The U.S. is the most competitive economy in the world, according to the latest annual ranking by the World Economic Forum. It’s the first time since 2008 that the U.S. has topped the WEF’s list since before the financial crisis in 2008.
The WEF ranks 140 world economies according to 12 “pillars,” or factors that measure economic readiness. The U.S. scored at the top of three of the 12 pillars, including business dynamism (basically, entrepreneurialism), labor markets, and financial system. It ranked second in two others: innovation (behind Germany) and market size (behind China).
“But there were several areas which showed it still has more to do,” the report added, noting that the U.S. economy “drops behind other advanced economies in the health pillar, with a life expectancy of 67.7 years, putting it in 46th place. And it was far from the frontier for checks and balances (40th place), judicial independence (15th) and corruption (16th).”
Still, the U.S. surpassed Switzerland, which topped the list of most competitive economies in 2017. Switzerland fell to No. 4, with Singapore assuming the No. 2 slot and Germany coming in as the third most competitive economy.
The WEF has been benchmarking economic competitiveness for 40 years, based on the idea that economic growth helps drive human development. “There is overwhelming evidence that growth has been the most effective way to lift people out of poverty and improve their quality of life,” the report says.
While the global economy has been healthy, the report notes some challenges ahead: “After a lost decade, economic recovery is well underway, with the global economy projected to grow almost 4% in 2018 and 2019. But delivering growth is difficult even in the best of times, and today’s economic environment is increasingly uncertain, challenging and complex. Recovery remains vulnerable to a range of risks and potential shocks.”