As ranked by the World Economic Forum (WEF), the United States is once again the most competitive economy in the world – regaining the top spot for the first time since the 2008 financial crisis.
Coming in behind America were Singapore, Germany, Switzerland, and Japan. All five countries’ scores improved from 2017, with the largest increase going to Japan.
The WEF’s annual competitiveness report assessed 140 countries based on 98 social, political, and economic factors.
The United States scored 85.6 out of 100, coming in first in 3 of 12 categories: business dynamism, labor markets, and financial system. The US came in second place in market size and innovation.
“Economic recovery is well underway,” noted the report, but that recovery is “vulnerable to a range of risks and potential shocks” including trade frictions between China and the US.
The report’s authors also suggested the US was being held back by a “weakening social fabric,” worsening security, and a lack of technology penetration.
As noted in the report, the homicide rate in the US is about five times higher than the average for advanced economies. Healthy life expectancy is six years behind that of Singapore and Japan. The US also scored poorly on judicial independence and corruption.
This year’s report was adapted to account for the importance of digital technology as an economic driver in the modern era – a trend WEF refers to as “the Fourth Industrial Revolution.”
The WEF projected a 4% growth in the global economy in 2018 and 2019, but warned that the world is not ready for the digital age.
“I foresee a new global divide between countries who understand innovative transformations and those that don’t,” says WEF executive chairman Klaus Schwab. “Only those economies that recognize the importance of the Fourth Industrial Revolution will be able to expand opportunities for their people.”
The five least competitive economies were: Chad, Yemen, Haiti, Angola, and Burundi.