U.S. leads world in global competitiveness
UNITED NATIONS Ñ Despite the global economic gloom and parallel nervousness about financial markets, America nonetheless has the most competitive economy in the world. The findings come amid political perceptions concerning full recovery from the 2000 recession, as well as the continuing undertow from anemic economies in the European Union and Japan.
According to the World Economic ForumÕs annual Global Competitiveness Report/2002, the USA ranks first among 80 industrial and emerging economies. The reasons? High technology, public institutions, and sound economic policy. The strong link between research and development and ensuing technologies puts the U.S. in first place with Finland second, Taiwan third, and Singapore fourth.
The report cites the singular importance technology plays in sustaining economic growth. ÒWithout technological progress, countries may achieve a higher standard of living , for example, thorough a higher rate of capital accumulation, but they will not be able to enjoy continuously high economic growth.Ó
The report adds, ÒThe United States owes its position mainly to its stellar performance on technology related factors. Research and Development, collaboration between universities and business, the level of higher education, and a sophisticated and innovative business and academic community all contribute to the high ranking of the United States.Ó Equally the USA is praised for its strong venture capital sector and leadership in communication and information technology.
Finland also enjoys a very high level of technological sophistication; this fact became apparent to anyone visiting even years ago where cell-phones were far more common than in the U.S. Taiwan equally owes much of its high marks to its cutting edge leadership in technology, while SingaporeÕs strengths a rest primarily in the economic policy sector.
Dealing with economic policies, the World Economic Forum report stresses that Òproductivity and the creation of wealth are rooted in the sophistication of companies and operating practices as well as the quality of the economic business environment in which the nationÕs firms operate.Ó Here the US is in the leading position too as the report adds, ÒThe US appears to be in an excellent position to return to a sustained growth path.Ó Other countries with top ranking include the United Kingdom, Canada, Belgium, Taiwan and Ireland.
Significantly such oft described Òdragon economiesÓ like Hong Kong ranks 17th , South Korea 21st, while Mainland China comes in 33rd.
Among advanced counties such as Germany, France, Japan, and Italy, the report adds, ÒIn these countries significant changes in public policy are necessary to improve the environment for competition . Unless such improvement are implemented, companies will be prone to move operation or make new investments outside the countries.Ó
Indeed while Europe has reached high degrees of wealth creation and corporate sophistication, many EU economies still face the undertow of over-regulation and high tax environments supporting the millstone of grandiose social welfare systems. Witness for example the under investment in former East Germany by German firms who go elsewhere to avoid high labor costs and regulation.
GermanyÕs respected Frankfurter Allgemeine newspaper stated editorially, that while Chancellor Schroeder was originally nicknamed the Òbuddy of businessÓ his current Òanti-market policies alienated the German business community. Industry lobbyists called the governmentÕs labor market reform proposals Òstupid,Ó and predicted the imminent collapse of the German social welfare system.Ó The paper opined elsewhere that the Social Democratic government has Òstifled entrepreneurialism.Ó
Likewise in France one views crippling strikes throughout the public sector; when the dust settles the center-right government is still saddled with stifling labor laws and cumbersome commercial regulations. And Japan, remains in a perpetual political funk affecting its economic rebound.
At issue here seems not only that education, economic policy, and institutions create a safe business environment but a resounding proof that enterprise capitalism, despite its many constraints even here in the U.S., guarantees the greatest economic benefit for the greatest numbers of people.
John J. Metzler is a U.N. correspondent covering diplomatic and defense
issues. He writes weekly for World Tribune.com.
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