For the second year in a row, Canada has ranked 14th overall in the World Economic Forum’s 2013-14 Global Competitiveness Report.
Overall, Switzerland was ranked the world’s most competitive economy, followed by Singapore in second and Finland in third place. Germany and the U.S. each moved up two spots to 4th and 5th, respectively, while Japan and the United Kingdom ranked 9th and 10th respectively.
Canada slipped ahead of Denmark this year, but could not move up the overall ranking, as Norway advanced four places from 15th to 11th this year. Taiwan and Qatar ranked 12th and 13th respectively.
The Conference Board of Canada says the nation’s lacklustre showing is due to underwhelming performance in areas such as innovation and business sophistication.
“When it comes to business innovation, Canada is seriously underperforming,” said Michael Bloom, the Conference Board of Canada’s VP of organizational effectiveness and learning. “Canada actually fell four places in factors related to innovation and business sophistication, and that’s a real concern. As a developed country, Canada’s economic competitiveness is largely innovation-driven.”
According to the Conference Board report, Canada’s competitive strengths including its primary and higher education systems, efficient labor market, and stable and efficient public institutions; nevertheless Canada is not taking enough advantage of this reality. The country fell three places in the ranking of institutional strengths from 11th in 2012 to 14th this year. It also dropped three places in its labor market efficiencies from fourth in 2012 to seventh this year.
In addition, the Board says Canada’s competitiveness could be enhanced by improvements to its innovation ecosystem through more firm-level spending on R&D, government purchasing and use of Canadian advanced technologies, and improving university-industry collaboration when it comes to R&D.
The report also noted that Canada’s ranking slipped from 9th in 2009 to 14th in 2012 and 2013; in overall innovation and business sophistication factors, Canada dropped four places to 25th in this year’s ranking; and the top two most problematic factors for doing business in Canada are access to financing and insufficient capacity to innovate.
Canada has highly-efficient goods, labor and financial markets, the report said, but trade barriers are limiting the effectiveness of these advantages.
For more on the report, click on this link.