European countries rank highest in the 2021 World Competitiveness Ranking

Switzerland has secured first place

The Institute for Management Development (IMD) has revealed the countries and economies which have fared best with the challenges of the past year. More specifically, the independent academic institution has published its 2021 World Competitiveness Ranking which measures the prosperity and competitiveness of 64 countries by assessing four key factors: economic performance, government efficiency, infrastructure, and business efficiency.

Switzerland ranks first

In a press release, the IMD reported that Switzerland has ranked at the top for the first time in the 33-year history of the annual ranking. Taking this further, the European country rose from 3^rd place in 2020, replacing Singapore as the leader in prosperity and competitiveness.

Singapore’s fall from 1^st place was owed to the pandemic and its restrictions as the country’s economy heavily relies on export, import, and mobility services. Nevertheless, it still managed to rank in the top 5 and maintain its reputation despite a challenging year. 

The top 5 best-performing countries are:

1. Switzerland
2. Sweden
3. Denmark
4. Netherlands
5. Singapore

Europe proves its resilience

As exhibited by the above list, Western Europe dominates this year’s rankings. The IMD commented on the key factors which have resulted in the countries’ impressive performances, noting the importance of investments in innovation, digitalisation, welfare benefits, and social cohesion.

Considering the obstacles presented by the outbreak of COVID, it is not surprising that these are the factors which have had the most impact on the 2021 rankings. Taking a case in point, countries that invest in innovation and digitalisation found it easier to transition to working from home while others faced a decrease in productivity levels and an increase in unemployment.

Competitiveness is about prosperity – not growth

Looking at other nations, the report found economic prowess in the United States and the United Kingdom, which secured 10^th and 18^th place, respectively. Furthermore, it noted that China has also risen in the ranks, securing 16^th place and rising up from 20^th.

However, Director of the IMD World Competitiveness Centre and Professor of Finance Arturo Bris explained that although China has reduced poverty, strengthened education, and boosted infrastructure, it is not seen as one of the most competitive economies. Bris clarified the reason behind this, noting that the World Competitiveness Ranking measures prosperity, not growth.

2021 IMD World Competitiveness Ranking (Youtube: IMD)