Canada sharpens its edge
Globe and Mail
By Heather Scoffield
Canada edged up in its ranking for global competitiveness, according to a report from the World Economic Forum.
A strong fiscal situation, efficient use of new technology and the development of a culture of innovation were Canada’s main competitive strengths, the WEF said in a statement.
Canada rose to 13th place from 15th on the WEF’s business competitive index, which compares business environments and the sophistication of company strategies and operations in 117 countries.
The United States placed first, followed by Finland and Germany.
And Canada climbed to 14th from 15th on the WEF’s growth competitive index, which estimates the underlying prospects for growth for the next five to eight years.
Finland placed first, followed by the United States and Sweden. Zimbabwe is at the bottom of both indexes.
“While we made improvements this year, we remain far from our potential on either scale — and all of us should take note,” commented Roger Martin, whose Institute for Competitiveness and Prosperity is the Canadian partner in the WEF survey.
On the business competitive scale, Canada did not fare well on the sophistication of buying practices and the competitive pressure in several key sectors, such as financial services, telecommunications and health services, said James Milway, executive director of the institute.
Indeed, on the sub-index measuring companies’ operations and strategies, Canada fell from to 18th from 16th.
If Canada wants to move up the scale, business leaders need to develop unique products and processes, and focus on adding value in areas such as product design and added services, Mr. Martin said.
On the growth index, Canada gained ground because of improved macro-economic stability.
“We have been well impressed by Canada’s strong performance among her G-7 peers, particularly the cautious management of the public finances,” the WEF’s chief economist, Augusto Lopez-Claros, said in a statement. “The accumulation of budget surpluses in recent years should give greater flexibility to the authorities in the event that commodity prices soften in the period ahead.”
However, Canada lost significant ground when it came to public institutions, probably because business respondents to the survey were upset about the Gomery inquiry about whether the federal government was involved in a kickback scheme in Quebec, said Mr. Milway.
As for technology, Canada is nurturing its capacity for innovation,, and there have been some improvements in research and development, Mr. Lopez-Claros said.
But he warned that the strength of the Canadian dollar could be a concern in the future.
The WEF’s Canadian partners at the Institute for Competitiveness and Prosperity have a different take on the strong loonie however. The currency’s strength could just be what the Canadian private sector needs to adopt better competitive strategies, said Mr. Milway.
“We think their strategies are as good as they need to be,” he said. Pressure from the Canadian dollar “is definitely going to make life miserable for a lot of exporters, but it’s that kind of misery that builds character.”
The indexes were drawn from a combination of data and surveys of company executives. The research tapped into nearly 11,000 business leaders in 117 different economies.
The aim of the rankings is to point out main strengths and weaknesses in a wide range of countries, to help identify areas for reform.
Finland took the top stop on the growth index for the fourth time in the last five years, partly because of high scores for its macro-economics, but also because of the quality of its public institutions, and because its companies are eager to adopt new technologies, the WEF said.
