IMD World Competitiveness Booklet 2020

IMD WORLD COMPETITIVENESS BOOKLET

2020

IMD WORLD COMPETITIVENESS BOOKLET 2020

June 2020 IMD WORLD COMPETITIVENESS BOOKLET 2020

ISBN-13 978-2-9701085-8-0 ISSN 1026-2628

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Table of Contents

Preface................................................................................................................ 4 The IMD World Competitiveness Center. ........................................................... 6 Partner Institutes................................................................................................. 8 Trends in World Competitiveness Rankings 2020 ........................................... 18 2020 Criteria Changes...................................................................................... 31 Rankings in a nutshell....................................................................................... 33 The 2020 IMD World Competitiveness Ranking....................................... 34 Methodology in a Nutshell. ....................................................................... 36 What is the IMD World Competitiveness Ranking?.................................. 37 Selected Breakdowns............................................................................... 38 Competitiveness Country Profiles..................................................................... 53 Statistical Tables............................................................................................. 117 Economic Performance. ......................................................................... 118 Government Efficiency............................................................................ 120 Business Efficiency................................................................................. 122 Infrastructure........................................................................................... 124

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IMD WORLD COMPETITIVENESS BOOKLET 2020

Preface

We are particularly pleased and proud to present the IMD World Competitiveness Yearbook 2020 . The 32 nd edition of this publication is launched at a critical moment for the whole world. We heard about COVID-19 in early January and since then it has become a permanent feature of our daily life. What started as a public health issue, became a worldwide health systems crisis, which evolved into an economic and financial crisis as well. Its repercussions affect the lives of people, companies, cities and countries. The predictions for the performance of economies around the world are dire. In addition, concerns about a potential ‘second’ wave of infections further compound the situation. It was within the general lockdown of cities and countries around the world that we worked on this edition of the Yearbook. Working from home, coordinating via the internet, gathering data and insights and validating the accuracy of the information was particularly challenging. At the same time, this novel situation demanded the creation of a new framework to push our work forward. And this is exactly what we did. We continue serving our mission, that is, to understand and analyze the competitiveness of 63 economies. This year, special care must be provided in interpreting the results; the hard data we employ are realizations of 2019 and therefore, pre-COVID-19, while the responses from mid- and upper-level managers to our Executive Opinion Survey were collected between February and April of 2020 and coincide with the outbreak of the pandemic worldwide. An important component of the competitiveness study is to align the criteria we employ with the important challenges and concerns of the world economy. Thus, this year, new criteria were added to reflect the importance of achieving the UN Sustainable Development Goals. The complete list of the criteria can be found on p. 31. They provide a perception of where an economy stands with respect to different sustainable goals that need to be satisfied in ten years such as education and the environment, inclusion and empowerment, ageing and health. The results present a familiar pattern in the factors that have influenced the current performance of highly ranked countries. Such patterns emerge around international trade and investment, employment, the openness of societies,

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IMD WORLD COMPETITIVENESS BOOKLET 2020

measurements related to political stability, and to social and gender equality. Moreover, the effectiveness of the health and education systems, and the protection of the environment, have a crucial role in driving competitiveness trends. We always feel privileged and grateful to enjoy the support of a substantial group of stakeholders. From our Partner Institutes that coordinate part of the demanding task to gather and validate the necessary data employed, to the IMD Alumni community and our Panel of Experts from all the countries who respond to our questionnaire, to the IMD faculty and staff for their support, feedback and involvement. We are fortunate and honored for their continuous collaboration. This year, in particular, they miraculously managed to make us feel that it was business as usual and not a uniquely complicated, difficult and uncertain environment in which to gather, validate, and share the necessary information. The reason you have this publication in your hands now is, for a great part, because of our stakeholders. We are humbled and thankful!

Professor Arturo Bris Director

Dr Christos Cabolis Chief Economist & Head of Operations

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IMD WORLD COMPETITIVENESS BOOKLET 2020

The IMD World Competitiveness Center

For more than thirty years, the IMD World Competitiveness Center has pioneered research on how countries and companies compete to lay the foundations for sustainable value creation. The competitiveness of nations is probably one of the most significant developments in modern management and IMD is committed to leading the field. The World Competitiveness Center conducts its mission in cooperation with a network of 57 Partner Institutes worldwide to provide the government, business and academic communities with the following services:

• Competitiveness Special Reports • Competitiveness Prognostic Reports • Workshops/Mega Dives on competitiveness • IMD World Competitiveness Yearbook • IMD World Digital Competitiveness Ranking

• IMD World Talent Ranking

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IMD WORLD COMPETITIVENESS BOOKLET 2020

The IMD World Competitiveness Center team:

At IMD Professor Arturo Bris Christos Cabolis José Caballero Madeleine Hediger Catherine Jobin

Director

Chief Economist & Head of Operations

Senior Economist

Data Research and Online Services Specialist

Order and Sales Administrator

William Milner Marco Pistis Maryam Zargari

Research Projects Associate Manager

Research Specialist Research Specialist

At KAESCO Jean-François Kaeser Consulting

We also have the privilege of collaborating with a unique network of Partner Institutes, and other organizations, which guarantees the relevance of the data gathered.

Contact: Tel: + 41 21/618 02 51 E-mail : wccinfo@imd.org Internet: www.imd.org/wcc

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IMD WORLD COMPETITIVENESS BOOKLET 2020

Partner Institutes

We would like to express our deep appreciation for the contribution of our Partner Institutes, enabling an extensive coverage of competitiveness in their home countries. The following Institutes and people supplied data from national sources and helped distribute the survey questionnaires:

Argentina Research Program on Economic Development and Institutions Faculty of Economic Sciences Catholic University of Argentina, Buenos Aires http://www.uca.edu.ar

Dr. Alicia Caballero, Dean Dr. Marcelo F. Resico, Senior Economist Mr. Santiago Franco, Research Assistant

Australia CEDA – Committee for Economic Development of Australia www.ceda.com.au

Jarrod Ball, Chief Economist Roxanne Punton, Director, External Affairs

Austria Federation of Austrian Industries, Vienna Austrian Institute of Economic Research, Vienna http://www.iv-net.at Belgium FEB - Federation of Enterprises in Belgium, Brussels www.vbo-feb.be Brazil Fundação Dom Cabral, Innovation and Entrepreneurship Center https://www.fdc.org.br/

Dr. Christian Helmenstein, Chief Economist

Ms. Helena Zwickl Mr. Michael Oliver

Christophe Ernaelsteen, Conseiller Centre de compétence Economie & conjoncture

Carlos Arruda, Professor and Director FDC Innovation and Entrepreneurship Center Ana Burcharth, Professor Naira T. A. C. Gonçalves, Researcher

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Bulgaria Center for the Study of Democracy, Sofia www.csd.bg

Mr. Ruslan Stefanov, Director, Economic Program Ms. Daniela Mineva, Research Fellow, Economic Program Mr. Martin Vladimirov, Analyst, Economic Program Dr. Todor Galev, Senior Analyst, Economic Program

Canada Information and Communications Technology Council (ICTC) www.ictc-ctic.ca

Alexandra Cutean, Director Research & Policy Rosina Hamoni, Research Analyst

Chile Universidad de Chile Facultad de Economía y Negocios (FEN) www.fen.uchile.cl China China Institute for Development Planning, Tsinghua University

Dr. Enrique Manzur, Vice Dean Dr. Sergio Olavarrieta, Ph.D Program Director Dr. Pedro Hidalgo, Department Head

Prof. Yang Yongheng, Associate Dean of School of Public Policy & Management, Executive Associate Director of China Institute for Development Planning Prof. Wang Youqiang, Associate Director of China Institute for Development Planning Dr. Gong Pu, Research Fellow Mr. Wang Hongshuai, PhD Candidate Ms. Song Wenjuan, PhD Candidate Mr. You Shuai, PhD Candidate Ms. Xie Xiaohong, PhD Candidate Mr. Mao Junsong, Graduate Student Ms. Sun Xiao, Graduate Student Luis Alberto Rodríguez, Director, National Department of Planning Juan Sebastián Robledo Botero, Director, Innovation and Private Sector Development

Colombia National Planning Department https://www.dnp.gov.co/DNPN/Paginas/ default.aspx

Croatia National Competitiveness Council http://konkurentnost.hr/en/

Ivica Mudrinic, President Jadranka Gable, Advisor Kresimir Jurlin, PhD, Researcher

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Cyprus Economics Research Centre, University of Cyprus www.oeb.org.cy Cyprus Employers and Industrialists Federation (OEB) Czech Republic Consumer Forum (Spotřebitelské fórum) www.spotrebitelskeforum.cz Denmark Confederation of Danish Industry https://www.danskindustri.dk/english/ Estonia Estonian Institute of Economic Research (EKI) www.ki.ee Enterprise Estonia (EAS)

Sofronis Clerides, Professor of Economics

Nicoletta Pashourtidou, Assistant Director Antonis Frangoudis, Director Business Development and Economic Affairs

Dr. Kryštof Kruliš

Allan Sørensen, Chief analyst

Ms. Marje Josing, Director

Mr. Tanel Rebane, Director of Trade Development Agency

Finland ETLA Economic Research www.etla.fi France Business France, Paris http://en.businessfrance.fr/

Ville Kaitila, Researcher Markku Lehmus, Head of Forecasting Aki Kangasharju, Managing Director

Ms. Sylvie Montout, Chief Economist

Greece Federation of Industries of Greece (SBE), Thessaloniki

Dr. Christos Georgiou, Director, Research and Documentation Department Mr. Constantinos Styliaras, Economist, Research and Documentation Department Aggelos Tsakanikas, Associate Professor National Technical University of Athens - Head of Entepreneurship Observatory Sophia Stavraki, Research Associate

Foundation for Economic and Industrial Research (FEIR/IOBE), Athens

Hong Kong SAR Hong Kong Trade Development Council www.hktdc.com

Ms. Alice Tsang, Assistant Principal Economist Ms. Doris Fung, Economist

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Hungary ICEG European Center, Budapest http://icegec.org

Ms. Renata Anna Jaksa, Director Dr. Oliver Kovacs, Senior Research Fellow Prof. Dr. Magdolna Csath, Research Professor

National University of Public Service, Competitiveness and Fiscal Stability Research Group, Budapest - http://en.uni- nke.hu/ Iceland Icelandic Chamber of Commerce, Reykjavik www.chamber.is India National Productivity Council, New Delhi www.npcindia.gov.in

Mr. Konrad S. Gudjonsson, Chief Economist Mr. Isak Einar Runarsson, Economic Analyst

Dr.K.P.Sunny, Director & Head (Economic Services) Mr. Rajesh Sund, Director (Economic Services) & Head (Productivity Awareness) Dr. Rajat Sharma, Director (Economic Services) Dr. Willem A. Makaliwe, Managing Director Dr. Toto Pranoto, Senior Adviser Bayuadi Wibowo, Group Head of Research Services Arza Faldy Prameswara, Senior Researcher Yendra Emirsyah Kivatra, Research Analyst Ajeng Awliya Puspitasari, Research Analyst Nadia Feby Artharini, Research Analyst Ms. Tini Moeis, Managing Director

Indonesia Lembaga Management, Faculty of Economics and Business, Universitas Indonesia (LM FEB UI), Jakarta http://www.lmfeui.com/index.php

NuPMK Consullting, Jakarta http://nupmk.co.id

Ireland IDA Ireland www.idaireland.com

Karen Law

Israel The Federation of Israeli Chambers of

Israela Many – Deputy Managing Director of Economy and Tax Itay Boyman – Executive Economist

Commerce, Tel-Aviv www.chamber.org.il

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Italy CONFINDUSTRIA, Economic Research

Dr. Alessandro Fontana, Economist Dr. Cristina Pensa, Economist Dr. Lorena Scaperrotta, Economist

Department, Rome www.confindustria.it

Japan Mitsubishi Research Institute, Inc., Tokyo Research Center for Policy and Economy www.mri.co.jp Jordan Ministry of planning and International Cooperation www.mop.gov.jo Kazakhstan Economic Research Institute, JSC of the Ministry of National Economy of the Republic of Kazakhstan, Nur-Sultan www.economy.kz

Dr. Hirotsugu Sakai, Research Director

Zeina Toukan, Secretary General Ghada Issa, Head of Competitiveness Division

Ruslan Sultanov, Chairman of the Board Shakharbanu Zhakupova, Deputy Chairman of the Board Bakytgul Khambar, Director, Center for Strategic Research and Sustainable Development Assem Mukazhanova, Deputy Director, Center for Strategic Research and Sustainable Development Madina Nurzhanova, Senior Expert, Center for Strategic Research and Sustainable Development Nauryz Baizakov, Senior Expert, Center for Strategic Research and Sustainable Development Temirlan Otepov, Expert, Center for Strategic Research and Sustainable Development Dr. Young gui Kim, Senior Research Fellow Ms. Nayoun Park, Researcher Ethan Cho, Manager

Korea Rep. Korea Institute for International Economic Policy (KIEP) http://www.kiep.go.kr/eng/ The Korea Chamber of Commerce and Industry http://english.korcham.net/ Latvia University of Latvia Centre for European and Transition Studies, LU CETS http://www.lu.lv/cets

Mrs. Zane Zeibote

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IMD WORLD COMPETITIVENESS BOOKLET 2020

Lithuania Enterprise Lithuania www.enterpriselithuania.com

Vytautas Adomaitis, Regulatory affairs

Luxembourg Chamber of Commerce of the Grand Duchy of Luxembourg www.cc.lu

Ms. Christel Chatelain, Head of Economic Affairs Mr. Jean-Baptiste Nivet, Senior Economist Ms. Sidonie Paris, Economist Dato’ Abdul Latif Hj. Abu Seman, Director General MPC En. Ab Rahim Yusoff, Deputy Director General MPC En. Zahid Ismail, Deputy Director General MPC Pn. Wan Fazlin Nadia Wan Osman, Director Productivity & Competitiveness Development Division En. Mohamad Muzaffar Abdul Hamid, Deputy Director Productivity & Competitiveness Development Division Pn. Haslizayanti Othman, Assistant Manager Productivity & Competitiveness Development Division

Malaysia Malaysia Productivity Corporation (MPC), Petaling Jaya, Selangor www.mpc.gov.my

Mexico Center for Strategic Studies for

M.C. Carlos Maroto Cabrera M.S. Carlos Maroto Espinosa

Competitiveness www.ceec.edu.mx

Mongolia Economic Policy and Competitiveness Research Center www.ecrc.mn

Mr. Tsagaan Puntsag, Founder and Chairman of Board Ms. Lakshmi Boojoo, Director General Ms. Odonchimeg Ikhbayar, Deputy Director and Head of Research Ms. Tungalag Erdenebat, Research Economist Mr. Mungunjiguur Battsolmon, Research Economist Ms. Munkhshur Purevsuren, Researcher and Administrative Officer Mr. Iderkhangai Khenmedekh, Research Economist Ms. Yesunchuluu Khuderchuluu, Research Economist

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Netherlands Confederation of Netherlands Industry and Employers (VNO-NCW), The Hague www.vno-ncw.nl

Mr. Thomas Grosfeld Mr. Tim Zandbergen

New Zealand Kerridge & Partners, Auckland https://kerridgepartners.com/ Peru CENTRUM PUCP http://centrum.pucp.edu.pe

Mr Peter Kerridge, Partner

Mrs. Beatrice Avolio, Head of the Graduate Business Department Mr. Percy Marquina, General Director Mr. Luis Del Carpio, Center of Competitiveness Director Mr. Victor Fajardo, Research Analyst Jamil Paolo Francisco, Ph.D. – Executive Director, AIM RSN PCC & Associate Dean, Asian Institute of Management John Paul Flaminiano – Associate Director and Senior Economist, AIM RSN PCC Christopher Ed Caboverde – Research Associate, AIM RSN PCC

Philippines Asian Institute of Management Rizalino S. Navarro Policy Center for Competitiveness (AIM RSN PCC) policy.aim.edu

Poland SGH Warsaw School of Economics World Economy Research Institute Collegium of World Economy https://ssl-www.sgh.waw.pl/pl/Strony/ default.aspx Portugal Porto Business School, University of Porto, Porto https://www.pbs.up.pt/

Prof. Marzenna Weresa Dr. Anna Dzienis

Prof. Daniel Bessa Prof. Álvaro Almeida Prof. José Luís Alvim Prof. João Loureiro Prof. Filipe Grilo Prof. Ramon O’Callaghan Dr. Rui Coutinho

Qatar Planning and Statistics Authority Department of Strategic Planning www.psa.gov.qa

Dr. Issa Ju’ma Ibrahim, Economic Expert Hissa Alassiry, Project Manager

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Romania CIT-IRECSON Center of Technological Information, Bucharest www.cit-irecson.ro

Mr. Bogdan Ciocanel, PhD, Director Mr. Dan Grigore, Economist

Russia Moscow School of Management SKOLKOVO https://school.skolkovo.ru/en/

Dr. Andrey Shapenko, Associate Professor, Academic Director, MBA Programme Mr. Vladimir Korovkin, Head of Digital and Innovations Research H.E. Dr. Eiman AlMutairi, CEO of National Competitiveness Center Waleed AlRudaian, Vice President Salman M. AlTukhaifi, Director of Analytical Department Deema Almudaheem, Project Manager Abdulrahman AlGhamdi, Senior Analyst

Saudi Arabia NCC, National Competitiveness Center https://www.ncc.gov.sa/en/Pages/default. aspx

Singapore Singapore Business Federation www.sbf.org.sg/ Economics Division, Ministry of Trade and Industry, Singapore www.mti.gov.

Ms. Cheryl Kong, Assistant Executive Director

Slovak Republic F.A.Hayek foundation, Bratislava http://www.hayek.sk/ Slovenia Institute for Economic Research, Ljubljana http://www.ier.si/ University of Ljubljana, Faculty of Economics http://www.ef.uni-lj.si/en

Martin Reguli, Project Manager Matúš Pošvanc, Director

Mr. Peter Stanovnik, PhD, Associate Professor Ms. Sonja Ursic, M.A. Ms. Mateja Drnovsek, PhD, Full Professor Mr. Ales Vahcic, PhD, Full Professor

South Africa Productivity SA https://productivitysa.co.za/

Mr Mothunye Mothiba, CEO Dr Leroi Raputsoane, Chief Economist Ms Juliet Sebolelo Mashabela, Economist

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Spain Spanish Confederation of Employers, Madrid www.ceoe.es

Ms. Edita Pereira, Head of Economic Research Unit Ms. Paloma Blanco, Economic Research Unit

Taiwan, China National Development Council, Taipei http://www.ndc.gov.tw

Mr. Cheng, Cheng-Mount, Deputy Minister Ms. Wu, Ming Huei, Director of Economic Development Department Mr. Wang, Chen-Ya, Specialist Ms. Wanweera Rachdawong, Chief Executive Officer, TMA Ms. Pornkanok Wipusanawan, Director, TMA Center for Competitiveness Mr. Nussati Khaneekul, Senior Manager, TMA Center for Competitiveness

Thailand Thailand Management Association (TMA), Bangkok www.tma.or.th

Turkey TUSIAD, Turkish Industry and Business Association Economic Research Department www.tusiad.org United Arab Emirates (UAE) Federal Competitiveness & Statistics Authority (FCSA), Dubai http://fcsa.gov.ae/en-us Ukraine International Management Institute (MIM- Kyiv) https://mim.kiev.ua/en Venezuela National Council to Investment Promotion (CONAPRI) www.conapri.org

Zümrüt İmamoğlu, Chief Economist İsmet Tosunoğlu, Expert

Dr. Iryna Tykhomyrova, President Dr. Volodymyr Danko, Professor Ms. Oksana Kukuruza, External Relations Director

Mr. Juan Cabral, Executive Director Ms. Jennyn Osorio, Manager of Economic Affairs Ms. Lilian Zambrano, Manager of Legal Affairs

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Trends in World Competitiveness Rankings 2020

Arturo Bris Director

Christos Cabolis Chief Economist

José Caballero Senior Economist

Marco Pistis Research Specialist

Introduction

In recent months, the world has experienced an unprecedented crisis.

of the health system may reflect the current crisis.

The COVID-19 pandemic has had an impact on all aspects of life. However, the data employed in the construction of the 2020 World Competitiveness Ranking does not fully capture that impact. The hard data predates the release of the Index by at least a year; that is, statistics presented in the yearbook are from 2019 and in some cases, due to availability, slightly older. Nevertheless, the executive survey employed in the ranking ran from February to April 2020, and thus somewhat captures the COVID-19 impact. For example, survey indicators assessing the adaptability of government policy and the quality

The ranking, however, captures the issues that the global economy experienced in 2019 as a result of the trade frictions between the USA and China. These issues include a somewhat sluggish GDP growth and slight declines in exports and international investment for several countries. This year’s results show a common pattern in the factors that have influenced the current performance of highly ranked countries. Such a pattern emerges around international trade and investment, employment, the openness of societies, measures related to political stability, and to

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social and gender equality. Moreover, the effectiveness of the health and education systems, together with the protection of the environment, have a crucial role in driving competitiveness trends.

In the following section, we review the 2020 competitiveness trends, first with our spotlight on the top 10 countries. We go on to assess the sub-regional trends at the overall and sub-factor levels. We then discuss country-level trends organized by sub-regions.

Top 10 performers

Singapore the leading position in the 2020 world competitiveness rankings. While Denmark 2 nd , Switzerland 3 rd and the Netherlands 4 th move up in the rankings (from 8 th , 4 th and 6 th , respectively), Hong Kong SAR drops to 5 th (from 2 nd ). Sweden improves from 9 th to 6 th . Similarly, Norway 7 th and Canada 8 th boost their position this year joining the top 10 from 11 th and 13 th , respectively. The UAE and the USA round up the top of the ranking, both experiencing a decline from 5 th to 9 th , and 3 rd to 10 th , respectively. is sustained by a strong economic performance centered around a robust display in international trade and investment, employment and labor market measures (e.g., compensation levels, employee training and talent attraction), public finance and business legislation. Furthermore, Singapore shows a stable performance in productivity, remains in Singapore’s position

its technological infrastructure (e.g., investment in telecommunications, internet bandwidth speed and high- tech exports) and education system. Denmark’s improvement originates in the strong performance of its economy and labor market, and its health and education systems. In addition, the country performs strongly in international investment and productivity. Similarly, Switzerland’s increase comes from the substantial performance of its economy with a robust showing in international trade. This is coupled with a steadfast display in different competitiveness aspects including its scientific infrastructure (e.g., expenditure on R&D, scientific articles published, and patents grants and applications), and its health and education systems. Likewise, the Netherlands displays a strong performance in international trade and investment. It also achieves improvements in employment with a

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robust labor market and technological infrastructure.

Likewise, Canada’s rise is centered around improvements in measures related to its labor market and in the openness of its society. In addition, Canada shows a sharp increase in the effectiveness of its education system combined with a steady functioning of its health system, environmental protection and basic infrastructure. The UAE’s decline can be attributed to its display in measures related to productivity, management practices (e.g., corporate governance, board composition and the agility of the private sector), and in the effectiveness of its basic and technological infrastructure. In addition, the country has felt the impact of the worldwide slowdown in international trade. The USA experiences one of the largest declines in this year’s ranking, due mainly to the deterioration of the country’s international trade and public finances and declines in employment and labor market measures. Moreover, the USA’s performance in the societal framework remains low, and it experiences a decline in the effectiveness of its health system and in the protection of the environment.

Conversely, Hong Kong SAR’s drop to 5 th position comes on the back of a relatively deficient performance of its economy, employment and societal framework (e.g., indicators related to justice, political stability, and social and gender equality). The underlying strengths of the economy, however, remain in place. Sweden’s increase in the ranking is due to a robust display in international trade and productivity. It also shows a strong performance in business legislation, societal framework, attitudes and values (e.g., openness of society), the effectiveness of its health and education systems, and measures of environmental protection. Similarly, Norway’s improvement stems from its performance in productivity, its societal framework, the effectiveness of its basic infrastructure (e.g., management of cities and quality of air transportation), its health and education systems, and its protection of the environment.

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Sub-regional competitiveness trends: Overall ranking

Figure 1 presents the sub-regional overall competitiveness ranking trend for the years 2016 to 2020. Only Western Europe and South America achieved an increase in their competitiveness rankings; the other sub-regions experience a decline in their overall average positions. Eastern Asia remains at the top of the sub-regional rankings even though the average competitiveness

position decreased from about 17 th to 18 th , reversing a trend that had been present since 2016. Western Europe achieved the exact opposite. It had steadily decreased from 20 th position to 23 rd in 2019, only to return to somewhere like 20 th place this year. North America was in 19 th place in 2016, then sat at 21 st position for the next three years only to drop to 24 th place in 2020.

Figure 1. Sub-regional overall competitiveness ranking trends, 2016-2020

2016

2017

2018

2019

2020

15

20

25

Eastern Asia Western Europe North America Southern Asia &thePacific Western Asia & Africa Eastern Europe Ex-CIS and Central Asia South America

30

35

40

45

50

Average Competitiveness ranking 1-63

55

60

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Southern Asia and the Pacific experienced a decline from 26 th to 28 th position, approximately, while Western Asia and Africa remain about the same at 34 th place, much lower than the highest place or 32 nd as was the case in 2016. improving competitiveness trend that it had been enjoying since 2017 was reversed when it dropped from 44 th to 42 nd place last year, only to return to 44 th position in 2020. Eastern Europe’s

A similar pattern can be observed in the Ex-CIS and Central Asia sub- region. In 2016 it occupied the 50 th position, improving to 46 th in 2017 but then declining to 48 th spot last year. In 2020, it slipped further down to 51 st place. Finally, South America is the second sub-region to have achieved an increase in the average ranking this year. In 2016, it was in 52 nd position but it dropped to about 56 th last year, only to improve and shuffle back up to a 54 th average ranking this year.

Sub-regional competitiveness trends: Sub factor level

Table 1 provides the average ranking positions at the sub-factor level for each sub-region. It also presents a graphical depiction of the strengths and weaknesses of each sub-region, organized by competitiveness factors by denoting the highest positions in darker green and, conversely, the lowest positions in lighter green. The highest rank in the economic performance factor is attained by North America, followed by Eastern Asia and Western Europe. The lowest ranks are captured by Ex-CIS and Central Asia and South America.

Within economic performance, North America and Eastern Asia dominate in the areas of international investment and employment while the latter also performs well in domestic economy. International trade is the sub-factor that North America can improve upon while the same is true for the high level of prices for Eastern Asia. Eastern Europe holds high average rankings in both international trade as well as prices while the same is true for Western Asia and Africa. While the general cost of living is low in Ex-CIS and Central Asia, the countries of the region can improve their rankings in all other sub-factors.

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Table 1. Sub-regional competitiveness average ranking positions, sub-factor level

EconomicPerformance

Government Efficiency

Tax

International Trade

Prices

Public

Policy

Finance

Societal

Business

Economy

Domestic

Legislation

Framework

Framework

Investment

Institutional

Employment

International

30.0 18.9 31.0 32.3 31.0 42.8 46.0 47.7

Eastern Asia

16.2 24.6 23.7 37.7 39.3 45.3 52.5

26.4 27.4 40.7 25.8 30.7 38.2 33.0 43.8

22.6 44.7 19.3 15.5 14.9 41.9 22.3 33.0

21.8 19.4 29.3 30.5 34.4 41.2 55.7 50.7

26.4 14.6 31.3 33.6 42.9 39.2 45.3 56.2

29.6 24.3 46.3 29.5 34.6 23.4 56.0 56.8

15.0 22.7 13.7 29.9 35.1 51.1 43.0 40.2

16.6 32.1 16.7 20.6 35.0 37.0 46.7 46.5

47.8 39.8 25.3 31.9 21.0 21.7 25.0 34.5

Western Europe North America

Southern Asia& the Pacific 26.3

Western Asia&Africa

Eastern Europe

Ex-CIS and Central Asia

South America

Business Efficiency

Infrastructure

Basic

Labour

Market

Finance

Management Practices

Scientific

Attitudes

Education

Health and

and Values

&Efficiency

Productivity

Environment

Infrastructure

Technological

Infrastructure

Infrastructure

10.2 20.0 22.0 33.9 37.4 42.8 48.7 54.3

23.6 14.1 25.7 39.3 44.9 38.9 58.7 47.2

23.8 16.4 27.0 37.4 42.1 36.9 45.7 55.0

25.4 25.2 24.7 27.1 31.4 42.5 46.0 42.0

19.4 27.4 30.0 22.9 22.6 45.4 43.7 48.7

24.0 21.5 25.7 31.3 33.1 42.0 40.7 50.3

13.8 20.8 25.7 30.1 38.3 39.4 50.7 56.7

27.0 18.2 24.0 31.4 37.3 53.3 57.7

22.2 28.2 19.3 15.5 29.1 49.7 44.3 42.5

19.6 19.7 20.3 25.6 33.6 49.5 51.0 49.3

Eastern Asia

Western Europe North America

Southern Asia& the Pacific 36.1

Western Asia&Africa

Eastern Europe

Ex-CIS and Central Asia

South America

Note: the darkest green – highest ranking average position, lightest green – lowest position

In the government efficiency factor, Eastern Asia, Western Europe and Southern Asia and the Pacific dominate the rankings. Western Europe takes centerstage in the international framework, business legislation and societal framework sub-factors where tax policy is the area where improvement can make a difference. All these are sub-factors in which Eastern Asia performs excellently as well.

In the area of tax policy, Western Asia and Africa as a region leads the rankings followed by Southern Asia and the Pacific, and North America. Public finance, an important sub-factor of the post-COVID-19 era is led by Southern Asia and the Pacific, followed by Eastern Asia then Northern Europe The business efficiency factor is led by Western Europe, followed by Eastern Asia, North America

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IMD WORLD COMPETITIVENESS BOOKLET 2020

and Southern Asia and the Pacific. Western Europe tops the rankings in productivity and efficiency while performing very strongly in all other sub-factors. Eastern Asia has the strongest position in finance while Southern Asia and the Pacific as well as North American fair very strongly in the labor market sub-factor. Each of these regions shows strengths in all the sub-factors of business efficiency. Finally, in the infrastructure factor, Western Europe, Eastern Asia and North America dominate the regional rankings. While Western Europe tops the regional rankings in the health and environment and education sub-factors, Eastern Asia leads in technological and scientific infrastructures. North America performs well in all the sub-factors Despite its decline in the rankings (as discussed previously), Hong Kong SAR leads the Eastern Asian sub-region. Taiwan, China, rises to the 11 th spot (from 16 th ). Similarly, Korea Republic moves up to 23 rd (from 28 th ) and the Philippines to 45 th (from 46 th ). Other countries in the region experience a deterioration in their competitiveness rankings. China declines from 14 th position to 20 th . Similarly, Japan moves down from 30 th to 34 th . Eastern Asia

with their greatest strength being scientific infrastructure. Ex-CIS and Central Asia, together with South America, has room for improvement in all the sub-factors. For Ex-CIS and Central Asia, the highest ranking came in the tax policy and prices sub factors while the lowest was in institutional framework, and health and environment. Similarly, for South America the highest ranking was captured in tax policy and prices and the lowest in productivity and efficiency, technological infrastructure, international trade and societal framework.

Competitiveness trends at the country level

Taiwan, China, rises as a result of the strong performance of its economy, and slight improvements in international trade and investment, as well as business legislation. In addition, it experiences improvements in productivity in its labor market and technological infrastructure in combination with a strong display in management practices and scientific infrastructure. Despite improvements in its health and education systems, China experiences a downturn in competitiveness which is mainly the

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IMD WORLD COMPETITIVENESS BOOKLET 2020

result of a decreasing performance in international trade, employment and measures within the labor market. Furthermore, China shows declines in management practices, and in its technological and scientific infrastructures. As indicated previously, Singapore heads the overall ranking and thus the Southern Asia and the Pacific sub-region. The Philippines displays the only improvement elsewhere in this sub-region, increasing slightly from 46 th to 45 th mainly due to an increase in international trade and a steady performance of its labor market. Australia remains in 18 th position, and India does not budge from its 43 rd spot. Other countries in the sub-region decline. New Zealand drops from 21 st to 22 nd . Similarly, Thailand declines from 25 th to 29 th , largely because of a below-par economic performance particularly in international investment, employment and its labor market. Likewise, Malaysia moves down from 22 nd to 27 th and Indonesia from 32 nd to 40 th . Southern Asia and the Pacific

improvements in international trade, employment, labor market, efficient public finance and productivity. Greece also performs strongly this year increasing to 49 th place from the 58 th . However, despite such a display, Greece remains the lowest-ranked country in the sub-region. Austria increases to 16 th from 19 th place and the United Kingdom improves – from 23 rd to 19 th . Finland (13 th ), Belgium (25 th ) and Portugal (37 th ) all improve by two positions. By contrast, Germany (17 th ), Spain (36 th ) and Italy (44 th ) all remain in the same position. Meanwhile, Ireland drops out of the top 10, moving down from 7 th position to 12 th . This is as a result mainly of declines in international trade and investment, and in its economic performance in general. Similarly, Luxembourg sees a decline by falling to 15 th place (from 12 th ). Iceland experiences a slight drop from 20 th to 21 st , and France from 31 st to 32 nd position. Eastern European sub-region, experiencing an advancement from 35 th place to 28 th mainly due to improvements in its economic performance particularly in terms of international investments, employment and institutional framework (e.g., rule of law). Slovenia also increases in the ranking to 35 th position (from 37 th ). Eastern Europe Estonia leads the

Western Europe

Cyprus experiences the largest improvement in the ranking, rising to 30 th position from 41 st . This performance is partly due to a strong economic performance based on

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IMD WORLD COMPETITIVENESS BOOKLET 2020

Conversely, Lithuania drops from 29 th to the 31 st spot. In fact, several countries experience a minimal decline in this region. Poland moves down one place from 38 th to the 39 th , Latvia from 40 th to 41 st and Ukraine from 54 th position to 55 th . Furthermore, Romania moves down from 49 th place to 51 st and the Slovak Republic declines from 53 rd place to 57 th . European countries experience no movement in their rankings. The Czech Republic remains in 33 rd position, Hungary in 47 th , Bulgaria in 48 th and Croatia, ranking the lowest in the region, holds the 60 th spot. Several Eastern Kazakhstan shows the largest drop in the overall ranking declining from 34 th place to 42 nd . This is partly because of the country’s deficient performance in international trade and investment, employment, labor market and in the institutional and societal frameworks. Russia also declines from 45 th spot to 50 th . Conversely, Mongolia slightly improves, taking the 61 st spot (compared to its previous 62 nd ). Ex-CIS and Central Asia

South America

Chile remains the highest-ranked country in the South American sub- region at 38 th position (improving from its former 42 nd spot). The country displays improvements in its public finance, business legislation, labor market and management practices. Likewise, Peru and Brazil experience an increase from 55 th position to 52 nd and from 59 th to 56 th , respectively. Conversely, Colombia declines from 52 nd to 54 th and Argentina from 61 st place to 62 nd . Venezuela remains at the bottom of the overall ranking. The UAE leads this sub-region despite the competitiveness decline it experienced this year (as discussed previously). Saudi Arabia improves, reaching 24 th position, up from the 26 th , mainly because of a strong performance in employment, public finance, business legislation and its technological and scientific infrastructures. Turkey also increases in the rankings to 46 th place (from 51 st ). Conversely, Qatar declines to 14 th place from 10 th and Israel drops to 26 th (from 24 th ). Likewise, Jordan moves down from 57 th to 58 th and South Africa from 56 th to 59 th position. Western Asia and Africa

North America

Canada leads this sub-region, ranking 8 th . The USA follows in 10 th spot. Mexico experiences a decline moving down from 50 th to 53 rd .

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IMD WORLD COMPETITIVENESS BOOKLET 2020

Concluding Remarks

This year’s results offer insights into the impact of the current anti- international trade trends, the effects of which have been greater in larger economies such as the USA and China. At the same time, however, the trends have somewhat benefited smaller economies, for example, the Netherlands and Denmark, which perform well in the competitiveness rankings. Highly ranked countries, moreover, have been able to temper the impact of international trade frictions with a resilient employment and labor

market, relying on robust health and education systems within a highly stable political environment. The latter is characterized by high levels of socio-economic equality and the openness of society. In addition, these countries perform well in measures of public finances, business legislation and environmental protection. Such characteristics of highly competitive countries can play a crucial role in steering their economies away from the socio- economic crisis produced by the COVID-19 impact.

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IMD WORLD COMPETITIVENESS BOOKLET 2020

Appendices

Composition of sub-regions and regions.

 Austria  Belgium  Cyprus  Denmark  Finland  Germany  Greece  Iceland  Ireland  Bulgaria  Estonia  Croatia  Hungary  Lithuania  France

 Italy

 Luxembourg  Netherlands

 Norway  Portugal

Western Europe

 Spain

 Sweden

 Switzerland

 United Kingdom

Europe, Middle East & Africa

 Latvia  Poland

 Czech Republic

 Romania  Slovenia

Eastern Europe

 Slovak Republic

 Ukraine

 Israel  Jordan  Qatar

 South Africa

Western Asia & Africa

 Turkey

 UAE

 Saudi Arabia  Kazakhstan  Mongolia  China Mainland  Hong Kong SAR

 Russia

Ex-CIS & Central Asia

 Korea Rep.

Eastern Asia

 Taiwan

 Japan  Australia

Asia & Pacific

 New Zealand  Philippines

Southern Asia & The Pacific

 India

 Indonesia  Malaysia  Canada  Mexico  Argentina

 Singapore  Thailand

 USA

North America

The Americas

 Colombia

South America

 Brazil  Chile

 Peru

 Venezuela

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IMD WORLD COMPETITIVENESS BOOKLET 2020

Average factor ranking by sub-regions

40

35

30

25

20

15

Average ranking 1-63

10

5

0

Eastern Asia

Western Europe

North America

Southern Asia &thePacific

Economic Performance

GovernmentEfficiency

Business Efficiency

Infrastructure

60

50

40

30

20

Average ranking 1-63

10

0

Western Asia & Africa

Eastern Europe

Ex-CIS and Central Asia

South America

Economic Performance

GovernmentEfficiency

Business Efficiency

Infrastructure

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IMD WORLD COMPETITIVENESS BOOKLET 2020

Overall competitiveness ranking results 2020

Powered by Bing (C) Geonames, HERE, MSFT, Microsoft, Navinfo, Thinkware Extract, Wikipedia

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IMD WORLD COMPETITIVENESS BOOKLET 2020

An important component of the competitiveness study is to align the criteria we employ with the important challenges and concerns of the world economy. Thus, every year we make small adjustments in our measurements to match these current circumstances. This year, new criteria were added to reflect the importance of achieving the UN Sustainable Development Goals. 2020 Criteria Changes

New ranked criteria

2.3.15. Sustainable Development Goals 2.3.16. Democracy Index 2.5.15. Freedom of the press 3.4.13. Fear of failure rate

3.4.14. Total early-stage Entrepreneurial Activity 4.5.13. Students who are not low achievers - PISA

From background to ranked

1.1.13. Economic complexity index 1.4.04. Employment - long-term growth 1.4.10. Youth exclusion 2.4.12. New business density 2.5.09. Income share held by lowest 60% - growth 2.5.12. Unemployment rate - gender ratio 3.2.14. Labor force long-term growth 3.3.04. Access to financial services 3.3.05. Access to financial services - gender ratio 3.4.11. Women in management 4.4.05. Universal health care coverage index 4.4.19. Forest area growth 4.4.24. Environmental agreements 4.5.04. Total public exp. on education per student 4.5.18. University education index

From ranked to background

2.1.05. Total general government debt-real growth

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IMD WORLD COMPETITIVENESS BOOKLET 2020

RANKINGS IN A NUTSHELL

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IMD WORLD COMPETITIVENESS BOOKLET 2020

The 2020 IMD World

COMPETITIVENESS RANKING (Ranks 1 - 30)

0

10

20

30

40

50

60

70

80

90

100

(1) Singapore 1

100.000

(8) Denmark 2

99.496

98.373

(4) Switzerland 3

98.352

(6) Netherlands 4

(2) Hong Kong SAR 5

97.061

95.866

(9) Sweden 6

94.602

(11) Norway 7

(13) Canada 8

93.506

(5) UAE 9

93.505

(3) USA 10

92.358

(16) Taiwan, China 11

91.267

(7) Ireland 12

90.732

88.630

(15) Finland 13

87.864

(10) Qatar 14

(12) Luxembourg 15

87.702

86.269

(19) Austria 16

85.881

(17) Germany 17

(18) Australia 18

85.031

84.355

(23) United Kingdom 19

82.038

(14) China 20

(20) Iceland 21

81.462

80.266

(21) New Zealand 22

79.221

(28) Korea Rep. 23

(26) Saudi Arabia 24

78.190

77.783

(27) Belgium 25

77.708

(24) Israel 26

(22) Malaysia 27

76.395

76.230

(35) Estonia 28

75.387

(25) Thailand 29

(41) Cyprus 30

75.352

(2019 rankings are in parentheses) (2019 rankings are in parenthesis)

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IMD WORLD COMPETITIVENESS BOOKLET 2020

Competitiveness Ranking

COMPETITIVENESS RANKING (Ranks 31 - 63)

0

10

20

30

40

50

60

70

80

90

100

(29) Lithuania 31

73.595

71.688

(31) France 32

71.245

(33) Czech Republic 33

69.854

(30) Japan 34

68.623

(37) Slovenia 35

68.232

(36) Spain 36

68.217

(39) Portugal 37

67.084

(42) Chile 38

66.967

(38) Poland 39

66.751

(32) Indonesia 40

65.356

(40) Latvia 41

64.660

(34) Kazakhstan 42

62.095

(43) India 43

61.971

(44) Italy 44

60.424

(46) Philippines 45

59.997

(51) Turkey 46

59.952

(47) Hungary 47

59.426

(48) Bulgaria 48

57.872

(58) Greece 49

56.465

(45) Russia 50

55.559

(49) Romania 51

54.874

(55) Peru 52

54.797

(50) Mexico 53

The IMD World Competitiveness Ranking presents the 2020 overall ranking for the 63 economies covered by the WCY. The economies are ranked from the most to the least competitive and the results from the previous year’s ranking (2019) are shown in brackets. The Scores shown to the left are actually indices (0 to 100) generated for the unique purpose of constructing charts and graphics.

52.152

(52) Colombia 54

51.867

(54) Ukraine 55

49.631

(59) Brazil 56

49.541

(53) Slovak Republic 57

48.815

(57) Jordan 58

45.163

(56) South Africa 59

43.896

(60) Croatia 60

43.409

(62) Mongolia 61

38.063

(61) Argentina 62

25.373

(63) Venezuela 63

(2019 rankings are in parentheses) (2019 rankings are in parenthesis)

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IMD WORLD COMPETITIVENESS BOOKLET 2020