Australia’s competitiveness declines

Australia has dropped another place in world competitiveness rankings, falling further in economic performance and government efficiency, raising concerns about the country’s competitiveness as a smart economy.

The Australian results of the IMD World Competitiveness Yearbook ranks and assesses 61 countries. The overall result is drawn from rankings for four key areas – economic performance, government efficiency, business efficiency and infrastructure. It found that Australia has slipped significantly in all these areas over the last five years.

Australia’s economic performance dropped four places to 28 from last year, with an overall drop of 15 places in the last five years. Worsening domestic economic conditions, rising unemployment and lower international investment have been the biggest contributors to the drop in the overall economic performance ranking this year.

While Australia only slipped one place compared to last year and five places in five years on infrastructure, the fact that the two areas where Australia slipped the most in this category was technological infrastructure and scientific infrastructure.

The Committee for Economic Development of Australia (CEDA) stated that this suggests Australia is losing ground as a smart economy, and lacks the infrastructure in place to compete in research and development.

While Australia has only dropped one place compared to last year on business efficiency, overall it has dropped 10 places in five years with productivity and efficiency highlighted as key weak areas.

Australia’s government efficiency ranking also dropped five places this year compared to 2014 – a drop of seven places in five years. The country’s ranking in public finance is the biggest contributor to this drop, slipping from 13 last year to 28 this year. The reasons behind this fall have been cited as worsening budget deficit as a share of GDP and rising real government debt growth.

The US retained the number one spot in the rankings followed by Hong Kong, Singapore and Switzerland. The top four have remained the same since 2014 with Hong Kong and Switzerland swapping places this year.

For the first time in 18 years, New Zealand has jumped ahead of Australia in the rankings, moving to 17 from 20. 

Further details on Australia can be found here.

The complete rankings can be found here.