Ireland more competive than the UK, global report shows
Ireland has shot up a global ranking measuring competitiveness.
The country has surged from 16th place last year, to seventh now, according to the latest analysis from the Swiss-based IMD World Competitiveness Center.
Ireland is considerably ahead of the UK in 18th place, which flies in the face of criticisms made by businesses that Britain is a more competitive business environment, particularly around the tax offering.
But the IMD study takes into consideration a broad range of factors that include not only the tax environment, but also the health of the economy, regulation, petrol prices and electricity costs. It lists, as improvements on last year, the improvement in GDP and the government finances, finance and banking regulation and credit.
Issues of concern include exchange rate flexibility, the personal income tax rate, total expenditure on R&D, spending on education, and the number of women with degrees. IMD said it uses a mix of hard data, including information from global bodies such as the World Bank, OECD, and Irish authorities, and soft data, which is comprised of interviews with around 100 executives on average based in each country.
The executives were asked, from a list of 15 indicators, to list the five perceived as being the key attractiveness indicators for business.
At the top was the competitive tax regime, followed by the perceived high education level, the skilled workforce, business friendly environment and the dynamism of the economy.
But evidently businesses care very little about the competency of the government (as long as it's pro-business) as that ranks near the bottom of the list.
Professor Arturo Bris, director of the IMD World Competitiveness Center, said Ireland's ranking marks one of the best improvements in Europe.
"Ireland and the Netherlands have recorded the biggest jumps of any economy, while Sweden, Belgium, Spain and Italy are among those that also continue to improve," he said.
But he said Eastern European countries are also seeing strong improvements. The economies of Latvia, the Slovak Republic and Slovenia are among the fastest-improving in the world.
Each has bettered its 2015 position by six places - a rise beaten only by Ireland and the Netherlands - with Latvia moving to 37th, the Slovak Republic to 40th and Slovenia to 43rd.
By way of context, France occupies 32nd position, Spain 34th and Italy 35th.
"The common pattern among all of the countries in the top 20 is their focus on business-friendly regulation, physical and intangible infrastructure and inclusive institutions," Prof Bris said.
"These are qualities that many Eastern European economies are increasingly recognising and embracing, and a breakthrough into the top 20 might not be too far away."
The USA has surrendered its status as the world's most competitive economy after being overtaken by China Hong Kong and Switzerland. The IMD World Competitiveness Center, a research group within IMD business school, has published the ranking each year since 1989. The study reveals a marked decline in Asia's overall competitiveness since last year's ranking, with Hong Kong and Singapore bucking a wider trend of deterioration.
The likes of Taiwan, Malaysia, Korea Republic and Indonesia have all suffered significant falls from their 2015 positions, while mainland China only just managed to stay in the top 25.