Special Report

The Best and Worst Economies in the World

The Most Competitive Economies

10. United Kingdom
> 2014 GDP:
$2.55 trillion
> Life expectancy: 81.0 years
> Gov’t debt as % of GDP: 89.5%
> Patent applications per 1 million people: 89.9

The United Kingdom is one of largest economies in the world and is a leader in many measures of innovation and efficiency. Home to Oxford University, University College of London, Cambridge, and other major institutions, the U.K. has the second best research universities in the world, second only to Switzerland. The U.K has potential to bring in outside investors, with the fourth best investor protection of any country. It also had the fourth best capacity to attract talented workers. Maintaining strong institutions and quality infrastructure often requires a great deal of investment, and like many other competitive nations, the UK has the means to borrow large sums of money. The country’s debt was equal to nearly 90% of its GDP, one of the highest general government debt levels worldwide.

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9. Sweden
> 2014 GDP:
$448.25 billion
> Life expectancy: 81.7 years
> Gov’t debt as % of GDP: 41.5%
> Patent applications per 1 million people: 312.5

Sweden ranks as the ninth most competitive economy in the world. Being technologically advanced is important to a nation’s competitiveness, and the Scandinavian nation is one of the most advanced in the world. For example, 92.5% of the country’s residents use the Internet, seventh-most in the world. The nation’s citizens and corporations were among the most likely to harness new technologies to improve efficiency. The country for availability of the newest technologies as well. Sweden is also one of the most innovative nations in the world. The country files an average of 312.5 patents per million residents, the third-most in the world.

8. Finland
> 2014 GDP:
$221.04 billion
> Life expectancy: 80.8 years
> Gov’t debt as % of GDP: 59.6%
> Patent applications per 1 million people: 294.0

Finland slid from fourth to eighth place in the GCI this year, partially due to declining economic conditions. Last year, Finland’s economy contracted for the third year in a row, largely due to a decrease in exports, particularly technology and paper. Despite the decline in trade, Finland remains one of the world’s most competitive nations with a strong foundation for sustainable long term growth. Finland’s institutions, for example, are the most transparent and protective in the world, and is superlative for its property rights, lack of organized crime, and ethical business practices. A prominent education system also accounts for Finland being one the most competitive world economies. Finland has provided the highest quality primary education in the world. In addition, Finnish students routinely perform among the best in the world on international standardized tests such as the Programme for International Student Assessment (PISA).

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7. Hong Kong SAR
> 2014 GDP:
$397.51 billion
> Life expectancy: 83.8 years
> Gov’t debt as % of GDP: 6.9%
> Patent applications per 1 million people: n/a

While Hong Kong is a territory of China, it is able to operate as a semi-independent nation. In fact, the territory is one of the most prosperous financial capitals in the world, and serves as a portal to international commerce and a hub of technological development. The nation’s current leader, CY Leung, is called the chief executive. So it is not surprising that Hong Kong rates as highly favorable to business. Hong Kong has one of the most favorable financial markets in the world, trailing only New Zealand in market efficiency.

Hong Kong also has the best infrastructure in the world. For example, its transportation system was rated among the best for ease of access and physical condition. It also has the best electricity and telephone networks in the world. No country has a higher rate of mobile telephone subscriptions, for example.

6. Japan
> 2014 GDP:
$4.75 trillion
> Life expectancy: 83.3 years
> Gov’t debt as % of GDP: 246.4%
> Patent applications per 1 million people: 334.9

Japan is home to one of the healthiest workforces in the world. Life expectancy for Japan’s 127.1 million residents exceeds 83 years, higher than in any of the other 10 most competitive nations.

After Switzerland, Japan ranks second globally in corporate spending on research and development. Japanese businesses are not the only entities investing in development. Most competitive nations have accumulated significant debt investing in public institutions and infrastructure. Partially due to the nation’s recent policy of government stimulus spending and quantitative easing to spur inflation, no country has accumulated more debt than Japan relative to its GDP. Japan’s debt is equivalent to 246.4% of its $4.75 trillion GDP. Heavy corporate and government investment may have bolstered national innovation. Japan applies for more patents per capita than any other nation, with an average of 334.9 patent applications per 1 million residents.

While Japan is a global leader by many measures, the Pacific island nation lags behind 82 other nations in female workforce participation.

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