Special Report

The Best and Worst Economies in the World

Cologne, Germany
Source: Thinkstock

5. Germany
> 2015 GDP: $3.4 trillion
> Life expectancy: 80.8 years
> Gov’t debt as % of GDP: 71.0%
> Patent applications (per million residents): 219.1

Germany ranks fifth highest in competitiveness mostly due to its business practices and capacity for innovation. The country ranks among the world’s 10 best in all but one measure of business sophistication, including distribution control, production process sophistication, and local supplier quality. German companies are also some of the biggest spenders on R&D, and frequently collaborate with German universities.

The country ranks 10th in the world for its relatively direct relationship between employee pay and productivity. However, with the arrival of over a million refugees in 2015 alone, the German labor market will likely face considerable challenges in the near future. The long-term economic implications of the sudden population influx remain to be seen.

Tulip Fields, Netherlands
Source: Thinkstock

4. Netherlands
> 2015 GDP: $738.4 billion
> Life expectancy: 81.3 years
> Gov’t debt as % of GDP: 67.6%
> Patent applications (per million residents): 208.7

Situated between Belgium and Germany with considerable shoreline along the North Sea, Netherlands’ geographic location is ideal for international trade. With large advanced economies as neighbors and some of the world’s best transportation infrastructure — including ports that are second to none — the country’s 2014 exports of $525 billion were seventh highest in the world.

The country is also doing more than most to ensure younger generations are equipped for the future’s job market. The 99.6% primary school enrollment rate is the sixth highest in the world. The country is also notable for the quality of its higher education institutions. Math, science, and management schools in the Netherlands are each among the 10 best in the world.

New York City, New York
Source: Thinkstock

3. United States
> 2015 GDP: $17.9 trillion
> Life expectancy: 78.9 years
> Gov’t debt as % of GDP: 105.8%
> Patent applications (per million residents): 174.9

The U.S. economy is the largest in the world and the most competitive in North America. The United States’ R&D spending, capacity for innovation, and ability to retain talent, rank second in the world after only Switzerland.

Despite ranking third in the world for competitiveness, the U.S. economy has significant room for improvement in several areas. The United States does not rank among the 10 best countries in a variety of measures — health and primary education, property rights, and the public’s trust in politicians, for example, are each rated far worse than other countries on this list. Most glaringly, the country falls behind 73 other nations for wasteful government spending, and almost equally poorly in the toll crime and violence take on business.

Source: Thinkstock

2. Singapore
> 2015 GDP: $292.7 billion
> Life expectancy: 82.6 years
> Gov’t debt as % of GDP: 98.2%
> Patent applications (per million residents): 139.5

A small island nation in Southeast Asia, Singapore’s economy, while smaller than many, is the second most competitive in the world. The country’s economic strength comes from its effective government and legal institutions. The country ranks highest in public trust in politicians, government transparency, and efficiency in legal framework.

Singapore also excels in education and health standards, both important factors in economic prosperity. The country outranks all others in Internet access in schools and quality of math and science education, and it has a 100% primary school enrollment rate. Furthermore, at 82.6 years, Singapore has the sixth longest life expectancy at birth in the world.

Historic city of Zürich with river Limmat, Switzerland
Source: Thinkstock

1. Switzerland
> 2015 GDP: $664.6 billion
> Life expectancy: 82.8 years
> Gov’t debt as % of GDP: 45.6%
> Patent applications (per million residents): 313.5

For the eighth consecutive year, Switzerland ranks as the most competitive economy in the world. Reliable infrastructure and utilities are crucial to a thriving economy, and the quality of Switzerland’s overall infrastructure and electricity supply are the best in the world. While the country does especially well across nearly all measures considered, it is particularly outstanding for innovation. Swiss companies spend more on R&D than any other country, and Swiss research institutions, which are the best in the world, work closely with industry on R&D. Perhaps as a result, an average of 314 patents applications are filed per 1 million Swiss citizens, the third most worldwide.

The Swiss labor market is also the most efficient in the world. The country’s labor market has a more direct relationship between pay and productivity than any other country, and Switzerland’s ability to attract and retain talent is unmatched. With a GDP of $80,675 per capita, Switzerland is also one of the wealthiest countries on the planet.

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