New Zealand slips in world rankings
Qatar is more competitive than New Zealand according to the Swiss-based World Economic Forum.
New Zealand’s three-place slide on the World Economic Forum’s latest competitiveness rankings to 23rd out of 139 economies is pegged to a failure to lift innovation performance.
The Global Competitiveness Index is made up of three sub indices - basic factors, efficiency factors and business sophistication and innovation factors. For the full report, click here.
While New Zealand is a high performer on the basic factors index, with high world rankings in health and primary education, it also climbed with the government’s debt performance, but largely because of declines in other countries.
Dragging us down to 14th place on the basic factors index, however, was infrastructure with electricity, road, rail and mobile phone subscriptions areas with poor rankings.
Economic think-tank New Zealand Institute director Rick Boven said the drop in overall ranking was disappointing and resulted from insufficient effort to lift innovation performance over a long period of time.
“Innovation drives the competitiveness and prosperity of advanced economies,” he said.
“Now that innovation is on the government’s agenda, innovation and competitiveness should improve, but only if sufficient investment and effort is made in the most important areas.”
Dr Boven said the survey highlighted several government policy opportunities that would positively influence competitiveness.
They included increasing the national savings rate, encouraging cluster formation and development, using government procurement to develop advanced technical products, assisting to attract retain and develop scientists and engineers and continuing to invest in infrastructure that lifts productivity.
Innovation and business sophistication factors proved to be a challenge for New Zealand which ranked 28th out of 32 in its peer group of economies, down one on last year.
New Zealand’s scientific institutions, the level of university collaboration with industry in research and development, willingness to delegate authority and the quality of local supplies were factors that earned positive ticks. However, New Zealand was still ranked below 50th for the value chain breadth of exporting companies, state of cluster development, availability of scientists and engineers, the competitive advantage in international markets of unique products and quality of local suppliers.
While New Zealand slid three places, its competitive score of 4.92 fell only slightly against last year’s 4.98.
The slide was partially attributed to Qatar and Saudi Arabia in the Middle East and Luxembourg in Europe lifting their competitiveness.
Switzerland, the home of the World Economic Forum, retained its spot as the world’s most competitive nation.
Sweden captured the second spot after climbing two places.
Singapore, the highest ranked Asian country, maintain its place at 3rd.
Meanwhile the United States fell two spots to 4th, largely blamed on a lack of macroeconomic stability.
Leading the Eurozone countries in 5th position was Germany.
Three of the BRIC economics were stable with India at 51st, Brazil 58th and Russia 63rd, but China moved up two places to 27th, just four spots behind New Zealand.