Finland finishes second in WEF competitiveness report

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Finland continues to rank among the world's most competitive economies. According to the Global Competitiveness Report 2006-2007 by the Swiss-based World Economic Forum, Finland ranks number two.
      The annual survey, which came out on Tuesday, places Switzerland in first place. Sweden comes in third, and the United States finished sixth.
     
Finland also got effusive praise from the WEF's head economist Augusto Lopez-Claros.
      Lopez-Claros said that it is especially impressive that Finland is willing to maintain surplus budgets, which allows it to prepare for the demands set by an ageing population.
      Finland and the other Nordic Countries were again successful in public institutions, education, and health care. Corruption and inflation were seen as minimal.
      Criticism came over restrictions placed on the labour market, and the high level of taxation.
     
In recent years Finland has been a leader in many different comparisons of competitiveness. A slight deviation from the trend was a report published in May by the Swiss IMD Consultants, in which Finland fell from sixth to tenth place.
      According to Petri Rouvinen, head of research at Etlatieto, the project research and information services subsidiary of the Research Institute of the Finnish Economy (ETLA), the WEF study puts more weight on interviews with corporate executives, while IMD focuses on statistics.
      Rouvinen adds that the IMD studies penalise countries more than WEF surveys for the size of their public sectors. He notes that this does not take into account that the public sector reflects the values of Nordic citizens. "It would be more significant to investigate how efficiently the public sector operates."
      "It does not make much difference, if a country finishes second or sixth in the study. It is also important to keep in mind that success does not guarantee well-being in the future. Sometimes it can even be harmful, as praise can reduce incentive for renewal", Rouvinen says.
     
     
Note: The WEF has changed its methodology somewhat from last year, and the comparison figures given for 2005 retroactively reflect these adjustments. This may give rise to some confusion, as in our article last year we (correctly) listed Finland at #1. However, after adjusting the figures to bring them into line with the new weightings, Finland was placed 2nd last year behind the United States. Hence the report notes that Finland has remained in the same position. The relative placings of a number of other countries were similarly affected. Sweden, for instance, fell from the original 3rd place in 2005 to an adjusted 7th place, and hence can be claimed to "have risen four places" on this latest scoring. Switzerland, on the other hand, was originally listed in 2005 as 8th, but moved up four places under the new calculations. The WEF's own reporting does not state clearly that these adjustments have been made "after the fact", and thus some readers may wonder at the apparent discrepancies.   


Previously in HS International Edition:
  Finland heads WEF competitiveness league table for fourth time (29.9.2005)
  Finland up to 6th in new IMD Competitiveness survey (12.5.2005)

Links:
  WEF: Global Competitiveness Report 2006-2007

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