Finland ranked again as world’s most competitive economy

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The Switzerland-based World Economic Forum has again ranked Finland as the world’s most competitive economy with respect to prospects for economic growth. The WEF’s Global Competitiveness Report 2004 - 2005 also finds that Finland has the second-best business environment - right after the United States.
      The top ranking in the Global Competitiveness Report is the third time in four years that Finland has attained the spot. The factors that are considered in determining the ranking include the quality of the economic environment in a broad sense, the state of public institutions and legislation, and the country’s technological readiness.
     
An examination of the operational environments of companies reveals that Finland has been overtaken by the United States, which has benefited from easy access to risk capital, intense local competition, and the easy availability of local high-quality subcontractors.
      Finland is also praised in the report:
      "The country is very well managed at the macroeconomic level, but it also scores very high in those measures that assess the quality of its public institutions", writes WEF chief economist Augusto Lopez-Carlos in the report.
      He also notes that Finland has very little corruption and that the corporate environment puts a high value on respect for the law and complying with contracts. He adds that the Finnish private sector is able to adapt to new technologies and operate in a culture of innovation.
     
Also praised are Finland’s budget surpluses in recent years, as the country prepares for the costs of caring for an ageing population.
      The main problems with Finnish competitiveness are linked with taxation and the regulation of labour markets.
      All Nordic Countries rank among the top ten in the WEF report. The report covers a total of 104 countries.
     
Another Swiss institution making comparisons of competitiveness, the International Institute for Management Development (IMD), put Finland in eighth place in a comparison of countries published in the spring.
      Petri Rouvinen, head of research at the Research Institute of the Finnish Economy (ETLA), attributes the poor showing in that study to the debate over the export of jobs to China at that time. Views of corporate managers of the state of the country were clearly more pessimistic at the time than they had been a year earlier.
      "It would seem that the WEF indices are not as well in tune to competitiveness as those of the IMD", Rouvinen says.
      However, he says that both reports indicate that the basic factors in Finnish competitiveness are on track.
      "Technological and other types of know-how are at a high level, the institutions of the national economy work, and the macro economy is balanced", Rouvinen points out.


Previously in HS International Edition:
  Finland returns to number one spot in global competitiveness survey (30.10.2003)
  USA snatches back Finland's title as world's most competitive economy (13.11.2002)
  Finland is the most competitive country in the world (19.10.2001)

Links:
  World Economic Forum Global Competitiveness Report

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