LONDON—Declining confidence in the U.S. politicians has eroded the country’s ability to compete on the global stage for the fourth consecutive year, according to an annual survey from the World Economic Forum.
Switzerland tops the overall rankings of 144 economies in the Global Competitiveness Report 2012-13, followed by Singapore. The Forum said Switzerland’s standing rests notably on its innovation and labour market efficiency, as well as the sophistication of its business sector.
Including Switzerland, six northern European countries make up the top 10. Others on the leaderboard include Hong Kong and Japan, while central African country Burundi took last place.
Canada ranked 14, down two spots from the 2011-12 Global Competitiveness Index.
Even though the world’s largest economy saw its overall competitiveness rise on its status as a global innovation powerhouse, the Forum says the U.S.’s ranking has dropped two places to seventh this year. The Netherlands and Germany have moved ahead of the U.S. in the top 10.
The Forum—which also hosts an annual gathering of global business and political leaders in the Swiss ski resort of Davos every January—ranks a country’s competitiveness according to factors such as the state of its infrastructure and its ability to foster innovation.
A little over a year ago, the U.S. lost its triple A credit rating from Standard & Poor’s after a stand-off between Republicans and Democrats over the raising of the debt ceiling stoked fears of a potential debt default.
Though northern European countries have consolidated their positions since the financial crisis of 2008, the survey found that those in southern Europe, such as Greece, Portugal, Spain and Italy, continue to suffer from a host of economic problems such as poor access to financing and rigid labour markets. Greece is faring worst of Europe’s problem economies and is ranked 96th.
Elsewhere, the Forum found that leading emerging economies are displaying different performances. China, at 29th place, has risen in the rankings and leads the group, while Brazil has moved up to 48th. However, others such as South Africa, India and Russia have fallen.