Monday 21 May 2018

Concerns remain as Ireland edges up the world rankings for competitiveness

Ireland is ranked the 8th most competitive country in the Eurozone
Ireland is ranked the 8th most competitive country in the Eurozone
Colm Kelpie

Colm Kelpie

Ireland has edged up one point in an influential global competitiveness ranking, but Irish businesses cite inadequate infrastructure as their biggest problem.

Ireland is ranked the 8th most competitive country in the Eurozone, lagging the Netherlands, Germany, France, Austria and Belgium among others.

It is the 11th most competitive in the European Union, according to the index from the Swiss-based World Economic Forum (WEF).

Overall, Ireland is in the 23rd spot out of 138 states - well behind key investment rival the UK which is in 7th place.

The National Competitiveness Council, Ireland's competitiveness watchdog, said that while our performance has improved, problems persist.

"[Ireland's performance] is still being negatively affected by macroeconomic legacy issues and threats to present and future competitiveness are evident in relation to infrastructure and access to finance."

The Council also points out that although there has been an improvement in Ireland's performance, the ranking in the WEF index depends, to a degree, on whether other countries improve or get worse.

The WEF also captures the opinions of Irish businesses and shows that inadequate infrastructure is by far the biggest concern for companies, followed by tax rates, access to finance, perceived inefficient bureaucracy, and insufficient capacity to innovate.

And it slips in the rankings compared with last year in terms of infrastructure, and financial markets. But it improves greatly in terms of the macro environment, although the latter remains well down the list in 43rd place.

"Ireland's infrastructure ranking is primarily a result of poor perception-based scores on the quality of infrastructure," the NCC said.

"The mid-term review of the Capital Plan is of particular importance in this regard.

"Ireland's poor ranking in relation to financial market development remains a concern. Ireland performs particularly poorly in terms of the affordability of financial services (81st), ease of access to loans (91st), and soundness of banks (111th)."

Ireland performs well in relation to goods market efficiency, labour market efficiency, technological readiness, health and primary education, and higher education training.

"Within these headings, a range of strengths are evident - Ireland is ranked in the top 10 in relation to intellectual property, investor protection, quality of the education system, FDI rules, regulation around exporting, and productivity levels."

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