Last year, Israel was ranked 22nd. The index contained 144 countries
Israel has dropped four places, to the 26th place, in the 2012-13 Global Competitiveness Index published by the World Economic Forum (WEF). The drop after Israel ranked 22nd last year, reversing the upside trend. This year's report examined 144 countries.
Switzerland tops the overall rankings in The Global Competitiveness Report 2011-2012. Singapore overtakes Sweden for second position. Northern and Western European countries dominate the top 10 with Sweden (3rd), Finland (4th), Germany (6th), the Netherlands (7th), Denmark (8th) and the United Kingdom (10th). Japan remains the second-ranked Asian economy at 9th place, despite falling three places since last year.
In a press release, the WEF says, "Israel falls by four places to 26 in this year’s GCI, reversing its upward trend of previous years. The country’s main strengths remain its world-class capacity for innovation (ranked 3rd), which rests on highly innovative businesses that benefit from the presence of the world’s best research institutions geared toward the needs of the business sector. Israel’s excellent innovation capacity, which is supported by the government’s public procurement policies, is reflected in the country’s high number of patents (ranked 4th). Its favorable financial environment, particularly evident in the ease of access to venture capital (3rd), has contributed to making Israel an innovation powerhouse."
The United States continues its decline for the third year in a row, falling one more place to fifth position. In addition to the macroeconomic vulnerabilities that continue to build, some aspects of the United States’ institutional environment continue to raise concern among business leaders, particularly related to low public trust in politicians and concerns about government inefficiency.
On a more positive note, banks and financial institutions are rebounding for the first time since the financial crisis and are assessed as somewhat sounder and more efficient.
Germany maintains a strong position within the Eurozone, although it goes down one position to sixth place, while the Netherlands (7th) improves by one position in the rankings, France drops three places to 18th, and Greece continues its downward trend to 90th. Competitiveness-enhancing reforms will play a key role in revitalizing growth in the region and tackling its key challenges, fiscal consolidation and persistent unemployment.
The WEF noted that In the responses to the "most problematic factors for doing business" in Israel, inefficient government bureaucracy topped the list, cited by 23.2% of respondents, followed by access to financing (13.9%), tax rates (11.5%), restrictive labor regulations (9.6%), and inadequate supply of infrastructure and inadequately educated workforce (6.5% each).
The results of the Global Competitiveness Index show that while competitiveness in advanced economies has stagnated over the past seven years, in many emerging markets it has improved, placing their growth on a more stable footing and mirroring the shift in economic activity from advanced to emerging economies.