Economy

The Best Economies in the World

10. United Kingdom
> GCI score: 5.37
> GDP per capita: $38,589 (23rd highest)
> Debt as a pct. of GDP: 90.3% (13th highest)
> Pct. of residents using Internet: 87.0% (11th highest)
> Biggest problem in doing business: Access to financing

The United Kingdom, considered to be the eighth most competitive last year, has fallen by two places. The world’s eighth largest economy by GDP has some of the most efficient labor practices — the U.K. ranks fourth for its ability to attract talent and fifth in overall labor market efficiency. The quality of higher education and training in the U.K. is not groundbreaking, but the country has some of the best management schools and ranks among the top countries around the world in terms of Internet access in schools. The biggest obstacle to doing business is access to financing, overwhelmingly chosen by survey respondents — well above tax rates and government bureaucracy, both tied for the next most selected factor. During the financial crisis, Britain had to bail out two of the country’s largest banks, Royal Bank of Scotland and Lloyds Banking Group, which remain state-owned.

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9. Japan
> GCI score: 5.40
> GDP per capita: $46,736 (13th highest)
> Debt as a pct. of GDP: 237.9% (the highest)
> Pct. of residents using Internet: 79.1% (24th highest)
> Biggest problem in doing business: Tax rates

Japan received top marks for business sophistication due to an abundance of local suppliers, highly sophisticated production processes and its prominent role in the international distribution of goods and services. Companies in Japan — the fourth largest economy in the world — spent considerable amounts on research and development, ranking only behind first place Switzerland. Tax rates were reported to be the most problematic factor for doing business, according to the WEF’s survey. However, tax hikes may be on the horizon as part of the nation’s “Abenomics” plan, pushed by Prime Minister Shinzo Abe, to combine aggressive economic stimulus with structural reform.

8. Netherlands
> GCI score: 5.42
> GDP per capita: $46,142 (14th highest)
> Debt as a pct. of GDP: 71.7% (31st highest)
> Pct. of residents using Internet: 93.0% (4th highest)
> Biggest problem in doing business: Access to financing

Strong infrastructure, few reports of corruption and high-quality health and education systems have made the Netherlands a reliable trade partner and a competitive advanced economy. Port infrastructure in the Netherlands was ranked first out of all countries surveyed. When business leaders polled by the WEF’s Executive Opinion Survey were asked to select the most problematic factor for doing business, the most common reply was access to financing. According to the European Commission, applicants in the Netherlands were denied loans nearly twice as much as the European average, and when applications succeeded, lenders paid much higher interest rates than other EU countries. Financial market development was not the strongest economic indicator for the Netherlands, but the country still ranked 30th out of 148 countries in terms of the availability of financial services.

7. Hong Kong (SAR)
> GCI score: 5.47
> GDP per capita: $36,667 (25th highest)
> Debt as a pct. of GDP: 32.4% (42nd lowest)
> Pct. of residents using Internet: 72.8% (33rd highest)
> Biggest problem in doing business: Insufficient capacity to innovate

Hong Kong has the best infrastructure, according to the WEF, with the most consistent electricity and some of the best roads and rail networks in the world. The special administrative region of China is extremely healthy, reporting only 1.4 infant deaths per 1,000 live births, the lowest such rate in the world, and an average life expectancy at birth of 83.4 years, the highest in the world. Hong Kong also was judged to have the most developed financial market in the world. Financial services in the region are some of the most available and affordable in the world. Additionally, the pay received by workers in the city is widely held to be directly related to their productivity, a strong indicator of Hong Kong’s efficient labor market. Despite these reportedly high levels of convenience and economic freedom, residents of Hong Kong reported the greatest hindrance to doing business was an insufficient capacity to innovate.

6. Sweden
> GCI score: 5.48
> GDP per capita: $55,158 (8th highest)
> Debt as a pct. of GDP: 38.0% (62nd lowest)
> Pct. of residents using Internet: 94.0% (3rd highest)
> Biggest problem in doing business: Restrictive labor regulations

Sweden has fallen slightly on the competitiveness index in the past three years, from third in 2011 to sixth this year. However, the country still ranks first in technological readiness, the WEF’s measure of how nations incorporate existing technologies to improve efficiency, with Swedish companies absorbing new technologies better than those in any other country. People living in Sweden also are among those using the Internet the most, and mobile subscriptions there are among the highest in the world. Ericsson, a large Swedish telecommunications company, has remained relevant in a very competitive global wireless technology industry. In line with Sweden’s strong scores in technology categories, the country also had the highest concentration of patent applications of all other countries assessed in the WEF report, at nearly 303 per million residents.