People like numbers, as long as there are not too many. And people have a broad grasp of rankings: they know the difference between coming first in a race and coming last. From this comes some of the appeal of competitiveness rankings. I understand this appeal: I worked myself in that area for many years, supporting the National Competitiveness Council in Ireland, and also involved in policy benchmarking at EU level and being part of an international competitiveness network. However, in our NCC reports we resisted the temptation to have an aggregate ranking, because we felt that it would conceal more information than it revealed.
Nevertheless, competitiveness rankings are well established. The two big ones, the IMD and the World Economic Forum rankings, are widely quoted and governments and businesses appear to take them seriously enough. Both reports work in the same basic way, gathering indicators of what are believed to be the factors of competitiveness and putting them together in composite sub-rankings which are then combined into a single ranking for those who want an overview. The key results are here:
|Rank||IMD 2017||IMD 2018||WEF 2017-2018|
|2||Switzerland||Hong Kong SAR||USA
|6||Ireland||Denmark||Hong Kong SAR
Clearly there are similarities, but also surprises. For IMD, the United Arab Emirates ranks seventh in the world, and, unlike WEF, IMD finds no places in the top ten for large advanced economies such as Germany, the UK and Japan.
The IMD 2018 Report came out in May 2018 and the website gives the rankings for 2017 and rankings and scores for both 2017 and 2018. By scores is meant a composite index prepared in order to provide a ranking. A quick look at these shows three things
1. First of all the top ten doesn’t change very much. As in a football league, two drop out (Ireland and Luxembourg) and two are promoted (Norway and Canada).
2. If we look at all 43 countries covered by IMD, we find that the most competitive countries are most similar. The top ten are closer to each other than lower groups are.
3. These single rankings actually don’t tell us very much: the underlying data is probably far more interesting.