Ireland has jumped to seventh in the latest World Competitiveness Yearbook rankings, a rise of nine places and its best performance since 2000.

The index of 61 countries, compiled by the IMD business school in Lausanne, Switzerland, is acknowledged as one of the most reputable measures of global competitiveness.

The 2016 edition ranks Hong Kong first, Switzerland second and the US third, with Singapore, Sweden, Denmark, Ireland, the Netherlands, Norway and Canada completing the top 10.

Each country’s ranking is based on an analysis of over 340 criteria derived from four principal factors: economic performance, government efficiency, business efficiency and infrastructure. A survey of some 5,400 business executives is also taken into account.

Ireland’s rise in the rankings was linked to its economic performance, which was ranked 6th out of 61.

The State also scored strongly when it came to business efficiency, which covers areas such as productivity and labour market flexibility, coming second overall.

However, it scored worst when it came to infrastructure, where it was ranked 23rd overall. Within this subcategory, its ranking for basic infrastructure, which includes road and rail networks, was even worse at 40.

Highest position

Ireland’s highest position in the IMD’s competitiveness rankings was fifth, which it achieved in 2000. It fell to 24th position in 2011, only months after being forced into an international bailout.

This year’s rankings saw the US surrender its status as the world’s most competitive economy, a position it has for the last three years, to Hong Kong and Switzerland.

Prof Arturo Bris, director of the IMD World Competitiveness Center, said a consistent commitment to a favourable business environment was central to Hong Kong’s rise and that Switzerland’s small size and its emphasis on a commitment to quality have allowed it to react quickly to keep its economy on top.

“The USA still boasts the best economic performance in the world, but there are many other factors that we take into account when assessing competitiveness,” he said.

“The common pattern among all of the countries in the top 20 is their focus on business-friendly regulation, physical and intangible infrastructure and inclusive institutions.”

Anchored to the bottom of the overall rankings were Venezuela, Mongolia, Ukraine, Croatia, Brazil and Greece.

Future competitiveness

Prof Bris said one important fact that the ranking makes clear year after year is that current economic growth is by no means a guarantee of future competitiveness.

“Nations as different as China Mainland and Qatar fare very well in terms of economic performance, but they remain weak in other pillars such as government efficiency and infrastructure.”

Data gathered since the first ranking was published more than 25 years ago also lend weight to fears that the rich are getting richer and the poor poorer, underpinning the thesis propounded by French

“Since 1995 the world has become increasingly unequal in terms of income differences among countries, although the rate of increase is now slowing,” Prof Bris said.

“The wealth of the richest countries has grown every year except for the past two, while the poorer countries have seen some improvement in living conditions since the millennium,” he added.