Belgium drops a place in the WEF ranking of most competitive countries
Belgium has dropped by a place in the World Economic Forum’s ‘2015-2016 Global Competitiveness Report’ global ranking of countries according to their competitiveness, making Belgium the world’s 19th most competitive country. In spite of this drop, our competitiveness score, on which the ranking is based, has slightly improved (5.20 compared with 5.18 last year). However, other dynamic economies such as Malaysia are overtaking us. While there were various changes in the global top 20, there were no newcomers. The top three - Switzerland, Singapore and the United States - remained unchanged.
Belgium’s strengths and weaknesses
In addition to our excellent scores for healthcare and primary education (3rd place worldwide), our outstanding higher education (5) with excellent maths and science education (3) and high-quality management schools (2nd place), our country also has several high-quality institutions for scientific research (5). Our technological readiness remained stable (14th place) but in terms of innovation we slipped three places (16). Infrastructure, which has traditionally been a strength, also slipped three places this year. As a result, our ranking for this factor is even lower than Belgium's overall place in 19th position.
The main factors that let Belgium down are still the tax system, government debt, the regulatory burden and the very restrictive labour market regulations. Belgium is at the bottom of the ranking for all of these factors. However, our ranking for the latter two has slightly improved compared with last year.
Leo Sleuwaegen, professor International Business Economics at Vlerick Business School, explains: “Belgium has made progress in aspects that let us down significantly in the ranking in previous years, including in terms of its rigid labour market and regulations. Unfortunately the opposite is also true. We saw a relative decline in some of our traditional strengths, including innovation but especially infrastructure. Our position for this factor contrasts strongly with that of neighbouring countries, a development that may undermine the growth capacity of an open economy like Belgium in the long term.”
Ranking of the most important countries compared with Belgium
The fastest climber undoubtedly is the Netherlands: our neighbour moved up three places in the ranking and is now ranked 5th in the world. The Netherlands mainly scored well in terms of education (3), infrastructure (3) and institutions (10). The Dutch economy continues to be one of the most sophisticated (5) and innovative (8) economies worldwide, with an open and efficient market for goods.
Germany has moved up in the ranking (from 5th to 4th place) and mainly owes this position to the higher scores in terms of labour market efficiency and development of its financial market.
France also climbed one place (22), which is largely due to the better functioning of its labour market.
Like Belgium, Luxembourg (20) and the United Kingdom (10) slipped a place.
With the exception of Finland - which saw a sharp decline (from 4th to 8th place) - the Scandinavian countries maintained the strong positions they have held since the 2008 financial and economic crisis.
Changes at the top
Switzerland was ranked number one for the seventh consecutive year. Its innovative ecosystem makes the country the undisputed leader in terms of innovation (1) and its sophisticated business community (1). Switzerland also has a knack for attracting and retaining talent. The Swiss scored highest in terms of labour market efficiency (1), with an excellent understanding between employers and employees (1) and manages to strike a good balance between employee protection and business interests. Finally, the Swiss governmental institutions are among the most efficient and transparent in the world.
Singapore also maintained its second position for the fifth consecutive year. It is ranked in the top 10 for nine out of the twelve factors of this ranking, making it one of the countries with the most balanced economic performance.
The US remained in 3rd place. As a result, the top 3 was unchanged compared with last year. The strength of this economy continues to be the unique combination of exceptional innovative power (4), a very large market (2) and a sophisticated business community (4).
BRICS countries and South East Asia
The performance of the BRICS countries is quite varied. India made a spectacular leap of 16 places, from no. 55, putting an end to the downward spiral of the past five years. South Africa moved up seven places, narrowly making it back into the top 50 (49). Macro-economic instability and a lack of faith in the government saw Brazil drop by a whopping 18 places (75). As a result, the country reported one of the biggest drops in the entire ranking. China successfully maintained its 28th position in the ranking and continues to be the most competitive economy in this BRICS group by far. And yet the country failed to make further progress in the past year, which shows that this transition economy still faces a lot of challenges. Russia moved up the ladder from position 53 to 45, which is mainly due to a statistical adjustment in the calculation of purchasing power. The factors that benefit the Russian business community have also improved somewhat. The improvement in factors that influence growth, finally, conceal the recession that Russia is currently struggling with.
There are a number of striking changes in South East Asia among the ASEAN-5, the region’s five largest countries. Vietnam moved up 12 places (56); the Philippines gained five places (47). Malaysia is the only country in the top 20 (18). Thailand (32) and Indonesia (37) dropped behind slightly.
As the Belgian partner in the annual WEF ranking of most competitive countries, Vlerick Business School is responsible for the survey of Belgian business managers. The ranking is based on an extensive survey in 140 countries, combined with various objective data measuring each country’s competitive strength.