New IMD ranking sees Australia lagging behind in entrepreneurship

The ranking suggests that the concentration of Australian exports remains an area of ​​vulnerability. Source: ake1150/Adobe.

This year, Australia has moved up three places in its competitive position after achieving its lowest ranking in 2021 in 25 years.

Australia was ranked 19th for competitiveness by the Institute for Management Development (IMD) and 61st for entrepreneurship, after one of its lowest scores in 30 years, the list has been compiled.

Denmark topped this year’s list of 63 countries (it came in 3rd last year), followed by Switzerland and Singapore in third place, according to metrics determining the nations’ prospects for future prosperity .

According to an independent think tank, the Committee for Economic Development Australia (CEDA), the pandemic recovery and Australia’s terms of trade were strong points that affected this year’s results.

CEDA CEO Melinda Cilento said “well-known” weaknesses in Australia’s political environment were preventing the country from being more competitive.

“Australia’s future competitiveness is not assured without upping our game in areas such as technology, energy, skills and training, entrepreneurship, taxation and productivity,” Cilento said.

“The ranking also suggests that Australia’s export concentration remains an area of ​​vulnerability. Australia needs to up its game on trade – diversify its trading partners and continue to create new markets for the goods and services in which we compete.

This year, Australia’s ranking also plummeted in terms of workplace productivity (falling from 20th to 41st place) and real GDP growth (ranking 44th).

Australia performed best in terms of credit rating, coming in first place, as well as universal health coverage (3rd place) and telecommunications investment (4th place).

“Australia’s terms of trade, driven by strong commodity prices, employment figures and the pandemic recovery, saved the day – ensuring our international competitiveness rankings improved and hasn’t gone down yet,” Cilento said.

“On the face of it, Australia’s short-term outlook is good, but the IMD stresses that the key pillars of competitiveness in a turbulent global environment are the institutional framework, infrastructure and education – areas where Australia must now make very deliberate policy choices to ensure future success.

IMD recognized Denmark’s ‘aggressive’ approach to sustainability as key to its strong performance in the European market. This has seen him consecutively increase his position in the rankings over the years, rising from 6th to first place over five years.

Marco Pistis, a research specialist at the World Competitiveness Center (WCC), said Denmark had improved its performance in government efficiency measures this year and achieved “remarkable” performance in trade efficiency. (1st), productivity and efficiency (1st) and management practices (1st).

“Denmark’s economic performance has increased sharply, and this is driven by increased investment flows into the country, contained price increases relative to other developed economies, and strengthening public finances with a reduction in the public debt and public deficit,” said Pistis. said.

COE director Professor Arturo Bris noted that the general trend in national economies was for inflationary pressures to have a greater impact on businesses.

“From an economic point of view, the pandemic seems over. The big worry is inflation, at least in Europe,” he said.

The biggest challenges national economies faced included different policies to deal with COVID-29 and Russia’s invasion of Ukraine.

“Overall, the challenges that have the greatest impact on the competitiveness of nations – to a greater or lesser degree – include different national policies to deal with COVID (a ‘zero tolerance COVID’ policy versus a ” evolution of COVID”) and Russia’s invasion of Ukraine,” added the center’s chief economist, Christos Cabolis.

In the WCC’s survey of Australian executives, inflationary pressures, geopolitical disputes and supply chain bottlenecks were the most significant trends impacting business this year.

This article was first published by Mandarin.

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