The fall to sixth place marks the second year in a row Sweden has seen its global ranking drop. After snagging the third spot in the annual Global Competitiveness Report two years ago, Sweden dropped to fourth place in last year’s ranking.
In the 2013-2014 report, Switzerland was once again found to be the most competitive country, followed by Singapore and Finland, the same three countries that topped last year’s competitiveness index.
But advances by Germany, which moved from sixth to fourth place, and the United States, which moved from seventh to fifth place, left Sweden further down the table than it has been in recent years.
“I wouldn’t say that this is a clear deterioration for Sweden. We’ve managed better than many countries in Europe,” Andreas Johnson, an economist with the SEB bank, told Sveriges Television (SVT).
He pointed to an increasingly robust economic recovery in the United States as one of the reasons why the US pulled ahead of Sweden in the ranking.
The WEF noted that Sweden had placed “significant emphasis on creating the conditions for innovation led growth”, going on to praise the country’s “first-rate” public institutions as having “a very high degree of efficiency, trust, and transparency”.
A weaker macroeconomic environment was cited as one of the main reasons for Sweden’s fall in the rankings. The country could also do better in terms of labour market flexibility, an area where Sweden placed 57th out of 148 countries included in the WEF ranking.
Sweden was ranked number one for its level of technological readiness, also ranking high in business culture sophistication (7th) and innovation (6th).
“These characteristics come together to make Sweden one of the most productive and competitive economies in the world,” the report said.
Sweden also “performs well” in terms of social and environmental sustainability, but lags behind other Nordic countries when looking at social factors.
Specifically, the report referred to Sweden’s “persistently high” youth unemployment rate.