Belgium climbs 2 places in the WEF ranking of most competitive countries in the world
According to the World Economic Forum’s Global Competitiveness Report 2016-2017, Belgium has climbed 2 places in the worldwide ranking of countries based on their competitiveness. Belgium is currently at number 17 in the world. That brings us back to the position we held in 2012 and 2013, before we slipped down one place for two years running. Apart from that, there are various shifts in the global top 20, but no newcomers. The top three – Switzerland, Singapore and the US – remain unchanged.
Belgium’s strengths and weaknesses
In addition to the outstanding score for healthcare and primary education (3rd worldwide), an excellent higher education system (5th) with superb quality in maths and sciences (3rd), and top-level management schools (3rd), Belgium can also take a bow for its high-quality scientific research institutions (6th). Our technological readiness has remained more or less stable (at 15th). Finally, we have gained 1 place for innovation (15th), for the efficiency of our goods market (13th) and for our sophisticated business sector (11th).
In addition, we see marked progress in the development of our financial market (a rise of 7 places to 29th) and the efficiency of our labour market (a climb of 9 places to 45th). But despite these good progressions, we still score well below the overall Belgian position of 17th on these markers. Infrastructure (23rd), which was also traditionally a strong point, has slipped back 2 places again to clearly below our overall position.
The major factors holding Belgium back are still the tax system, government debt, the regulatory burden and very restrictive regulation of the labour market. We are dangling at the bottom of the ranking in all of these aspects and for some of these factors we continue to fall even further behind.
Leo Sleuwaegen, Professor of International Business Economics at Vlerick Business School, explains: “Belgium has strong fundamentals. But because of the deficiencies of the labour market – notwithstanding the improvement this year – our position remains behind that of the Netherlands and Germany. We do not manage to adequately channel our human capital towards new growth businesses and to use our full labour potential. The further decline of our position for infrastructure, where our position is clearly worse than that of neighbouring countries, is also an important issue to consider.”
Ranking of the most important countries relative to Belgium
The Netherlands continues on an upward trend: from 8th place in 2014 it went to 5th place last year, and this year it has moved up again, to number 4 in the world. For that our northern neighbours can mainly thank an improvement in the macroeconomic environment, an open and efficient goods market, and innovation.
Although Germany continues to score well (especially for the efficiency of its labour market and the macroeconomic environment), the country still lost a place (from 4th to 5th).
By contrast, France gained 1 place (21st), as it did last year, which is mainly the result of their sophisticated business sector and innovation.
Of the others, the United Kingdom is up 3 places (to 7th), while Luxembourg remains in the same position (20th).
With the exception of Finland – which has slipped again from 8th to 10th – the Scandinavian countries have managed to keep the strong positions they have occupied since the financial and economic crisis of 2008. Sweden has even gained 3 places (6th); Norway (11th) and Denmark (12th) have remained where they were.
Changes at the top
Switzerland is in 1st place for the eighth year in a row. The Swiss are at the top of the ranking for all the markers that are essential for growth in their intensive knowledge economy. Thanks to its innovative ecosystem the country is the undisputed leader in terms of innovation (1st) and sophisticated business sector (1st). Switzerland also knows better than any other country how to attract and keep talent: the Swiss are the best when it comes to the efficiency of the labour market (1st). In terms of technological readiness, too, they head the rankings (1st). Finally, Swiss government institutions are among the most efficient and transparent in the world.
Singapore remains in second place for the sixth year in a row. With a top 10 position for 9 of the 12 markers in this ranking, the country is one of the most uniformly performing economies.
With the United States in third spot, the top 3 remain unchanged from last year. The strength of the US economy is its unique combination of exceptional innovative capacity (4th), a huge market (2nd), an sophisticated business sector (4th) and very efficient financial (3rd) and labour markets (4th).
BRICS countries and Southeast Asia
Once again development in the BRICS countries has varied considerably. India (39th) has repeated last year’s stunt and has again made a spectacular jump of 16 places.
South Africa (43rd) and Russia (47th) have moved up slightly with a rise of 2 places.
China has kept its footing at number 28 and remains far and away the most competitive economy in the BRICS group. Nonetheless, the country did not manage to record any more advances in the past year, which indicates that this transition economy still faces a lot of challenges.
Macroeconomic instability and lack of confidence in the government have led to Brazil continuing its downward spiral (81st). After tumbling 18 places last year, it has fallen a further 6 places this year.
In Southeast Asia we notice a decline across the board amongst the ASEAN-5, the five largest countries in the region. The biggest loser was the Philippines (57th), which fell 10 places. Malaysia (25th) dropped 7 places, and Vietnam (60th) and Indonesia (41) both lost 4 places. Thailand (34th) limited its losses to 2 places.
As the Belgian partner for the annual WEF classification of the most competitive countries in the world, Vlerick Business School is responsible for the survey of Belgian business leaders. The WEF classification is based on an extensive survey of 138 countries, combined with various pieces of objective data that measure the competitive strength of each country.