Canada declines to 15th from 12th in latest global competitiveness ranking
By The Canadian Press
TORONTO (CP) - Canada’s international economic competitiveness has sagged again, according to the annual global competitiveness report released Wednesday by the World Economic Forum.
Canada fell to 15th this year from 12th in 2003, while northern Europe, the United States and Asia remained home to the most competitive economies, the survey indicated. In the annual study of 104 countries by the Swiss-based World Economic Forum, Finland kept the top spot for the third time in the last four years, followed by the United States. Rounding out the top 10 were Sweden, Taiwan, Denmark, Norway, Singapore, Switzerland, Japan and Iceland.
The bottom of the list was dominated by South and Central America, Asia and Africa, including Nicaragua, Madagascar, Honduras, Bolivia, Zimbabwe, Paraguay, Ethiopia, Bangladesh, Angola and - dead last - Chad.
“In 1998, Canada stood sixth in this ranking and in 2004 we stand 15th,” commented Roger Martin, dean of the University of Toronto’s Rotman School of Management and chairman of the Institute for Competitiveness and Prosperity, the forum’s Canadian partner.
Canada’s competitiveness rating has declined in all but one of the past six years, and “among the larger economies. we’ve fallen from fifth to eighth,” Martin added. “Canadian business and government leaders still have a lot of work to do to strengthen Canada’s competitive position in the world.”
The World Economic Forum said the Nordic countries fare well because of their aversion to corruption and respect for contracts, the rule of law and one-on-one business relationships.
In Sweden, for example, it’s customary that a handshake on a business deal is as binding as pages of contracts.
“The Nordic countries are characterized by excellent macroeconomic management overall - they are all running budget surpluses,” commented Augusto Lopez-Claros, chief economist and director of the forum’s global competitiveness program.
“They have extremely low levels of corruption, with their firms operating in a legal environment in which there is widespread respect for contracts and the rule of law, and their private sectors are on the forefront of technological innovation.”
Japan, No. 9 in this year’s ranking, has revived from 21st in 2001, boosted by its economic recovery.
China, however, slipped from 44th to 46th despite its roaring economy. The decline was attributed to heavy-handed administrative control, red tape and poor accounting standards.
Finland, home of mobile phone giant Nokia Corp., retained the top spot because of its readiness to adopt new technology, proactive business practices and “nurturing a culture of innovation,” the report said.
The United States was cited for technical innovation, offset by the instability of its economy.
The results of the annual survey were drawn from a survey of more than 8,700 business leaders in 104 countries.
For Canada, there was minor good news in the report: on an index meant to predict economic growth over the coming five to eight years, Canada’s position improved slightly to 15th from 16th. And Canada rose to 18th from 24th in the rating of public institutions.
But it fell to 13th from 10th in an index on the quality of the business environment, including financial markets and public administrative effectiveness.
And with regard to the sophistication of corporate operations and strategies Canada’s position declined to 16th from 14th.
The U of T’s Martin blamed Canada’s decline in overall competitiveness on the quality of the national business environment.
“If we are to break out of this malaise, our business leaders need to become more competitive through unique products and processes and compete more on adding value to products and services in areas such as product design and added services.”
