Four rungs up the ladder: Belgium claims its highest position ever in the World Economic Forum 2011 ranking

Results of the ‘Global Competitiveness Report 2011-2012’ of the World Economic Forum

As the Belgian partner in the annual WEF ranking of most competitive countries, Vlerick Leuven Gent Management School is responsible for the survey of Belgian business leaders. The ranking is based on an extensive survey of more than 14,000 business leaders in 142 countries, combined with various objective data measuring the competitive strength of each country.

After maintaining a steady position from 2006 to 2010, the ‘Global Competitiveness Report 2011-2012’ of the World Economic Forum (WEF) reveals that Belgium has climbed up 4 positions and is now ranked the 15th most competitive economy in the world. Thus, for the first time, Belgium has surpassed France and is closing in on Germany and the Netherlands. Moreover, this is also the highest position our country has ever achieved since the start of this ranking in 2001. After fluctuating between 20th place (in 2006 and 2007), 18th place (2009), and 19th place (2010), Belgium has now improved its ranking by 4 places in one jump.

Belgium attributes its competitive economy mainly to its excellent healthcare and its primary education: the country reached the 1st and 2nd positions, respectively, in these two categories in 2010 and maintained these places in the current report. A second factor explaining our No. 15 position is a rise in the ‘higher education and training’ category to 5th position worldwide, which is two rungs higher than in 2010. Moreover, the more detailed results for this category show that Belgium is now the absolute No. 1 country in the world in the ‘quality of management schools’ – an ascent of 3 places in comparison with our already good 4th position in 2010. This ranking indicates that Belgium is the pre-eminent country for management education.

Furthermore, Belgium is the 4th country in the world when it comes to the quality of port infrastructure. Other noteworthy results include: a stable No. 11 spot for ‘business sophistication’, and 11th position as well for the ‘technological readiness’ category (a jump of 2 rungs over 2010).

Interestingly, Belgium’s 2011 positions have improved over 2010 even in the dimensions in which we score lowest. This is especially the case for ‘financial market development’, where Belgium gained 6 positions (up to 28th place), and for the quality of infrastructure category, where Belgium climbed 4 positions.

The only dimension in which Belgium lost ground – which consequently has a negative impact on our country’s competitiveness – was ‘labour market efficiency’, where Belgium now ranks 44th (compared to 43rd in 2010).

Finally, from the business leaders’ perspective, in 2011 the most problematic factors for doing business in Belgium were the restrictive labour regulations, tax rates and the inefficient government bureaucracy.

Neighbouring countries

As was the case in 2010, most of our neighbouring countries continue to be more competitive than we are, with the exception of Luxembourg (23) and France (18). However, Belgium’s rise in the ranking has started to close the gap with our more competitive neighbours. The high tax burden, along with the high level of Belgian government debt, are the main reasons that we are less competitive than some of our neighbours.

Germany stands in 6th position, one rung down from last year. The United Kingdom is in the 10th position this year; and France dropped 3 rungs to 18th position in 2011, falling behind Belgium.

Belgium’s ambition for the next few years should be to climb into the Top 10. Our goal should be to catch the Netherlands, which climbed up one rung to No. 7, thanks especially to its market efficiency.

Changes at the top

Switzerland has retained its top place in the ranking.

Despite the fact that banks and financial institutions have largely recovered from the crisis, the US has slipped one rung to become the 5th most competitive country in the world, continuing its downward trend of the past few years: sliding from 1st position in 2008, to 4th in 2010, and now 5th. After improving slightly in 2010, macroeconomic stability has worsened in the US, along with the dimensions of higher education and training, technological readiness, business sophistication and, especially, innovation, where the US fell from 1st position in 2010 to 5th in 2011. Tax rates are regarded as the first problematic issue for business leaders in the US, while inefficient government bureaucracy is still the second main cause of concern.

The Scandinavian countries have maintained their positions at the top, despite the fact that Singapore has overtaken Sweden’s 2nd position, pushing Sweden down to No. 3. Finland is 4th, and Denmark 8th.

Strong institutions drive competitiveness

The countries that perform strongly appear to be those with the strongest institutions. Switzerland maintained its first position not only because of its first-rate infrastructure but also due to its excellent institutional environment. The US’s fall can be partially attributed to the public’s low trust in politicians and the concerns about government inefficiencies.

Ranking of most important countries in comparison with Belgium

Country

Ranking 2011

Ranking 2010

Change

Switzerland

1

1

=

Singapore

2

3

+

Sweden

3

2

-

Finland

4

7

+

United Staes

5

4

-

Germany

6

5

-

Nederland

7

8

+

United Kingdom

10

12

+

Belgium

15

19

+

France

18

15

-

Luxembourg

23

20

-

China

26

27

+

India

56

51

-

Brazil

53

58

+

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