U.S., Switzerland Face Pressure in Competitiveness SurveyPatrick Winters
The U.S. and Switzerland will face increasing pressure to keep their places at the top of a global competitiveness ranking, which they maintained for a second consecutive year, the organizer of the list said.
Executives surveyed in Switzerland and the U.S. were gloomier on the business image of their countries than counterparts in Singapore, Ireland and Germany, said Arturo Bris, a professor at the Lausanne-based IMD business school.
“The image of the country abroad as perceived by executives is quite important, because it may affect capital inflows to the country,” Bris, who is head of the IMD World Competitiveness Center, said in a phone interview. “In the long run, the perception will have a strong impact on competitiveness.”
The U.S. ranked 24th out of 60 according to how executives perceive the nation’s image overseas, and Switzerland was sixth. Ireland, Chile, Qatar and South Korea are all higher on this criterion than in the overall ranking. That’s an indicator that in future these countries could become more competitive, Bris said.
Earlier this week, Credit Suisse Group AG agreed to pay $2.6 billion in penalties for helping Americans dodge taxes as the U.S. seeks to clamp down on practices that brought investor cash to Switzerland.
Peter Brabeck-Letmathe, chairman of Vevey, Switzerland Nestle SA, last month cited “concern” about the outlook for the Swiss economy as a series of new measures, including one limiting immigration, may make doing business in the Alpine country more difficult.
One-third of the ranking is from a survey of 4,300 executives, with the remainder pulled from statistics such as gross domestic product and government spending on scientific research.
While the U.S.’s economic resilience, better employment and dominance in technology and infrastructure helped it to stay at the top of the IMD business school’s annual list, Singapore, Germany and Denmark increased their positions among the top 10. Singapore jumped 2 spots to third.
America’s jobless rate plunged in April to the lowest since the collapse of Lehman Brothers in 2008. That will help America stay at the top of the rankings in the near term, Bris said.
“The U.S. has very few weaknesses: it’s a very strong and big economy, has massive infrastructure,” he said. “And it’s a country that still dominates international trade.”
Switzerland is at risk of losing competitiveness after votes over the past 15 months that approved a proposal to curb the inflow of foreigners and backed an initiative to limit executive pay including severance packages.
“The average Swiss citizen is now not as receptive as in the past to corporations, to executives, to low corporate tax rates,” said Bris. “Singapore and Ireland use business-friendly regulation to attract a lot of business away from Switzerland.”