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The Netherlands drops to 8th place in world competitiveness index

The World Economic Forum has released its annual Global Competitiveness Report (GCI), revealing that the Netherlands has fallen three places to eighth place in the world's most competitive nations, after being ranked fifth last year.

The top three spots were all the same as the 2012 report: Switzerland first, followed by Singapore and Finland.

In the rest of the top 10, Germany, Hong Kong, Japan and the United States all improved in their rankings this year, while Sweden and the United Kingdom, like the Netherlands, saw their rankings drop.

The Netherlands’ position

After having moved up to fifth position in 2012, the Netherlands’ drop to eighth is mainly attributable to its weakening financial markets and rising concerns over the stability of banks.

The report rated the country’s strengths as its highly sophisticated (4th) and innovative (10th) businesses, as well as the way it is rapidly harnessing new technologies for productivity improvements (8th).

It was also praised for its excellent education system: fourth in primary education and sixth in higher education. Its infrastructure was also rated very highly, with its maritime infrastructure ranked in first place, while air was fourth and rail was 11th.

Europe’s situation

The report states that efforts to tackle public debt and avoid a break-up of the euro have taken the focus off addressing the deeper competitive issues that plague many European nations.

While the report said that the world economy was slowly emerging from crisis, the prospects for the eurozone are more uncertain, despite the eurozone break-up having been averted.

In particular, it focused on the persistent unemployment and economic recovery challenges in Europe that could put its future economic performance at risk.

It highlighted Spain (ranked 35th), Italy (49th), Portugal (51st) and Greece (91st) as all needing to continue to address weakness in the functioning and efficiency of their markets, boost innovation and improve access to finance.

The report

The GCI defines competitiveness as "the set of institutions, policies and factors that determine the level of productivity of a country." The scores are calculated from data covering 12 categories including institutions, infrastructure, education, efficiencies of markets, technology and innovation.

This year, the report highlighted excellent innovation and strong institutional environment were increasingly more important for a country’s competitiveness.

Founder and Executive Chairman of the World Economic Forum Klaus Schwab said that "Innovation becomes even more critical in terms of an economy’s ability to foster future prosperity. I predict that the traditional distinction between countries being 'developed' or 'less developed' will gradually disappear and we will instead refer to them much more in terms of being 'innovation rich' vs. 'innovation poor' countries."

Top 10 competitive countries

  2013 2012
Switzerland 1 1
Singapore 2 2
Finland 3 3
Germany 4 6
United States 5 7
Sweden 6 4
Hong Kong 7 9
Netherlands 8 5
Japan 9 10
United Kingdom 10 8


For more information and the full list of rankings, read the full report or take a look at what is a competitive economy?

Source: WEF

Alexandra

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Alexandra Gowling

Alexandra is an Australian citizen and an experienced expat, having spent (quite a bit of) time in Asia before coming to the Netherlands a year ago. She enjoys writing, reading...

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