On May 23rd, the IMD World Competitiveness Center launched the 30th edition of the IMD World Competitiveness Yearbook! The 2018 rankings found the USA back in the top position for the first time since 2015.
The return of the US to the first position, was accompanied with a usual question we receive in similar circumstances: Are newly elected governments the reason for competitiveness ranking improvements? The answer, in all cases, is “partially.” Let me explain.
The final ranking reflects the study of 258 criteria. These represent both hard data that are collected from international and national sources as well as soft data, that is, the responses we receive from our Executive Opinion Survey. The former is weighted twice as much as the latter.
The USA has always been in the top of the competitiveness ranking. Since 1997, US ranked first 16 times out of 22, and never below 4th. Thus, being in the top place is neither unfamiliar nor infrequent. Its strengths focus on two factors: economic performance and infrastructure. And in the current edition, these two factors were indeed the ones that were the highest ranked in the profile of the country.
Let me take this opportunity and use a clear example on how sometimes a trivial look of data may minimize the complexity of an issue and point towards inconsistent conclusions.
Some of the important dimensions of President Trump’s policies when he took office in January of 2017 were a decline of the dependency on imports and therefore, an improvement in the current account deficit, a decline in the unemployment rate and the resulting increase in GDP. Figure 1 includes the one year change for these four criteria. A casual observation sees a significant change from the year before, rendering the policy undertakings, let’s call them “Trumponomics”, a success.