World Economic Forum Global Competitiveness Report 2012-13: Top 10

The United States slips from fifth to seventh in the annual rankings, which, this year, have Switzerland on top.

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1. Switzerland

Fireworks illuminate the sky Aug. 11 during the Geneva Festival in Switzerland. The nation took first place in the World Economic Forum’s Global Competitiveness Report, released Sept. 5. In a brief summarizing the top country rankings, the authors write that Switzerland’s “most notable strengths are related to innovation and labor market efficiency, where it tops the [Global Competitiveness Index] rankings, as well as the sophistication of its business sector, which is ranked 2nd.” In order to maintain that edge, however, the authors note that Switzerland, home to the Forum’s headquarters, will need to raise its university enrollment rate, ”which continues to lag behind that of many other high-innovation countries, although this has been increasing in recent years.”

Salvatore Di Nolfi / AP

2. Singapore

Supertrees illuminate Singapore's financial skyline from the newly opened Gardens by the Bay light and sound show. The country comes in second again this year, with report authors writing that “the country’s competitiveness is reinforced by a strong focus on education," and that, overall, its ranking is a “result of an outstanding performance across the entire Index.”

Wong Maye-E / AP

3. Finland

Finnish President Sauli Niinisto greets Russian Foreign Minister Sergei Lavrov, left, in Helsinki on Aug. 20. Finland ranks third in the forum’s competitiveness rankings. The authors note that Finland “boasts well-functioning and highly transparent public institutions,” ranking second in that category. But the country’s “macroeconomic environment weakens slightly on the back of rising inflation (above 3 percent), but fares comparatively well when contrasted with other euro-area economies.”

Sari Gustafsson / AP

4. Sweden

Visitors stand outside of Stockholm Castle on the island of Stadsholmen, Sweden. Sweden is fourth in the competitiveness rankings. The country fell one place, overtaken by Finland. The forum authors describe the nation’s “public institutions” as “first-rate,” with the private sector also receiving “excellent marks.” But they go on to write that “we registered a slight but consistent deterioration in the country’s institutional framework over the past three years.”

Lukas Barth / DAPD

5. Netherlands

A man crosses a bridge in heavy snow in Amsterdam. The Netherlands ranked fifth. “The improvement reflects a continued strengthening of its innovative capacity as well as the heightened efficiency and stability of its financial markets,” the forum authors wrote. “And although the country has registered fiscal deficits in recent years (5.0 percent of GDP in 2011), its macroeconomic environment is more stable than that of a number of other advanced economies.”

Margriet Faber / AP

6. Germany

Chancellor Angela Merkel leads Germany, which ranks sixth, as it did last year. The authors tout the country’s strong infrastructure, a category in which it ranks third, and an “efficient” goods market alongside a “sophisticated” business sector. However, authors note that Germany’s educational system could stand to improve and the European debt crisis has also taken a toll, reflected in the downgrading of the country’s credit rating.

Michael Sohn / AP

7. United States

Barry Austin works on a golf car production line at the E-Z-GO plant in Augusta, Ga. The United States fell two slots in this year’s rankings, coming in seventh. According to the authors, “a number of escalating and unaddressed weaknesses have lowered the US ranking in recent years.” These include the business community’s continued criticisim of the public and private sector. The authors placed a particular emphasis on the declining trust among businesses in the country’s political leaders. The authors write that this lack of trust is “perhaps not surprising in light of recent political disputes that threaten to push the country back into recession through automatic spending cuts.” However, the authors note a silver lining: Indicators point to a continued economic recovery, ”thanks to the rapid intervention that forced the deleveraging of the banking system from its toxic assets following the financial crisis.”

Rainier Ehrhardt / AP

8. United Kingdom

The United Kingdom and the iconic Big Ben rose two slots this year to eighth in the competitiveness rankings. According to the report authors, the country’s macroeconomic environment continues to be “the greatest drag” on its competitiveness. But the “efficiency of its labor market” and its “sophisticated” and “innovative” businesses helped propel the country up the rankings.

Julio Cortez / AP

9. Hong Kong

An aerial view shows Tower 2 at the International Finance Center in Hong Kong, which places ninth. It comes in second among the Asian economies with China notably missing from the top 10. The report authors write that “the economy’s financial markets are second to none, revealing high efficiency and trustworthiness and stability of the banking sector.” However, like others in the top 10, education could use improvement, according to the authors. “Although the quality of education in Hong Kong is good ... participation remains below levels found in other advanced economies. ... Improving educational outcomes will also help.”

Paul Hilton / Bloomberg News

10. Japan

A view of Tokyo from the first observatory deck of Tokyo Skytree. Japan has fallen from ninth to 10th place this year, with authors observing that the country "continues to enjoy a major competitive edge in business sophistication and innovation.” But, with the second-highest budget deficit of all the countries ranked, and the highest public debt levels, its competitiveness, according to the report authors, took a hit.

Issei Kato / Reuters

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