Swiss business school IMD ranks Israel in 19th place in its 2013 World Competitiveness Rankings of 60 countries, unchanged from 2012. IMD ranked Israel 24th in financial soundness, up 12 places from the year before..
The US took the top ranking from Hong Kong this year, and Switzerland rose to second place. Hong Kong, Sweden, Singapore and Norway are ranked 3rd through 6th place. Israel was behind the UK, Ireland and Australia, but ahead of China (21st place) Korea (22nd), and Japan (24th). In the Middle East, Israel was behind the United Arab Emirates (8th place) and Qatar (10th).
Israel is one of the countries with the best improvement in competitiveness since IMD unified its developed and emerging markets indices in 1997. China, Germany, Israel, Korea, Mexico, Poland, Sweden, Switzerland, and Taiwan all rose by at least five places in the rankings in 1997-2013.
The World Competitive Index is based on data collated by national business organizations. In Israel, IMD is represented by the Federation of Israeli Chambers of Commerce. The Chamber of Commerce's analysis of the index found that tighter regulation on Israel's business sector in the past three years pushed Israel down three places to 27th place in this category from 26th place in 2012 and 18th place in 2011. Israel is ranked 46th in the number of days needed to found a businesses, up from 54th place in 2012.
Israel is ranked 49th in the cost of living, up one place from the 2012 rankings, and Israel fell from 28th place in 2012 in productivity per employee per hour to 58th place in 2013.
Conversely, Israel is ranked first in monetary policy by its central bank, up from 5th place last year. Israel is also ranked first in cyber security, up from 19th place in 2012. Israel also leads in public investment in education, investment in R&D, business innovation, entrepreneurship, and the economy's stamina in crisis.
Chambers of Commerce president Uriel Lynn warned against the low participation in Israel's labor force and what he called "destructive" legislation against the business sector. "The unwillingness to open to competition and deal; with the cost of living are the key barriers to further economic development," he said.
IMD World Competitiveness Center director Prof. Stéphane Garelli said, "While the euro zone remains stalled, the robust comeback of the US to the top of the competitiveness rankings, and better news from Japan, have revived the austerity debate. Structural reforms are unavoidable, but growth remains a prerequisite for competitiveness. In addition, the harshness of austerity measures too often antagonizes the population. In the end, countries need to preserve social cohesion to deliver prosperity."
He concluded, "In the end, the golden rules of competitiveness are simple: manufacture, diversify, export, invest in infrastructure, educate, support SMEs, enforce fiscal discipline, and above all maintain social cohesion."
Published by Globes [online], Israel business news - www.globes-online.com - on May 30, 2013
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