The UK’s economy has become relatively less competitive compared to other countries, according to the World Economic Forum’s Global Competitiveness Index 2017/2018.
The annual rankings saw the UK fall from seventh to eighth place.
According to the report, the UK’s decline in competitiveness was not the result of Brexit. The latest ‘drop does not yet reflect the outcome of the Brexit negotiations,’ it noted. However, Brexit is ‘likely to further undermine the country’s competitiveness’ in the future.
Instead, the UK’s fall in the overall rankings was more due to improvements among other countries than any decline on the UK’s part.
The UK performed well when it came to technological readiness, ranking fourth overall. In terms of business sector sophistication, the UK also ranked seventh.
However, the UK’s macroeconomic environment remains challenging, the report noted. This may worsen in coming years ‘as the timeline for a reduction of the fiscal deficit is repeatedly pushed back.’
According to the report, the ‘most problematic factors for doing business in the UK’ were tax regulations (receiving a score of 11.9), closely followed by policy instability (11.3).
Also ranked highly as being impediments to doing business in the UK were: tax rates (10.6); inefficient government bureaucracy (10.5); inadequately educated workforce (10.3); inadequate supply of infrastructure (9.3). Crime and theft (1.2), poor public health (1.0), inflation (0.9) and corruption (0.00) were all found to have minimum effect on the ability to do business in the UK.
Rest of the World
Switzerland kept its place as the world’s most competitive economy, narrowly ahead of the United States and Singapore. The US’s second place was a lift up from its former third place ranking.
The Netherlands and Germany places remained the same as the previous year, while Hong Kong jumped three places, from ninth to sixth.
India was ranked as the most competitive economy in South Asia (40th, globally). Nepal and Bhutan, saw the largest improvements in the region, while Pakistan and Bangladesh upped their ranking by a few places. ‘Improving ICT infrastructure and use remain among the biggest challenges for the region: in the past decade, technological readiness stagnated the most in South Asia,’ the report noted.
In East Asia, Singapore remained the region’s most competitive economy (third, globally). However, most of East Asia performed well. As the report noted, ‘Among the 17 East Asia and Pacific economies covered, 13 have increased their overall score – albeit marginally – with Indonesia and Brunei Darussalam making the largest strides since last year.’
While China moved up by one ranking place (27th), the report raised concerns about the world’s second largest economy. ‘There have been signs of a productivity slowdown among the region’s advanced economies and in China, suggesting the need to pursue efforts to further increase technological readiness and promote innovation,’ it noted.
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