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COMPETITIVENESS

Sweden passes US in competitiveness survey

Sweden has overtaken the United States and Singapore in a new ranking of the world’s most competitive economies published by the World Economic Forum.

Sweden passes US in competitiveness survey

Sweden climbed two spots in the Geneva-based organisation’s annual Global Competitiveness Report, landing in second place behind Switzerland, which topped the rankings for the second year in a row.

The United States, which held the number two spot last year, moved down to the fourth position, while Singapore retained its lock on third place.

Sweden’s Nordic neighbours all placed high in the survey, with Finland (7th) and Denmark (9th) among the top 10, and with Norway at 14th.

According to Stefan Fölster, chief economist at the Confederation of Swedish Enterprise (Svenskt Näringsliv), a strong economy, sound public finances and high growth are all contributing factors to Sweden’s high ranking.

He cautioned, however, that the rankings say little about what lies ahead.

“Unfortunately, there is no connection at all between these rankings and future growth. These lists focus quite a bit on macroeconomic factors, but very little on conditions for small business, for example,” Fölster told the TT news agency.

Sweden was the number one country in a number of the survey’s ranking factors, including intellectual property protection, ethical behaviour of firms, availability of advanced technologies, and private sector R&D spending.

However, the report pointed singled out restrictive labour regulations, high tax rates, and tax regulations as factors which remain problematic for doing business in Sweden.

The Global Competitiveness Report’s competitiveness ranking is based on the Global Competitiveness Index (GCI), which takes into account 12 pillars of competitiveness.

The pillars include institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation.

According to the World Economic Forum, the survey, which is based on responses from 13,500 business leaders in 139 countries, is designed to capture a broad range of factors affecting an economy’s business climate.

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BUSINESS

Sweden drops in leading global business rankings

High taxes and unemployment have pushed Sweden down to ninth place from fifth a year earlier in an annual world competitiveness survey by a leading Swiss business school.

Sweden drops in leading global business rankings
Sweden is still one of the tenth most competitive nations in the world. Photo: Henrik Trygg/imagebank.sweden.se

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The United States remains on top in Lausanne-based IMD's 2015 World Competitiveness Ranking, ahead of Hong Kong and Singapore, which overtook Switzerland.

Canada (fifth), Norway (seventh), Denmark (eighth), Sweden (ninth) and Germany (tenth) remain in the top-10, while Luxembourg moves to sixth from 11th place in 2014.

The rankings of 61 countries are based on statistical indicators, as well as a survey of 6,234 international executives.

One of the crucial factors in the ranking is the “question of business efficiency”, IMD said.

This concerns “the extent to which the national environment encourages enterprises to perform in an innovative, profitable and responsible manner”.

IMD assesses this through indicators related to productivity such as the labour market, finance, management practices and the attitudes and values of the business environment.

“Simply put, business efficiency requires greater productivity and the competitiveness of countries is greatly linked to the ability of enterprises to remain profitable over time,” Professor Arturo Bris, IMD World Competitiveness Centre director, said in a statement.

READ ALSO: Sweden must be able to attract global talent

Tech-savvy Sweden is known for being a booming business country for start-ups and remains within the top-10 in the IMD rankings.

But high costs, taxes and the relatively high unemployment rate of 7.8 percent have pushed it from fifth place in 2014 to ninth in 2015. However, the Nordic country also gets a nod for being efficiently structured and organized, and it is comparatively inexpensive to lay off staff.

“It is a pity that we're dropping, of course. There is no investment, and that depends on political uncertainty concerning energy politics, the debate on profits in welfare services, and taxes on transport, among other things,” Jonas Frycklund, economist at the Confederation of Swedish Enterprise (Svenskt Näringsliv), told the TT news agency.

But economist Torbjörn Hållö of the Swedish Trade Union Confederation (LO) offered a different explanation, saying: “Declining competitiveness is a trend. High unemployment and relatively weak growth are weaknesses. Even the areas of health and environment, where we usually excel, are dropping. We need better ways to combat unemployment and protect what we do best: research, health and environment.”

The IMD 2015 World Competitiveness Rankings

1. USA
2. Hong Kong
3. Singapore
4. Switzerland
5. Canada
6. Luxembourg
7. Norway
8. Denmark
9. Sweden
10. Germany

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