Posted on 05/11/2007 7:12:48 PM PDT by WesternCulture
The results of the 2007 edition of IMD’s World Competitiveness Yearbook highlight a big shake-up in economic and business power. Emerging nations are quickly catching up in competitiveness. New companies and new brands are appearing all over the world. They now contest the long-standing competitive supremacy of industrialized nations. “This could lead to an increase in protectionist measures in Europe and the US”, says Professor Stéphane Garelli, Director of IMD’s World Competitiveness Center.
Of the 55 economies ranked by IMD, the US still ranks No. 1 in 2007, closely followed by Singapore and Hong Kong. However, 40 economies are now increasing or maintaining their competitiveness compared to the US – in other words, “closing the gap”. Only 15 are losing ground. For the first time, the ranking indicates not only the competitive position of nations in 2007 but also their ability to catch up with the leader (the US). These trends are based on past competitive performance, drawn from the world’s most comprehensive database on world competitiveness built up over two decades by IMD.
China, Russia, India, the Slovak Republic, Estonia, Sweden, Austria, Australia, Denmark, Switzerland and Hong Kong have displayed a strong improvement in their competitiveness performance in recent years. This does not imply that all of these nations are already at the top of the competitiveness league. However, they are catching up quickly. Such strong performances will obviously impact future rankings.
On the other hand, Indonesia, Italy, Argentina, Brazil, Mexico, Turkey, the Philippines and France have tended to lose ground compared to the top league. Despite some real and specific competitive advantages, these nations will, sooner or later, lose their standing in world competitiveness if they do not improve their overall performance.
Economic and business power is shifting to new countries: China, Russia and India have together stacked up more than $1,700bn in foreign currency reserves. Local companies from South-East Asia, India, China, Russia and the Gulf countries are buying industrial assets the world over.
In all likelihood, industrialized nations will find it hard to tolerate such a power shift. They will not accept the loss of some of their “business jewels” to newcomers without a fight. We shall thus face a year of rising protectionist measures. An increase in the number of complaints filed at the WTO for unfair practices can be expected.
But the new faces of protectionism will be subtler than in the past: corporate governance, environmental protection, intellectual property or social rights are the new key words. In 2007 and beyond, economic relations will be more tense than ever as emerging markets turn into emerging powers and challenge the established order for competitiveness.
(All quotes can be attributed to Professor Stéphane Garelli, IMD)
“The World Competitiveness Yearbook staff could use a little decaf”
- You’re probably right. Decaf is what made America great.
Until these countries have freedom for every citizen, they ain’t got sh!t on us.
“Until these countries have freedom for every citizen, they ain’t got sh!t on us.”
- I’ve heard there’s some traces of freedom left in Denmark.
They don’t bow down even to Islamofascists.
Some nations may have industries that perform particularly well as compared to the US, such as the French fashion industry, but the French have crushing taxes to support socialist spending schemes that may burden France far into the future even though its new president wants to cut them.
Sure HK has a higher level of economic freedom, but how much can you do on such little land area?
There is more venture capital activity in California, or even Texas for that matter than in the entirety of most European nations.
The US has the greatest rate of new business formation. For one of the reasons this isn’t going on in Germany, just try to fire a German worker and you will quickly find out why their unemployment rate is more than twice that in the US. (If things are so great in Germany, why is that rate so high?)
The personal tax burden heavily influences personal wealth. A country can have high earners who have high taxes. If government social spending is counted as personal spending (after all, it is the same, isn’t it??) then a country can appear to be “catching up” to the US on paper, yet by other metrics such as the size of the autos, the amount of living area, the type of foods consumed, the types of hobbies, the citizens could be substantially less prosperous on a personal level.
Also, there are limits to wealth, or shall I say that as people become more prosperous some will decide to divert their energies into activities that don’t bring in any extra income, and may cost a lot. I know a lot of people who make all they need to live on and devote their extra energy to charity. I know a nurse who spends a good fraction of her time working in a birthing clinic in a poor Caribbean country. When she runs low on money to support her there, she comes back to the midwest and picks up a nursing job for a few months. How much of this goes on in areas of the world that are “catching up” with the US? I know several doctors who do similarly. I know very wealthy auto dealers who spend more time managing their charities than they spend with their dealerships.
Not only is this living proof of US prosperity, and productivity, but it shows that keeping score by the “catching up” metric doesn’t tell the whole story about US prosperity. How many wealthy people from other countries take time for such work? At best, we see people acting like Bono- their “charity” is to lobby GSEs (Gov’t Sponsored Enterprises) like the UN and the World Bank to spend taxpayer money on the poor.
Wealthy Arab’s idea of charity is Hamas.
So, “catching up” to the US is a very nebulous concept, and subject to selective and biased definitions which conveniently support studies like this one.
Mercantilist crap.
It’s a lot easier to catch up when you steal and copy rather than innovate.
I wouldn’t say that decaf made America great. But whatever it was that made America great, there’s either less of it now or it’s spat upon and discouraged instead of lauded. And I don’t think that America ever had a monopoly on it to begin with.
I think that to a certain extent the U.S. might have been doing that to Britain in the early 19th century.
What it better lead to is more inspections of food imports. These damn 3d-world countries don't give a rat's a** what they put in food.
The US is impressive in many ways and I don’t wish to be disrespectful, but the US is hardly the wealthiest country in the world per capita and it is far from being the most productive one.
I live in Sweden and I have been to the US (Fla more precisely and I went to a lot of the parts that were labeled as ‘rich’). I wasn’t overly impressed with what I saw, although some people undeniably seemed well off.
Admittedly, this was in the early 1990’s, but since then Sweden and the US have enjoyed more or less the same levels of GDP growth. I doubt most people in Florida presently drive around in Beamers, Mercedes’s, Audi’s, Volvos’s and Cadillac’s.
I plan on going to the US this year or in 2008, but until then I’ll trust statistics, my own judgement and what I hear from other Swedes to a larger degree than claims from Internet users.
No offense. I just happen to know some basic things like:
- How Swedish wages compare to American ones
- What the average American car is (a Toyota Camry, alternatively a cheaper SUV like some basic Ford F-series version/a comparable Chevrolet or some North Korean SUV). In Sweden, the average car is a Volvo V70 and the average SUV is more like a Volvo XC90 or BMW X5. In most other countries, these cars are viewed as (at least close to) luxury cars.
- Few American families have as much living space as average Swedish families (Average Swedish families own TWO houses, one house in the city/community where they work and one ‘summer house’ (which often is smaller and not as well furnished as their main dwelling, on the other hand these summer residences often come with a rather nice leisure boat tied to the landing stage as many are located adjacent to water. An example of an AVERAGE ‘summer house’, financially speaking well in reach for most Swedish families: http://www.svenskfast.se/Pages/ObjectViewPictures.aspx?objectid=3D8ROQ9M0N0CQS2F )
- Swedes work considerably less than US Americans, still our standard of living is a little higher (I’m not saying much higher). This means we are more productive.
Am I preaching Socialism?
No way. Sweden is the most CAPITALIST country on earth if one looks at development of large, successful Capitalist companies in relation to population. Ericsson, Volvo (Volvo Car division was bought by Ford, which naturally doesn’t alter the origin of this part of The Volvo Group), IKEA and Absolut Vodka are not exactly the creations of stupid Swedish PC politicians and Swedish MSM.
Neither am I saying the US should try and become like Sweden/Scandinavia. The North American culture is different from and less homogenous than the Scandinavian one and if you’d let the most Europhile Liberals take over your country I’m sure your economy would suffer instead of prosper.
I wrote “..alternatively a cheaper SUV like some basic Ford F-series version/a comparable Chevrolet or some NORTH Korean SUV”
Naturally, SOUTH Korea was the country I had in mind.
I believe my geographical orientation was a little bit below par when I wrote that sentence.
Let’s blame Bush.
Let me say a few words about Hong Kong which are lost to outsiders.
The era of small government is effectively over now in HK, as Donald Tsang famously said a couple of years back that “Positive non-interventionism is over”. The buzz words are government assistance in alleviate poverty through government acts. Education wise HK is producing generations of idiots that those with good results and the children of senior-ranking officials and rich are sent abroad.
The government is talking about putting money on the film industry to help its plight, and there are talks of buying back private BOT infrastructures (such as WHC and EHC) raised. And socially the government’s hand is starting to stretch into every facets of citizens’ lives with things like Signs, Idiotic Government PR Clips, and Police prosecutions of public smokers etc.
The businessmen in power are not truly pro-free market. They are like barons in a rationed economy and wanting government to enact laws favourable to them. An engineer with 8 years of experience may work for a 60-hour week for, what, US$4,000 a month - even less than a lot of senior sales consultants with only Form 5 education. Those are the top grow fat out of a quasi-market structure.
This is against a backdrop that most people who campaign for liberal democracy for Hong Kong have social democratic leanings as well, caused by the territory’s businessmen unwilling to lend support to push “one-man, one-vote” to elect the CE and directly electing all members of the Legislative Council. My guess is that HK will become more social democratic as it democratizes which is not good news.
The nanny state is coming to Hong Kong, and I doubt it will bode well for the territory. And even the current state of Hong Kong is no paradise either.
I would bet if one were self employed or legally employed in America they would be better off than in Sweden.
It is a Globe of foolish idiots, who believe that America is great only because of money..... Thank God I am American.
Most people from every other country in the world, would sell out their country for $100 US, a hooker, and a bottle of vodka.... and yes I’m talking about Putin.
Excellent. Now can we stop all the foreign aid money we dole out annually and instead invest it in seeding private schools here in the US?
All of what you wrote is very interesting.
Thank you for the insights.
In most countries, HK is known to be very pro-capitalist and small government friendly, but maybe big changes are underway.
“How high are tax rates in Sweden?”
- Income tax: 28-30%, Corporate tax: low (varies a lot though, generally speaking, corporate taxes are easy to elude), Sales tax: 25% (there’s also a lot of extra taxes on things like gas, alcohol and tobacco)
“Do people have more assets in America and less taxable income”
- Swedes like to invest. A lot of us do so in rapidly growing Swedish corporations like H&M (a shooting star in the discount fashion business). Furthermore, many middle class families in Sweden own two houses, like pointed out above, so there’s no lack of ‘assets’. On the other hand, Swedes tend to save up rather small amounts of cash compared to people in other rich nations. One explanation is the generous welfare system. People are aware that whatever misfortunes they will confront, society will be there.
“How many undocumented aliens are in Sweden?”
- My personal guess would be they are something in the range of 50 000 - 100 000 (population of Sweden is 9.1 million)
“Can one live in Sweden with out being on Welfare or with out a job? How easy is it to start a business.”
- It’s difficult to get hold of money without either working or filling in applications for benefit, but of course there are alternatives..
Starting a business in Sweden is rather easy. One good thing about the Swedish tax system is that it favours investment and entrepreneuership. On the other hand, as soon as you want to move money out of your company for your own personal use, there will be problems.
“I would bet if one were self employed or legally employed in America they would be better off than in Sweden.”
- Could well be true, although I’d say the bigger your company grows, the more advantages there are with the Swedish system. Sweden substitutes the interests of big corporations on behalf of smaller ones. These matters are often discussed over here.
“Most people from every other country in the world, would sell out their country for $100 US, a hooker, and a bottle of vodka.... and yes I’m talking about Putin.”
- Have you just seen the ‘Borat’ film?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.