U.S. manufacturers continue to complain about what they perceive to be an uneven international playing field. Yet the U.S. again ranks No. 1 in world competitiveness, according to IMD, a leading business school based in Lausanne, Switzerland. The 2005 edition of IMD's annual World Competitiveness Yearbook, containing data on 60 economies around the globe, was released in mid-May.
The economy of Hong Kong, a special administrative area within China, ranks second on the list, up from sixth place last year. Singapore is third, down from No. 2 in 2004. Rounding out the top five positions are Iceland at No. 4, up from fifth last year, and Canada at No. 5, down from No. 3 in 2004.
The least competitive economies on IMD's list, with the lowest ranking listed first, are Venezuela, Indonesia, Argentina, Poland and Mexico.
| The 10 Most Competitive Economies |
| 1. United States 2. Hong Kong 3. Singapore 4. Iceland 5. Canada 6. Finland 7. Denmark 8. Switzerland 9. Australia 10. Luxembourg Source: IMD 2005 World Competitiveness Yearbook |
The U.S. is top-ranked by IMD on its GDP, investment flows, stock market capitalization, the availability of venture capital, its ability to attract highly skilled foreign workers, business spending on R&D, the numbers of computers in use, its high-tech exports, and the number of foreign patents awarded.
However, the U.S. also comes in for criticism. "The [federal] budget deficit, which runs at 3.4% of GDP, should be a far more serious matter of concern in the U.S.," asserts Stephane Garelli, a professor at IMD and author of the yearbook's executive summary. "Such a persistent deficit, which is unlikely to be reduced in the near future, has a number of enduring effects, the least of which is the explosion of debt. [While] this debt does not constitute, per se, a major problem for the U.S. economy . . . it is far more disquieting for the world economy in general, since it puts considerable strain on the capital market."
