Nairobi — Switzerland, Finland and Sweden are the world's most competitive economies, according to The Global Competitiveness Report 2006-2007, released in Geneva last Tuesday by the World Economic Forum.

Denmark, Singapore, the US, Japan, Germany, the Netherlands and the UK complete the top 10 list, but the US shows the most pronounced drop, falling from first to sixth position.

"The top rankings of Switzerland and the Nordic countries show that good institutions and competent macroeconomic management, coupled with world-class educational attainment and a focus on technology and innovation, are a successful strategy for boosting competitiveness in an increasingly complex global economy. Business activity in these countries benefits from a well-developed institutional framework, characterised by the rule of law, an efficient judicial system and high levels of transparency and accountability within public institutions. Excellent infrastructure is an additional positive feature of the business environment.

"Our indicators point to the rapidly growing importance of higher education and training as engines of productivity growth," said Augusto Lopez-Claros, chief economist and director of the World Economic Forum's Global Competitiveness Network. "Countries that, like the Nordics, are investing heavily in education are likely to see rising levels of income per capita, growing success in reducing poverty and an increasing ability to establish a presence in the global economy."

The rankings are drawn from a combination of publicly available hard data and the results of the executive opinion survey, a comprehensive annual survey conducted by the World Economic Forum, together with its network of partner institutes (leading research institutes and business organisations) in the countries covered by the report. This year, over 11,000 business leaders were polled in 125 economies worldwide. The survey questionnaire is designed to capture a broad range of factors affecting an economy's business climate that are critical determinants of sustained economic growth.

The Forum annually delivers a comprehensive overview of the main strengths and weaknesses in a large number of countries, making it possible to identify key areas for policy formulation and reform.

This year marks an important progression in The Global Competitiveness Report's methodology, with the adoption of a new, more comprehensive tool to assess countries' competitiveness: the Global Competitiveness Index.

Developed for the World Economic Forum by Prof Xavier Sala-i-Martin of Columbia University, the new index Ðrepresenting two years of collaboration with him and feedback from a broad set of users - extends and deepens the concepts and ideas underpinning the earlier index used by the Forum.

"The introduction of the Global Competitiveness Index is a logical extension of the World Economic Forum's competitiveness work," said Lopez-Claros. "Changes in the global economy and the increasing complexity which characterise the business environment have made it necessary to develop an instrument that captures a larger set of factors affecting the evolution of economic growth. We are confident that this index, elegant in design and with a strong conceptual underpinning, will become an important tool for dialogue with policy-makers and the business community on the key drivers of productivity.

Klaus Schwab, founder and executive chairman of the World Economic Forum, said, "With the growing complexity of the global economy, the report is a contribution to enhancing our understanding of the key factors which determine economic growth and will help explain why some countries are much more successful than others in raising income levels and opportunities for their respective populations.

By providing detailed assessments of the economic conditions of nations worldwide, the report offers policy makers and business leaders an important tool in the formulation of improved economic policies and institutional reforms," he added.

Harvard Business School professor Michael E. Porter presents the results of the Business Competitiveness Index (BCI), an especially useful complement to the Global Competitiveness Index, with its emphasis on a range of company-specific factors conducive to improved efficiency and productivity, such as the sophistication of the operating practices and strategies of companies and the quality of the microeconomic business environment in which a nation's companies compete. Results of the BCI rankings are reported online at www.weforum.org /gcr.

The World Economic Forum continues to expand geographic coverage of The Global Competitiveness Report and with the current instalment featuring a total of 125 economies, this report is the most comprehensive of its type. This year, coverage has been expanded to Angola, Barbados, Burkina Faso, Burundi, Lesotho, Mauritania, Nepal, Suriname and Zambia.

This year's report features a number of country-specific boxes on Argentina, Brazil, France, Hungary, Israel, Japan, South Africa, Turkey and the US, providing an indepth analysis of the issues affecting national competitiveness.

Moreover, the report contains a number of external studies on pertinent issues related to global competitiveness and, more generally, themes which emanate from the World Economic Forum's concern with growth and development.

In addition, the report also includes an interview in which Lopez-Claros talks to Harvard professors Richard Cooper and Kenneth Rogoff about the ramifications of global imbalances.