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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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ABB

Swedish engineering giant ABB to quit Russia over Ukraine

Swedish-Swiss engineering giant ABB said on Thursday it will quit Russia as a result of the war in Ukraine and the related international sanctions against Moscow.

Swedish engineering giant ABB to quit Russia over Ukraine

Russia accounts for only one or two percent of ABB’s overall annual turnover and the decision to pull out will have an estimated financial impact in the second quarter of around $57 million, the group calculated.

“ABB has decided to exit the Russian market due to the ongoing war in Ukraine and impact of related international sanctions,” the group said in a statement.

Russia accounts for only one or two percent of ABB’s overall annual sales and the decision to pull out will have an estimated financial impact in the second quarter of around $57 million, the group calculated.

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A large number of major western companies have pulled out of Russia since Moscow invaded its pro-Western neighbour on February 24.

“When the war broke out, ABB stopped taking new orders in Russia,” the group said.

At the same time, it said it continued to fulfill “a small number of existing contractual obligations with local customers, in compliance with applicable sanctions.”

Most of ABB’s dedicated Russian workforce has been on leave since March “and the company will do its best to support them as it realigns its operations in a controlled manner,” it said.

ABB has about 750 people in Russia and two production sites in the country located in the Moscow region and Lipetsk, as well as several service centres.

Separately, the group said that its net profit fell by 50 percent to $379 million in the second quarter, largely as a result of one-off charges, but also the cost of withdrawing from Russia.

Sales, on the other hand, grew by six percent to $7.2 billion in the period from April to June, ABB said.

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