This may come as a surprise to many that UK has slipped down in the list of countries with the most competitive economy. At the same time, many might say “Yes, it was quite inevitable”. According to the World Economic Forum (WEF), UK’s biggest weakness lies in the area of budget deficit and educational system. For quite a while, UK was struggling with its fragile state of public finance and it was getting more difficult for farms to obtain proper loans. And so Britain has slipped to no. 10 position in an influential global competitiveness index where it has been overtaken by Sweden. The top three positions in this index are held by Switzerland, Singapore and USA respectively.
The WEF makes ranking of economies of all the countries in the world by evaluating more than 100 different indicators such as quality of infrastructures, the flexibility of labor markets and many more. But the deficiencies in these indicators were not however, the only reasons for this slip. It has also been said by Margareta Drzeniek-Hanouz, the WEF’s lead economist, that Both UK and Sweden made progress in the economic sector in the last 12 months. But Sweden’s progress was more significant than UK’s. Sweden really excelled in running sophisticated businesses by using latest and up to date techniques in marketing and other areas.
So now, the question is: why was the UK slow in its progress?
The entire macroeconomic environment of UK has been suffering for quite a while now. In terms of government debt and budget deficit, the country stands in 108th position out of 140 countries. This is surely causing problem in the local business environment, where a lot of entrepreneurs are being slowed down. Also, the quality of the current education system is nothing impressive at all. UK stands at 21st position in the world in terms of quality of education system.
Drzeniek-Hanouz also mentioned a few impressive things about UK’s economy. UK has a very strong scientific research capability which aids them in many economic activities. The quality of connection between the local businesses and universities is top notch. Here everyone is willing to lay a helping hand. In addition to that, UK’s economy is very friendly and open to the rest of world. These are some qualities that still make them a strong economic stronghold.
WEF also issued a warning about the decreasing health of the global economy as a whole. In this warning, it has stated that a trend of suppression in economic and production growth along with rising unemployment rate is making the world vulnerable to another protracted slump. So, WEF asked the countries to accelerate their economic progress.
Even with all the negative statistics, many officials of the Department for Business, Innovation and Skills think that UK is still one of best places to grow a business in. They proudly say that UK’s economy is accelerating faster than most other G7 nations and it is still one of the most attractive destinations for investment. They also stated that their focus is firmly fixed on rising productivity. And that the government will continue to act on the measures laid out by the Productivity Plan launched by business minister Sajid Javid.