Ireland fails to achieve higher ranking in world competitiveness

Ireland is ranked 30th in the 2004 competitiveness table of 104 countries from the World Economic Forum. Ireland's position is unchanged from the previous year though well down from the 11th place recorded in 2001. Finland again tops the rankings with the US retaining its position in second place.

The decline over the past three years is related to performance in innovation and technology, according to the 2004 rankings published yesterday. "Despite substantial investment and improvement, other countries are progressing faster than Ireland here," it finds.

The rankings are drawn from the results of a survey of business executives, covering 8,700 managers in 104 countries. The Department of Economics in University College Cork undertook the survey in Ireland. It questions executives on issues such as the macroeconomic environment, the quality of public institutions and the level of innovation.

Looking specifically at business competitiveness, the report says that Ireland ranks 22nd, down one place from the previous year. "This is attributable to a decline in the rating for the sophistication of company operations and strategy," it says.

Specific weaknesses identified include control of international distribution, licensing of foreign technology and the extent of marketing. "Irish competitive disadvantages also include inadequate infrastructure, described as most problematic for doing business, centralisation of economic policymaking and the extent of locally based competitors," according to the report.

Appropriately, perhaps, for a competitiveness index, the World Economic Forum itself has a competitor in the form of the IMD in Lausanne, whose annual "World Competitiveness Report" shows Ireland in 2004 in 10th place out of 60 countries surveyed, with the US as number one. This report, published earlier this year, is based on a mixture of survey evidence and data.

The World Economic Forum report shows Finland in number one position for the third time in the last four years. It finds that "the country is well managed at a macroeconomic level, but it also scores very high in those measures that assess the quality of its public infrastructure," while also doing well on technological innovation. The US is ranked second, with overall technological supremacy partly offset by a weaker performance in the quality of its public institutions and in economic stability

The Nordic countries remain highly ranked, while the UK has moved up four places to 11th. Estonia in 20th place is clearly ahead of the other states that joined the EU this year while China is in 46th place, suffering from perceived weaknesses in institutions and regulation.