Belgium has dropped to 21st place in the annual competitiveness ranking of the World Economic Forum (WEF), one place lower than in the previous edition, when it was already declining. Yet Belgium ranks first in terms of macro-economic stability, but loses points related to Information and Communications Technology (ICT) and the labour market.
The WEF lists annually some 140 countries according to competitiveness. Various parameters are taken into account: safety, health, government efficiency, infrastructure, tax climate, education, etc. Belgium has been between places 15 and 20 in recent years. This year, the methodology was revised, based on “the rapid transformation of the world economy as a result of the fourth industrial revolution.”
According to the WEF, the world economy is not fully prepared for the fourth industrial revolution, with most countries lacking innovative capacity.
The absolute top countries in terms of competitiveness are the United States, Singapore and Germany. Switzerland, which was the leader in the previous edition, is now in fourth place. Japan was rated the fifth most competetive economy. The Netherlands dropped from fourth to sixth place. Honk Kong is in seventh place followed by the United Kingdom, which remains eighth, and Sweden and Denmark, which round out the top 10. France made an impressive jump risen from 22nd to 17th place.
Belgium is losing points particularly in ICT and the labour market. In more detail, Belgium does not score well for, among other things, “terrorist incidence”, government regulation, quality of roads, efficiency of train services, complexity of taxes, tax on labour and attitude towards entrepreneurial risk.
The WEF emphasises that in a time of increasing trade tensions, openness can boost competitiveness. It also calls on governments to adopt policies that are pro-growth and pro-inclusion.
And while low and middle-income economies can leverage technology to jumpstart growth, the report emphasises the importance of “old” developmental pillars, such as governance, infrastructure and skills.
Worryingly, of the 140 economies surveyed, 117 still lagged behind for quality of institutions, which impacted their overall competitiveness.
There was also widespread weakness at mastering the innovation process, with 103 countries scoring lower than 50 when it comes to following through from idea generation to commercial product.
Explaining the new approach to measuring competitiveness, Thierry Geiger, Head, Research and Regional Impact, Future of Economic Progress at the World Economic Forum, said:
“Productivity is the single most important driver of growth in 2018. With the Fourth Industrial Revolution in full swing, there is a need to rethink the drivers of competitiveness and therefore of long-term growth.
Those new drivers include adaptability and agility of all stakeholders, including the governments. To what extent are they able to embrace change and adapt to change and upgrade their economies?”
The Brussels Times