Study: America Has the Most Competitive Large Economy on Earth

 
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From the Interactive Heatmap of the World Economic Forum’s Global Competitiveness Rankings.

We’re #3! In its latest report, the World Economic Forum  — the Davos people — ranks the US economy as the world’s third most competitive, behind Switzerland and Singapore. So actually the US is the most competitive large economy. From the report:

The United States retains 3rd place. Although many risks arguably loom on the horizon, the country’s recovery can build on improvements in institutions—government efficiency is rated higher than in previous years—its macroeconomic environment, and the soundness of its financial markets.

The United States’ major strength is its unique combination of exceptional innovation capacity (4th), large market size (2nd), and sophisticated businesses (4th). The country’s innovation capacity is driven by collaboration between firms and universities (2nd), human capital (4th on availability of scientists and engineers), and company spending on R&D (3rd). The United States also benefits from flexible labor markets (4th) and an overall well-developed financial sector (5th).

However, as accommodative monetary policy will slowly phase out and the US dollar has strengthened, the country will have to embark on a range of reforms to ensure that productivity growth picks up. These include improving the quality of education (18th), in particular at the primary level, and continuing to stabilize its macroeconomic environment (96th), which must include addressing high health and social security costs and ensuring continued strengthening of the financial system. Last but not least, further improvements to the institutional environment (28th) would put growth on a more sustainable footing.

So all the really big problems seem to be with government: poor schools, unfinanced entitlements, and inefficient Washington itself — shutdowns and debt ceiling crises. As for our innovation ranking, pretty good — though I would say the #4 ranking actually understates things. Too much emphasis on what government is doing vs. this.

Published in Economics
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  1. James Madison Member
    James Madison
    @JamesMadison

    Income equality guru Thomas Pikkety was quoted advocating the pouring of more money into fixing education yesterday in the Dr. Pethoukoukis’ feed about income inequality. It ties in with this. American education productivity is ranked 18th and yet, to improve income equality we need to invest in education per Thomas Pikkety. This confirms we are in an public education investment trap. We invest more, get less, so we invest more. It is called diminishing returns.

    The U.S is not #3 in innovation, we are #1. Size matters. We are #1 because if you have a good idea and you can get a student visa, get on a boat and later get a green card, you can come here, apply your talent and make it pay. Or, you can be free to conduct the research you want to do and someone else can make it may pay. Our secret is not ‘plowing the same fields with the same horses,’ our secret is our reception to high talent immigrants who in turn join high talent Americans to make high talent stuff happen.

    Our universities, our free market system, our capital markets, our clusters of technology, and our freedoms make this a very attractive place to live. We need swing these doors open and provide good tax policy and incentive to stay.

    In the meantime, we need to make schools – grade schools – efficient too with vouchers and free choice. That will bring them up to speed faster.

    Budgets and institutional issues begin to go away if economic growth surges and those defects can be worked around for a while longer until the next generation of smart immigrants and natives brew up another revolution of innovation.

    • #1
  2. Manny Coolidge
    Manny
    @Manny

    Personally I’m skeptical.  Our corporate income tax is one of the highest in the world.  If we were so great then how come we have a record unemployed?  There are studies and there are studies.  I don’t think this is worth the paper it’s printed on.

    • #2
  3. The Cloaked Gaijin Member
    The Cloaked Gaijin
    @TheCloakedGaijin

    3rd pillar: Macroeconomic environment

    The United States is ranked #96 behind Namibia, Armenia, Mauritius, Côte d’Ivoire, Ethiopia, France, Tajikistan, Montenegro, Kyrgyz Republic, Nigeria, Mali, Cameroon, India, Rwanda, Swaziland, and Mauritania, etc.

    The United States is ranked #129 in government debt as a percent of GDP.

    The United States is ranked #87 in gross national savings.

    The United States is ranked #1 in marketing.

    The United States is ranked #1 in available airline seats per size, more than twice #2 China.

    The United States is ranked #2 in university-industry collaboration, behind Finland.

    The United States is ranked #2 in latest available technologies, behind Finland.

    The United States is ranked #2 in availability to retain talented people, behind Switzerland.

    The United States is ranked #2 in capacity for innovation, behind Switzerland.

    The United States is ranked #2 in fewest tuberculosis cases per population, behind the United Arab Emirates.

    • #3
  4. John Penfold Member
    John Penfold
    @IWalton

    Anybody have trend data on start ups, new business, patents etc. per capita?  Small business relative to large, old relative to new?

    • #4
  5. Roadrunner Member
    Roadrunner
    @

    We are ranked #1 for providing jobs for illegal aliens.  Natives can go wherever they go when they fall off the unemployment rolls.  On top of this we have homosexual marriage and subsidized abortion.  We are a darwinian paradise.

    • #5
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