With Switzerland regaining their second place on the global competitive economic scale, Hong Kong continues to be the only country more competitive than this EU country.
The rankings, that were first conducted in 1989, is a comprehensive report that evaluates countries across all over the world on a wide range of criteria. This report assesses 61 countries, according to criteria covering areas such as economic performance, government & business efficiency, and infrastructure.
The US in third place, Sweden took fifth place, which made this EU country the second most economically competitive European country after Switzerland.
Other countries that are included on this list are Denmark, Ireland, the Netherlands, Norway and Canada.
Last year Switzerland’s economy suffered due to the strength of the franc, which was unpegged from the euro in January 2015. Recently, IMD director, Arturo Bris said the country’s efficiency and small size have allowed it to recover quickly from the short-lived economic stagnation.
Among all the areas the report evaluated, Switzerland ranked the highest in government efficiency.
“The common pattern among all of the countries in the top 20 is their focus on business-friendly regulation, physical and intangible infrastructure and inclusive institutions,” added Bris.
This same comprehensive report also shed light on a few challenges that the country needs to improve on to maintain economic strength moving forward.
Within the past year, the country’s attempt to preserve bilateral relations with the EU, along with focusing on immigration reform has proved to be tough for the nation.
The country must also adjust to changes brought about by the strong franc, strength competition domestically and reconcile its energy and environmental policies with economic objectives, said the report.
In September, a recent report had praised Switzerland’s innovation, efficient market (in terms of labor), and the overall transparency of the labor instructions.
At the same time, the increased economic growth can also heighten disparity between the economic classes within the financial system.
“Unfortunately, the problem for many countries is that wealth accumulation by the rich doesn’t yield any benefits for the poor in the absence of proper social safety nets.
While Switzerland has no doubt become more competitive than the U.S., it is fair to state that developing countries would need to develop more high-level financial policies to tackle issues such as poverty and wealth disparity.