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Economic slowdown costs State world top 10 ranking

Ireland drops five places to 12th in list of competitive countries

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Leader: Singapore retained top spot in the rankings. Photo: Lauryn Ishak/Bloomberg

Leader: Singapore retained top spot in the rankings. Photo: Lauryn Ishak/Bloomberg

Bloomberg

Leader: Singapore retained top spot in the rankings. Photo: Lauryn Ishak/Bloomberg

Ireland has dropped out of the top 10 ranking of most competitive countries, according to a new survey from a leading business school in Switzerland.

The State dropped five places to 12th spot in the IMD rankings and was the second biggest loser from the countries that had made up the top 10 in 2019, with only the US falling by a greater degree.

"The drop in Ireland's overall ranking is mainly due to a slowdown in its economic performance," said senior economist José Caballero.

Overall, Ireland also bucked a trend for smaller economies to perform better this year than last.

Singapore retained top spot while Denmark surged six places into second, with Switzerland, the Netherlands and Hong Kong rounding out the top five.

Denmark's rise was down to the country's strong economy, labour market and health and education systems.

The countries in the top five have also had greater success in battling the coronavirus pandemic, the IMD report noted. "The benefit of small economies in the current crisis comes from their ability to fight a pandemic and their economic competitiveness. In part, these may be fed by the fact that it is easy to find social consensus," it said.

Despite a high death rate and criticism of its fumbled response to the pandemic, as well as the imminent threat of Brexit without a European Union trade deal, Britain managed to rise in the IMD rankings to 19th place, up six spots.

Mr Caballero said Ireland's slide was also due to a drop in its appeal to highly skilled foreign staff.

The survey also showed negative opinions about management practices, for example the effective fulfilment of corporate boards' fiduciary duties.

The State is also weak on digital skills in the workforce, IMD said. That echoes criticism from the European Commission which noted "a relatively low percentage of the population has basic digital skills".

Many of the sectors of the economy which have been hit hardest by Covid-19 and are major employers, such as tourism, food and accommodation, are going to be among the last to reopen which means the workers in those industries are likely to be unemployed for a longer period of time.

The trade union-affiliated Nerin Economic Research Institute recently called for a new industrial policy focused on investment in education, research and development which targets high-tech to replace low-wage industries.

Irish Independent