New Delhi: The International Institute for Management Development (IMD) recently published the latest world competitiveness ranking, revealing that India has slipped three spots to finish 40th.
Despite this decline, it is still an improvement compared to its placement at 43rd for three consecutive years from 2019 to 2021.
The report highlights India's progress in government efficiency but identifies areas of concern such as business efficiency, infrastructure, and economic performance.
The three key factors that positively influenced India's score were exchange rate stability, compensation levels, and advancements in pollution control.
However, the country faces several challenges in 2023, including sustaining high GDP growth, managing financial market volatility, controlling inflation and fiscal deficit, accelerating digital transformation, and mobilizing resources for infrastructure development.
Meanwhile, Singapore also dropped a position in the rankings. The IMD's World Competitiveness Centre (WCC) previously ranked Singapore fourth out of 64 economies in its annual report, after climbing to third place the year before. In 2021, Singapore ranked fifth, having secured the top position in 2019 and 2020.
The top three spots in the ranking were taken by Denmark, Ireland, and Switzerland, respectively. The rest of the top 10 included the Netherlands, Taiwan, Hong Kong, Sweden, the United States of America, and the United Arab Emirates. The 2023 results demonstrate that economies that opened up later after the Covid-19 pandemic are starting to witness improvements in competitiveness. For instance, Thailand, Indonesia, and Malaysia saw improvements in the ranking, while early-opened economies like Sweden and Finland experienced a setback.
Europe showcased its competitiveness with five economies in the top 10 in 2022. The IMD World Competitiveness Yearbook (WCY), first published in 1989, is a comprehensive annual report that serves as a global reference point on country competitiveness. It assesses 64 countries using surveys, statistical data, and trends, benchmarking their competitiveness based on long-term value creation, management of competencies, and their ability to generate prosperity.
The ranking provides a valuable tool for evaluating diverse business environments, supporting international investment decisions, and assessing the impact of public policies. It serves both managers and policymakers and offers insights into the quality of life in each assessed country.
The report is developed in collaboration with a network of 57 local partner institutes. In Singapore, the institute works with the Ministry of Trade and Industry's economics division and the Singapore Business Federation, while in India, it partners with the National Productivity Council.
The World Competitiveness Ranking incorporates 336 competitiveness criteria derived from extensive research using economic literature, international, national, and regional sources, as well as input from the business community, government agencies, and academics. The criteria are regularly updated to align with new theories, research, data availability, and the evolving global economy.
The ranking results are based on a combination of hard data and survey responses. Hard data comprises 164 competitiveness criteria derived from research and sources, while surveys consist of 92 questions answered by 6,400 senior executives. Hard data accounts for two-thirds of the overall ranking, while survey data represents one-third.
Ireland showcased the most impressive improvement in this year's ranking, jumping from 11th to second place. The country's remarkable economic performance, skilled workforce, high educational level, policy stability and predictability, competitive tax regime, and business-friendly environment contributed to its ascent.
The report observes that the top-ranked countries each adopt unique approaches to competitiveness. Many are smaller nations that effectively leverage access to markets and trading partners. Additionally, the most competitive economies tend to possess strong and efficient institutions.
Denmark secured the top position due to its consistent achievements across all four measured competitiveness factors. It excels in business efficiency, ranks high in infrastructure, and has improved government efficiency.
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