Donald Trump rose to power in the US in large part due to his promises to revitalise and grow the country’s economy, and business and trade and industry infrastructure. Whilst, where Trump is concerned, it is almost impossible to separate the reality from the “fake news”, many indicators have provided evidence of an upturn.
The stock market has surged, hitting all time highs; there have been huge investments made into revitalising US manufacturing, with promises extracted from major business leaders, including Apple’s Tim Cook. There has also, inevitably, been controversy; an escalating trade war with China, threats to withdraw from major trade agreements, and unprecedented amounts of hiring and firing, friction, tension, bluff, and counter-bluff.
If one word sums up Trump’s approach to the business of stimulating the economy better than any other, then that word is competitiveness. Small wonder then, that according to the latest rankings compiled by the International Institute for Management Development (IMD), for 2018, of the world’s most competitive economies, the US has reclaimed the number one spot.
The IMD’s rankings, which the research centre has been compiling since 1989, making 2018 a 30-year anniversary, look at more than 250 different factors, giving double the weight to “hard” data; rates of employment, trade and industry data; versus “soft” data; derived from an Executive Opinion Survey that questions business leaders’ perceptions of issues such as corruption, environmental concerns, and quality of life.
It certainly sounds a little “Trumpian”, and indeed the report ranks America first out of the 63 countries included in the report for both economic performance and infrastructure, which tallies with the President’s bullish and evidence-driven approach to growing an economy; focusing on traditional strengths such as manufacturing, finance, and bringing its considerable global influence to bear with decisive deal-making.
But Arturo Bris, Director of the IMD World Competitiveness Center, also notes that “this year’s results reinforce a crucial trait of the competitiveness landscape. Countries undertake different paths towards competitiveness transformation.”
“One economy, for example, may build its competitiveness strategy around a particular aspect such as its tangible and intangible infrastructure; another may approach competitiveness through their governmental efficiency.”
This helps to explain how Hong Kong, last year’s number 1 ranked country, and Singapore, occupy second and third spot respectively in the rankings. Both are Asian “Tiger” economies, famed for their competitive spirit, and financial and business acumen, which allow them to punch above their weight. Both are major global financial centres; but clearly, due to their size, both must take a radically different approach to their rivals when it comes to their economies. Neither, for example, could mimic the US by becoming more inward-looking, lacking the population size, and natural resources.
Both Singapore and Hong Kong have developed business-friendly environments and cultures that attract outstanding global talent, and both have demonstrated versatility, shuffling their packs when the tide turns against a particular industry. For example, Singapore has become a global hub for financial technology, as old-school financial services have begun to lose market share to more agile startups, and Hong Kong likewise. The government of Hong Kong has also had to show that it can move with the times socially, which is slowly being achieved thanks to the efforts of a new generation of entrepreneurs, business leaders and politicians.
European countries The Netherlands and Switzerland occupy 4th and 5th spots in the rankings. According to the IMD the Dutch have successfully struck a balance between economic performance, government and business efficiency, scoring in the top 10 globally for all three measures. The two countries have swapped places since last year, with Switzerland experiencing a slight slowdown in exports and facing the threat of partially losing its sizeable share of the R&D market.
Nordic countries, which consistently score highly in rankings for everything from business, to lifestyle, to education, quality of life, business environment, and social cohesion; occupy 3 of the next 5 spots; Denmark (6th), Norway (8th) and Sweden (9th), with the UAE (7th) and Canada (10th) completing the top ten.
Britain may find some encouragement in Norway, a non-EU European country, ranking so highly – although the country is rich in natural resources whereas Britain, which ranked 20th overall, relies heavily on its service economy.
As a region, the rankings suggest Eastern Europe’s economies are becoming more competitive, thanks to factors including better management of government debt, increased exports and a reduction in corporate taxes.
Despite political tensions, countries in the Middle East are also climbing the rankings, whilst progress is being made in South America, despite placing low down the rankings. Venezuela, mired in social and political conflict and suffering from hyperinflation and the devastation of its oil trade, drops to rock bottom overall.
Some may find it astonishing to see a Trump-led economy leading the rest of the world (China only places 13th), but the report does not offer up any points for popularity. Trump’s hyper-competitive, win-at-all-costs approach, seems to be working. That said, perhaps the US achieved its lofty position in spite of, rather than because of anything the President has said, done, or tweeted.
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