2023 Global Competitiveness Index: India at 40, Ireland leaps to 2 & Singapore slides to 4

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

India has ranked 40th on the latest world competitiveness ranking released by the International Institute for Management Development (IMD). The country has slipped three spots from last year, but is still positioned better than the 43rd rank in 2019-21.

According to the IMD's World Competitiveness Centre (WCC) report, India progressed in government efficiency but lagged in business efficiency, infrastructure and economic performance. Key contributing factors to the country's score were exchange rate stability, compensation levels and advancements in pollution control.

The report also outlined challenges facing India in 2023, such as sustaining high GDP growth, managing financial market volatility, controlling inflation and fiscal deficit, accelerating digital transformation and mobilising resources for infrastructure development.

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Who topped?

Out of the 64 economies ranked in the annual report, Denmark, Ireland and Switzerland claimed the top three spots, while the Netherlands, Taiwan, Hong Kong, Sweden, the US and the UAE completed the top 10.

Notably, Ireland leapt in this year's ranking, soaring from 11 position to the second spot. This can be attributed to its performance in the economic domain, where it secured the top position, climbing from seventh place. Factors which contributed to Ireland's advancement include a skilled workforce, high educational attainment, policy stability, predictability, a competitive tax regime and a business-friendly environment.

Meanwhile, Singapore dropped to the fourth position from the ethird spot. In 2021, the country ranked fifth, after securing the top position in 2019 and 2020. The report attributed the drop to specific aspects of government efficiency, such as competition legislation and adaptability of government policy. Nonetheless, it demonstrates strong performance in other areas, securing second place in employment, fourth place in international investment and sixth place in productivity and efficiency.

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Further, Denmark maintained its top position by consistently performing well across all measured competitiveness factors — excelling in business efficiency and infrastructure, while also displaying improved results in government efficiency. Switzerland secured the third spot, demonstrating strong performance across all competitiveness factors, particularly in government efficiency and infrastructure. However, it experienced a slight decline in business efficiency and improved its economic performance.

Factors

The 2023 rankings indicated that economies that delayed their reopening after the Covid-19 pandemic were starting to witness improvements in their competitiveness. Thus, Thailand, Indonesia and Malaysia showed progress in the ranking, while early-opening economies like Sweden and Finland experienced a setback.

Overall the European region performed well in the ranking, with five economies securing positions in the top 10.

Professor Arturo Bris, Director, WCC emphasised the importance of a country's ability to generate prosperity for its people, stating that China and the United States are still striving to achieve this fully. “The ranking provides valuable insights for evaluating different business environments, supporting international investment decisions, and assessing the quality of life in each country,” he added.

The report also observed that the most competitive countries at the top of the list have unique approaches to achieving competitiveness. Most of these nations are small and take advantage of market access and trading partnerships. Additionally, highly competitive economies tend to have robust and efficient institutions.

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Christos Cabolis, WCC's Chief Economist, emphasised the importance of agility and adaptability in navigating today's unpredictable environment. Resilient economies, such as Ireland, Iceland, Bahrain, the UAE, Saudi Arabia, Qatar, and Singapore, have excelled in building resilience and adapting policies based on current economic conditions, he noted.

Methodology

The IMD World Competitiveness Yearbook (WCY), first published in 1989, is a comprehensive annual report that serves as a global reference point for a country's competitiveness. It employs surveys, statistical data and trends to evaluate and rank the competitiveness of 64 countries on various aspects, including GDP, productivity, and how countries manage political, social and cultural factors to achieve long-term value creation.

The ranking results rely on a combination of hard data and survey responses. Two-thirds of the overall ranking results are based on hard data, which includes 164 competitiveness criteria, while the remaining one-third is derived from 92 survey questions answered by 6,400 senior executives.