NZ drops two places on global competitiveness chart

New Zealand has slipped two places to 25th of 142 countries in the Global Competitiveness Index, overtaken by Israel and Malaysia.

However, the country’s score has remained stable since last year,

New Zealand’s overall performance was limited by innovation and business sophistication, the most important drivers of economic performance in advanced economies.

The Global Competitiveness Report is produced annually by the World Economic Forum. Switzerland ranked first for the third year in a row followed by Singapore, which overtook Sweden to claim second position.

Australia dropped four places to 20th while the US declined for a third year to fifth as macroeconomic vulnerabilities continued to build and some aspects of the institutional environment raised concern among business leaders.

Canada (12th) slipped out of the top 10, replaced by the UK. China improved by one place to 26th, continuing to lead the way for large developing economies.

Among the BRICS economies, South Africa (50th) and Brazil (53rd) moved upward while India (56th) and Russia (66th) declined.

The New Zealand Institute director Rick Boven said New Zealand needed to lift its performance more or its competitive position would continue to slide.

”The government has increased efforts and investment in innovation but we cannot yet see evidence of improvement. Other countries are doing more,” Dr Boven said.

The Global Competitiveness Index is made up of 111 indicators categorised into twelve pillars of competitiveness in three sub-indices: Basic requirements, Efficiency enhancers, and Innovation and sophistication factors.

New Zealand continued to do well in Basic requirements and Efficiency enhancers, ranking 17th (14th last year) and 18th (same as last year) respectively.

Strongest performance was in strength of investor protection (1st), diversion of public funds (1st), number of procedures to start a business (1st), quality of primary education (7th), and quality of math and science education (7th).

Areas that continued to constrain overall competitiveness included government procurement of advanced technology products (71st), availability of scientists and engineers (69th), state of cluster development (60th) and value chain breadth of exporting companies (59th).