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Finland, Germany, Sweden, Netherlands, these are not the
countries the Business Council on National Issues likes to hold up as models.
Note also that these academics see a rough landing for the Irish
miracle.
VM
Canada's competitiveness rating falls
again
Report lowers ranking to 7th from 5th last year
Toronto Star Economics Editor NEW YORK - Canada has lost ground as a competitive nation in the global economy, according to this year's Global Competitiveness Report, released here yesterday by the World Economic Forum. The Swiss-based organization produces two key indicators of competitiveness, and Canada's position on each has declined in the past two years, raising fresh questions as to whether Canada can maintain its current position in the global economy. The growth competitiveness ranking measures Canada's potential for future economic growth using per capita gross domestic product. It shows Canada in seventh place, compared with fifth place last year. The top-ranked state is the United States, followed by Singapore. The second measure, the current competitiveness index, measures whether Canada's existing level of economic performance can be maintained and support its current standard of living. Canada is in 11th place, compared with eighth place last year. Finland is in first place, followed by the United States. But like the United States and a small number of other countries, Canada is considered to be an ``overachiever'' because its current standard of living is higher than its current level of competitiveness warrants. The gap raises the question of whether Canada's living standards can be maintained. According to the report, which uses both a wide array of comparative statistics and surveys from business leaders in countries around the world, the advanced countries with the greatest potential in the next few years are Finland, Germany, New Zealand, the Netherlands, Sweden and Britain. Developing countries with potential include South Africa, Malaysia, Israel, India, Egypt, Turkey, China, Brazil and Thailand. Canada's North American free trade partner, Mexico, is not on the list. One country that faces a difficult future, according to Professor Michael Porter of the Harvard University Business School, is Ireland - a country that has been held up as a model for Canada by groups such as the Business Council on National Issues. Ireland's success has been based on importing technology, but this source of growth is running out, Porter said here yesterday in a briefing on the report. The country has poor infrastructure, a weak capacity in local science and technology, a weak stock market and relatively low Internet usage, he said. This year's report puts much greater emphasis on technology ``as a key driver of economic growth,'' Klaus Schwab, the Forum's president, says in its introduction. It also puts greater emphasis on countries' environmental performance, ``recognizing that the standards of living are inexorably tied to the quality of the natural environment.'' Canada is ranked lowest among the advanced economies on a key environmental measure, energy efficiency, and gets poor marks for technology and innovation. But it's in new measures of economic creativity, the source of future economic growth, that Canada's performance is most disappointing. These are based on a country's ability to be a centre of innovation, by developing new goods and services of its own, or to serve as a centre of technology diffusion, based on techniques developed by others. ``Mexico, Poland, Brazil, Luxembourg, Ireland, Canada and Singapore all score high on technology transfer but are around the middle regarding innovation,'' the report says. In contrast, the United States, Sweden, Finland, Germany, Israel, Japan, Switzerland and France do well on innovation, but not technology transfer. Canada ranks 15th in innovation, but fifth in technology transfer. It ranks 14th on the technology index, one of two parts of the report's creativity index. Canada ranks 17th on the startup index, the other component of the creativity index. This measures such things as ease of starting new businesses, access to venture capital and ease in obtaining loans with little collateral. Over-all, Canada ranks 15th in creativity. Canada fares reasonably well in the quality of its business environment, although here, too, it has slipped. Canada ranks eighth on this measure, compared with fourth last year and third in 1998. The measure reflects factors such as government programs for training, science, education and infrastructure, as well as the sophistication of the home market in demanding high-quality goods and services. This measure of Canada's ability to sustain its living standards shows it has fallen to 11th place this year, from eighth last year and sixth in 1998. Canadian companies are ranked 16th in sophistication, compared with 12th last year and 15th in 1998. This ranking is based on firms' skills and strategies to build and sustain competitive advantage at a level of productivity and innovation that can support high wages and profits. |
