Ranking of the most competitive countries around the world
Just as a well-designed ship needs fair weather for a smooth voyage, companies need a supportive ecosystem to get started and continue to be successful.
Rankings of the most competitive countries attempt to quantify this subsidy directly, while finding out which economies have the best frameworks for business to thrive. Examining how rankings change over time can also tell us a lot about how countries fare compared to others.
In the drawing above, Julie Paisley Uses Global Competitiveness Ranking The International Institute for Management Development (IMD) report to chart the top 20 most competitive countries between 2019 and 2023.
How is business competitiveness measured?
IMD examines countries on the basis of four metrics across multiple sub-factors:
- economic performance:
Domestic economy, international trade, international investment, employment, prices
- Government Efficiency:
Public finance, tax policy, institutional framework, commercial legislation, and societal framework
- Business Efficiency:
Productivity and efficiency, labor market, finance, management practices, attitudes and values
Basic Infrastructure, Technological Infrastructure, Scientific Infrastructure, Health and Environment, Education
These metrics are scored based on a combination of rigorous statistics, surveys from partner institutes, and supplemental data.
What are the best and worst countries for business?
Denmark It retained the top spot as the most business-friendly country in 2023, after being ranked first for the first time in 2022. The Scandinavian country has been a perennial top 10 performer since 2018 but has really begun its climb to the top in the past four years.
The country excels in the categories of business efficiency, government efficiency, and infrastructure metrics, despite relatively average economic performance next to some of its geographic peers.
|7||🇭🇰 Hong Kong||2||5||7||5|
|9||🇺🇸 United States||3||10||10||10|
|17||🇸🇦 Saudi Arabia||26||24||32||24|
|18||🇨🇿 Czech Republic||33||33||34||26|
|28||🇰🇷 South Korea||28||23||23||27|
|29||🇬🇧 United Kingdom||23||19||18||23|
|31||🇳🇿 New Zealand||21||22||20||31|
|53||🇸🇰 Slovak Republic||53||57||50||49|
|61||🇿🇦 South Africa||56||59||62||60|
Close to second place is Irelandit has jumped five places since 2019. The country’s strong economic performance has helped it break into the top tier after it has bounced around the top 15 rankings in the past few years.
The third rank is Switzerland which has been in the top five since 2018, and reached first place in 2021. While the country scores well in several key indicators, it loses points in sub-factors such as lack of business development and IPO offerings.
Singaporewhich was previously ranked as the most competitive country in 2019 and 2020, secured fourth place in 2023. Unlike Denmark and Switzerland, the heavy Asian financial center scores well in economic performance but loses steam from government efficiency.
at the bottom of the list, Venezuela, Argentina and Mongolia They face significant business competitiveness challenges in 2023. These countries suffer from a trio of poor economic performance, low business and government efficiency, and substandard infrastructure, which hinders business growth and development. Macro developments also play a major role in their fortunes. For example, Mongolia suffered in following the sanctions On Russia, a major trading partner.
Change the rankings to the most competitive countries
Although some countries have consistently placed in the rankings of the most competitive countries, there are also countries that have had more noteworthy ups and downs.
China And Germany Both were in the top 20 consistently through 2022, but both were just below that standard in the 2023 rankings.
and the we It is still in the top ten but has fallen six places compared to other economies in the past five years. The country’s economic strength is indisputable, but the ratings have fallen for the business landscape and measures of government efficiency.
Here are the five-year changes in the ranking for all of the countries recorded in the IMD report, ranked from largest increase to largest decrease:
|nation||Change (2019-2023)||Rank (2023)|
|🇨🇿 Czech Republic||+15||18|
|🇸🇦 Saudi Arabia||+9||17|
|🇰🇷 South Korea||0||28|
|🇸🇰 Slovak Republic||0||53|
|🇭🇰 Hong Kong||-5||7|
|🇿🇦 South Africa||-5||61|
|🇺🇸 United States||-6||9|
|🇬🇧 United Kingdom||-6||29|
|🇳🇿 New Zealand||-10||31|
the Czech Republic And Belgium They’ve made great strides in improving their business environments since 2019, moving up 15 and 14 places in the rankings over the past half-decade, respectively.
Kingdom of Saudi Arabia Also achieved steady gains thanks to a series of Pro-business reforms In the last years. Together with the Czech Republic, 2023 was the first year that the two countries topped the list of the top 20 most competitive countries.
On the other side, Latvia And New Zealand It fell the most competitively, dropping 11 and 10 places, respectively. Latvia and its neighbors in the Baltic region are dealing with a difficult geopolitical environment and the risk of a recession with instability in the region, while New Zealand is noted for dealing with brain drain and inflexibility in the face of climate change.
Examine the competitiveness of the business
Business competitiveness is one of many measures of a country’s performance, including GDP, income, livability, and even happiness ratings.
As with other measurements, it is important to consider the nuances and disparities between countries when applying a one-size-fits-all rating system.
For example, more populous countries are classified as relatively poorer. the we Ranked #2 when considering only countries with populations over 20 million, China is the most competitive country with a per capita GDP of less than $20,000.
And while criticisms about the subjectivity of these classifications may be valid, looking at these types of breakdowns can bring unique insights into broad social questions, and can be used as a tool to aid policymakers.
This article was published as part of the Visual Capitalist Creators Program, which features data-driven visuals from some of our favorite creators around the world.
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