Finland heads WEF competitiveness league table for fourth time

Entire Nordic region placed in top ten countries

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Finland was once again ranked #1 in the Swiss-based World Economic Forum's annual assay of the world's most competitive economies - for the fourth time in five years. The listing included 117 countries, and the bottom places in the table went to Chad, the Kyrgyz Republic, and Guyana.
      The top three "podium places" in the Growth Competitive Index category (measuring conditions for growth over the next five years) were occupied by the same countries as one year ago - the United States and Sweden came in 2nd and 3rd respectively.
      The countries of the Nordic region all performed well on the CGI, with Denmark, Iceland, and Norway all taking up a position inside the top ten. Iceland moved up three places from 10th, and conversely Norway slipped downwards three places from 6th in 2004. Denmark overtook Taiwan to move into 4th spot.
      The survey combined "hard" and "soft" data, in the sense that it included concrete statistical indicators and a questionnaire in which local corporate leaders made their comments on economic conditions in their respective countries.
     
Finland scored very high marks for its education system, for the public sector budget surpluses, and for their role in planning for a future that promises an ageing population. Corporate leaders also considered Finnish officials to be reliable and the public institutions to be efficiently run. This was one area in which Finland outscored the United States, generally recognised as the most technologcally-advanced nation - there the business community expressed concern at the government's "ability to maintain arm's-length relationships with the private sector, and in the formulation of policies more generally". American respondents were also gloomy about the health of the macroeconomic environment in the U.S., particularly in the public sector.
      The positive factors cited for Finland, together with a private sector that came in for praise for its readiness to adopt new technologies and to "nurture a culture of innovation", were sufficient to offset the one major black mark - high taxation.
      The WEF acknowledges the "stellar performance" of the welfare-statist Nordic countries, and even comments on how this bucks the conventional wisdom "that high taxes and large safety nets undermine competitiveness, suggesting that what is important is how well government revenues are spent, rather than the overall tax burden per se".
     
Whilst broadly welcoming the figures, the Research Institute of the Finnish Economy (ETLA) was quick to issue caveats that there was no cause to get overly excited about the WEF standings. ETLA also took part in the gathering of the data for the WEF's report.
      According to the ETLA managing director Pekka Ylä-Anttila, the report gets a considerable amount of media exposure each year, but should not be taken too seriously. He also noted that the WEF Growth Competitiveness Index does not give an accurate picture of what is going to happen to the economy in reality.
      A "rival" establishment, the Institute for Management Development, which is also headquartered in Switzerland, publishes a similar report each spring, and in the latest of these, Finland was "only" in sixth place, though the ranking had improved from 8th in the previous year.
      Pekka Ylä-Anttila also downplayed the significance of "being #1", suggesting that the well-being of citizens has little to do with whether the country is first or fifteenth in such assays. "Now if we were somewhere down in the 50s, then we could start to feel concerned", he said.


Previously in HS International Edition:
  Finland up to 6th in new IMD Competitiveness survey (12.5.2005)
  Finland ranked again as world's most competitive economy (14.10.2004)

Links:
  World Economic Forum
  WEF Table for Growth Competitiveness Index, with comparison for 2004¨

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