Key factors determine a country’s economic ranking including the business environment, infrastructure, tax rates, and the general ease of operations within that country.
The world’s top ten economies can be determined by examining factors such as growth prospects, business environments, infrastructure, educational levels of the citizens, and governmental policies and institutions.
Perhaps the most authoritative ranking is the Global Competitiveness Report. It is produced in conjunction with the World Economic Forum, and captures both the perceptions of thousands of business leaders and statistical analysis by academics at universities and think tanks worldwide.Indeed, it includes the WEF’s Global Competitiveness Index, developed by Professor Martin at Columbia University, and the Business Competitiveness Index, developed by Professor Porter at the Harvard Business School.
According to the Global Competitiveness Index 2007 - 2008, the top ten economies of the world are:
- United States
- United Kingdom
It is interesting to note that seven out of the top ten economies are from Europe. These include a number of small but well-run economies, such as Switzerland, Denmark and Finland. Singapore has a similar profile and is often dubbed the ‘Switzerland of Asia’.
Some of the largest economies in the world, however, such as China, France, Italy, Spain and Canada do not make the top ten list by competitiveness.
The Chinese economy still has many elements of state control and lacks some crucial legislative frameworks such as IP protection. France continues to be victimized by powerful unions while Italy has been called the ‘Sick Man of Europe’ after growth stalled in 1999. Spain is suffering from some fundamental economic problems such as its vast trade deficit, lower competitiveness and higher inflation.
Canada has made economic improvement one of its top priorities. It has benefited from global growth and the NAFTA free trade agreement, but maintained high levels of taxation and regulation, and hence has not made the list.
One of the major characteristics of the world’s top economies is the presence of organizations with sustained financial success. The quality of management at various levels has been high in all these countries, as has the level of education. There has also been a lot of innovation in the field of technology. All these factors have contributed substantially to the standings of the countries that are in the list of the top ten economies of the world. This is particularly true in the case of countries like Switzerland, Sweden, Finland, Denmark, and Singapore.