The Economy

U.S. Repeats As No. 1

June 27, 2005

China drops under weight of negative opinions.

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

At No. 31, China -- not including Hong Kong -- is in the middle of the competitiveness rankings in 2005, significantly lower than its No. 24 ranking in 2004. IMD attributes the drop to a recent "extremely negative opinion survey" that seems to question the sustainability of China's storied economic expansion.

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."

About the Author

John McClenahen | Former Senior Editor, IndustryWeek

John S. McClenahen, is an occasional essayist on the Web site of IndustryWeek, the executive management publication from which he retired in 2006. He began his journalism career as a broadcast journalist at Westinghouse Broadcasting’s KYW in Cleveland, Ohio. In May 1967, he joined Penton Media Inc. in Cleveland and in September 1967 was transferred to Washington, DC, the base from which for nearly 40 years he wrote primarily about national and international economics and politics, and corporate social responsibility.

      McClenahen, a native of Ohio now residing in Maryland, is an award-winning writer and photographer. He is the author of three books of poetry, most recently An Unexpected Poet (2013), and several books of photographs, including Black, White, and Shades of Grey (2014). He also is the author of a children’s book, Henry at His Beach (2014).

      His photograph “Provincetown: Fog Rising 2004” was selected for the Smithsonian Institution’s 2011 juried exhibition Artists at Work and displayed in the S. Dillon Ripley Center at the Smithsonian Institution in Washington, D.C., from June until October 2011. Five of his photographs are in the collection of St. Lawrence University and displayed on campus in Canton, New York.

      John McClenahen’s essay “Incorporating America: Whitman in Context” was designated one of the five best works published in The Journal of Graduate Liberal Studies during the twelve-year editorship of R. Barry Leavis of Rollins College. John McClenahen’s several journalism prizes include the coveted Jesse H. Neal Award. He also is the author of the commemorative poem “Upon 50 Years,” celebrating the fiftieth anniversary of the founding of Wolfson College Cambridge, and appearing in “The Wolfson Review.”

      John McClenahen received a B.A. (English with a minor in government) from St. Lawrence University, an M.A., (English) from Western Reserve University, and a Master of Arts in Liberal Studies from Georgetown University, where he also pursued doctoral studies. At St. Lawrence University, he was elected to academic honor societies in English and government and to Omicron Delta Kappa, the University’s highest undergraduate honor. John McClenahen was a participant in the 32nd Annual Wharton Seminars for Journalists at the Wharton School at the University of Pennsylvania in Philadelphia. During the Easter Term of the 1986 academic year, John McClenahen was the first American to hold a prestigious Press Fellowship at Wolfson College, Cambridge, in the United Kingdom.

      John McClenahen has served on the Editorial Board of Confluence: The Journal of Graduate Liberal Studies and was co-founder and first editor of Liberal Studies at Georgetown. He has been a volunteer researcher on the William Steinway Diary Project at the Smithsonian Institution, Washington, D.C., and has been an assistant professorial lecturer at The George Washington University in Washington, D.C.