The World Competitiveness Ranking is considered an essential tool for evaluating the competitive position of countries and can be used by governments, businesses, and investors to make strategic decisions. The ranking results help identify strengths and weaknesses in countries’ competitiveness and can influence economic and business policies. The ranking is based on various indicators grouped into four main categories: economic performance, government efficiency, business efficiency, and infrastructure. These indicators analyze factors such as economic growth, productivity, investment in education and technology, quality of government institutions, labor market efficiency, and physical and digital infrastructure.
In the recently published 2023 edition, for the European case, out of the 31 countries included in the ranking, 61.3 percent (19) have shown negative or backward results, while 25.8 percent (8) of the countries have shown improvement or progress. Finally, 12.9 percent (4) of the countries have maintained their results from the previous year.
Among the 19 European countries that regressed between 2022 and 2023, Latvia stands out, falling 16 places from 35th to 51st. This regression was mainly due to a degradation of factors related to business efficiency and the deterioration of its infrastructure.
The second-worst-performing country in the region is Germany, the central economic pillar of Europe, which shows a decline of 7 places, moving from 15th in 2022 to 22nd in 2023. Germany’s fall is mainly due to degradation in all four categories analyzed in the ranking, with business efficiency being the most affected, experiencing an 8-place drop.
It is also worth noting that the United Kingdom and France show negative trends. In the case of the United Kingdom, it dropped six places, moving from 23rd in 2022 to 29th in 2023. This deterioration is primarily related to economic performance and business efficiency. As for France, it descended five places, moving from 28th in 2022 to 33rd in 2023, directly related to economic performance and government efficiency.
When studying the advancements of countries in the European ranking, it is noted that 8 of them have improved their position. However, Ireland stands out, climbing nine places, moving from 11th in 2022 to second in the global ranking in 2023. This remarkable progress is primarily attributed to government and business efficiency improvements.
The Czech Republic is the second country with the most notable performance, advancing eight positions from 26th in 2022 to 18th in 2023. This improvement is mainly attributed to government and business efficiency. A similar pattern can be observed in Belgium, which moved up eight places from 21st in 2022 to 13th in 2023, thanks to business efficiency, government efficiency, and infrastructure improvements. Another significant improvement is seen in Poland, which climbed seven positions in the ranking, moving from 50th in 2022 to 43rd in 2023.
Finally, when analyzing the countries that maintained their positions in the ranking, there are 4 of them, among which Denmark stands out. Denmark has held the top position since 2022. This position is primarily supported by business efficiency, where it has ranked first since 2020. Another main category where it shows improvement is infrastructure efficiency, where it ranks second since 2022.
Another country that maintained its 16th position from the previous year is Iceland, which showed improvements in the country’s economic performance. However, it degraded its results in government efficiency, economic efficiency, and infrastructure. In the case of Spain, it has maintained the 36th position since 2022. This case is similar to Italy, which holds the 41st position. Both countries do not show significant changes in the main categories of the ranking.
In conclusion, we observe a constant decline in European countries in the World Competitiveness Ranking. This phenomenon is attributed mainly to the international context, which is significantly affected by the conflict between Ukraine and Russia. This situation has diminished the region’s productive capacity, considerably impacting the performance of its economic pillars, such as Germany, France, the United Kingdom, and Italy. These countries are directly experiencing the effects of the war on their energy matrix.
* Erick R. Vilca Espejo is currently an intern at Fundación Internacional Bases
Source: We Are Innovation
