08 Jul 2020

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• Edmund Tang

Australia’s competitiveness – a key metric for international investors – remains stable, according to an annual survey compiled by the Institute for Management Development (IMD). Based in Switzerland, the IMD is one of the world’s most prestigious business schools and its rankings are highly regarded.

The IMD’s World Competitiveness Yearbook 2020 shows Australia retained its 18^th spot this year, having gained three places since 2017. While a global 18^th spot appears moderate, Australia scores an impressive fourth place among countries in the Asia-Pacific region.

The IMD’s competitive rankings compare how countries compare across a range factors. These include openness to trade and investment, the state of labour markets, and the quality of infrastructure – such as bandwidth speeds and technology access.

Australia performed particularly well among medium-to-large countries. Omitting countries with populations of less than 20 million, Australia achieved a fifth-place global ranking – just behind Germany and ahead of UK.

The IMD rankings are typically stable. Over the last five years. Australia’s global ranking has fluctuated narrowly between 17^th and 21^st place.

High performance in Asia-Pacific

Australia’s performance within the Asia-Pacific region is particularly impressive. Compared to Australia’s 18^th place, South Korea ranked 23^rd, Malaysia 27^th, Thailand 29^th and Japan 34^th. Australia also outperformed the so-called BRICS grouping, with Brazil ranked 56^th, Russia 50^th, India 43^rd, China 20^th and South Africa 59^th.

The annual global survey suggests Australia has a number of strengths. Categories where Australia achieved a high global ranking include:

• 1^st, for ‘Country Credit Rating’ and ‘Mobile Broadband Subscribers’
• 2^nd, for ‘State Ownership of Enterprises’ and ‘Universal Health Care Coverage’
• 4^th, for ‘Investment in Telecommunications’
• 5^th, for ‘Justice’.

Australia’s workforce is also highly rated, gaining 6^th spot in two categories: ‘Finance Skills’; and ‘Human Development Index’.

Singapore retains pole position

Elsewhere, Singapore retained the world’s top ranking for the second year in a row. Hong Kong dropped from the second to fifth place, after being overtaken by Denmark, Switzerland and the Netherlands.

The 2020 results showed small countries performing particularly well. Denmark (2^nd) improved its position, on account of its labour market, and health and education systems. Switzerland (3^rd) owed its improved place to strong international trade and scientific infrastructure – as well as its health and education systems.

This year’s rankings also show a number of countries in Asia performing less well. The region's largest economy, China, fell six places from 14^th last year to 20^th this year. Malaysia, Thailand, Indonesia and Japan also saw their rankings slip. (See Table below).

IMD World Competitiveness Ranking, 2019 and 2020

Note: The rankings are part of the Switzerland based IMD’s World Competitiveness Yearbook 2020, which compares and ranks 63 countries based on more than 340 business competitiveness criteria. Two thirds of the criteria are based on statistical indicators taken from 2019 results, and one third is based on a survey of more than 6,000 international executives conducted in March/April this year. CEDA is the Australian partner for the yearbook.

Source: Institute for Management Development (IMD), World Competitiveness Rankings 2020