competitiveness in areas like costs, property availability and talent.
“Major global companies continue to set up operations and expand in significant numbers here. Amazon announced that it is adding a further 500 highly-skilled roles in Dublin due to the company’s ability to attract talent here.
“In recent years, Ireland has regained valuable competitiveness, while continuing to offer a strong skills base to prospective companies looking to invest here. This has helped to deliver a very strong FDI performance by Ireland.
“However, there is no room for complacency. Ireland must remain conscious of maintaining improved competitiveness in an export-led economy, the provision of suitable skills coming through the workforce and Ireland must continue to provide business advantages that resonate with global companies,” Shanahan said.
Spiralling into an unequal world
While the IMD Competitiveness rankings focused on business excellence and regulation being drivers for effective economic prowess, they could not hide the real elephant in the room, the growing gap between rich and poor.
‘Unfortunately, the problem for many countries is that wealth accumulation by the rich doesn’t yield any benefits for the poor in the absence of proper social safety nets’
– PROF ARTURO BRIS, IMD WORLD COMPETITIVENESS CENTER
“Since 1995, the world has become increasingly unequal in terms of income differences among countries, although the rate of increase is now slowing,” IMD’s Bris said.
“The wealth of the richest countries has grown every year except for the past two, while the poorer countries have seen some improvement in living conditions since the millennium.
“Unfortunately, the problem for many countries is that wealth accumulation by the rich doesn’t yield any benefits for the poor in the absence of proper social safety nets.
“Innovation-driven economic growth in poorer countries improves competitiveness, but it also increases inequality. This is obviously an issue that demands long-term attention,” Bris concluded.
Dublin image via Shutterstock