A lot done, more to do on competitiveness

In what has been a mixed run-up to the local and European elections for the Government parties, the news that Ireland’s competitive position continues to improve will be welcomed.

The IMD World Competitiveness Yearbook ranks Ireland as the 15th most competitive of the 60 global economies in the study – two places higher than a year ago and a full nine places above its 2011 nadir.

With Europe’s slow recovery feeding through to an improved performance for EU member states, Ireland is the highest ranked of the EU’s “peripheral” economies, and one of three of those on the rise, along with Spain and Portugal. Italy and Greece continue to struggle.

While Ireland continues to rate highly on international investment and pro-business legislation, the study also highlights Irish executives’ bullish view of the country’s image abroad – with Ireland’s business types ranking alongside those from Singapore, South Korea, Chile and Qatar as among the most optimistic in this area, unlike those in the US and France.

It notes that such perceptions are longer-lasting than hard economic data and can lead to a “virtuous circle”, driving further improvements in competitiveness.

However, the data also points to areas where the Government can focus greater attention. This includes R&D. In a survey within the study where executives were asked to rank the five key attractive features of their economy from a list of 15, just 14.6 per cent cited a “strong R&D culture”.

That compares with our competitive tax regime, business-friendly environment, skilled workforce and high educational level, which were all selected by more than half of respondents.

Even more pointedly, access to financing was noted by just 4.2 per cent – just above “reliable infrastructure” and “competency of government” at 2.1 per cent each.

Quite what to make of the fact that not a single corporate executive selected the quality of corporate governance in Ireland as a key attractive feature of our economy has the potential for an interesting debate.

In any case, work clearly remains to be done before we pat ourselves too firmly on the back for our achievements.