14/06/2020
In releasing the Australian results of the IMD World Competitiveness Yearbook, CEDA Chief Economist Jarrod Ball said the results provide further evidence of the need for ambitious reforms if Australia’s economy is to emerge stronger after the coronavirus pandemic.
“A key factor influencing Australia’s competitiveness ranking is statistical data for 2019. One of the areas where Australia’s relative ranking fell sharply was economic performance, falling from 14 to 23,” he said.
“Across the other pillars of competitiveness, Australia dropped slightly compared to last year including government efficiency (down two places to 15) and infrastructure (down one place to 18). Australia’s ranking for business efficiency improved (up three places to 21) as did our ranking for technological infrastructure (up nine places to 18).
“Australia’s economy was already showing signs of weakness leading into the COVID crisis, with softer growth and underlying fundamentals.
“To date, Australia has taken effective action to manage COVID well compared to many countries.
“To revitalise a strong economic base and come back better post-COVID we need concerted actions to revive Australia’s underlying competitiveness and support investment and job creation.
“The positive from the pandemic is that Australian businesses and governments have demonstrated considerable agility including in the rapid adoption of new technologies.
“This shows Australia is capable of being a nimble economy, able to respond and adapt to changing economic circumstances.
“As we move beyond the immediate response to the pandemic, we must maintain that agility to lay the foundations for the next generation of economic development. This will ensure we have a globally competitive and dynamic economy.”
Mr Ball said the weak spots identified in the survey are already well known to business and policymakers in Australia.
“The results show the areas where we need to lift performance include the competitiveness of our tax regime, energy infrastructure, R&D culture, dynamism of the economy, entrepreneurship, apprenticeships and digital transformation in companies,” he said.
“While governments are rightly focused on the immediate need to support the economy and jobs in the face of a once in a century shock, it is clear that we will need to find new approaches to tackling enduring challenges on the other side of this crisis.”
In particular, he said we need to ensure the momentum for adoption of new technologies continues.
“Embedding greater knowledge and technology into Australian industry will require a major uplift in R&D and non-R&D innovation such as the application of software and embracing new global supply chains.
“Government and business also need to do a much better job leveraging their investments in technology and innovation.
“We know that regardless of size, from large to small, firms that invest in innovation outperform the rest in terms of revenue, job creation and resilience, so driving that investment in Australia is more important than ever.”
Mr Ball said the yearbook also shows that Australia cannot simply turn inward in the face of growing protectionism globally.
“As IMD notes, trade wars have damaged the competitiveness of the United States and China, with their rankings dropping to 10th and 20th places respectively,” he said.
“Australia must maintain open and competitive policy settings to attract the best companies, investment, people and ideas.
“This has long been a feature of Australia’s brand of economic development and will be vital for our economic recovery and rejuvenation.
“To support this, there is further work to do in resolving the long-term uncertainty faced in the energy sector, which is hindering investment, and we must have a broad and open national debate on improving our skills and tax systems.”
The rankings are part of the Switzerland based IMD’s 2020 World Competitiveness Yearbook, which compares and ranks 63 countries based on more than 340 business competitiveness criteria. Two thirds of the criteria are based on statistical indicators taken from 2019 results, and one third is based on a survey of more than 6000 international executives conducted in March/April this year. CEDA is the Australian partner for the yearbook.
Overall in the rankings Singapore retained the top ranking for the second year in a row, followed by Denmark, Switzerland, the Netherlands and Hong Kong. In the top 20, the countries that dropped the most were the US, dropping from three in 2019 to 10, and China, dropping from 14 to 20. The countries making the biggest gains in the top 20 were Denmark, Taiwan and Canada, gaining six, five and five places respectively to be ranked two, 11 and 13. Australia was ranked the fourth most competitive nation in the Asia Pacific region and fifth for countries with a population greater than 20 million.
2020 results
Livestream: Australia's competitiveness
CEDA is hosting a livestream on Thursday from 4pm to 5pm AEST to discuss the results and Australia's competitiveness in economic recovery with IMD Professor of Finance and Director, IMD World Competitiveness Centre, Professor Arturo Bris and Asialink Group CEO, Penny Burtt. Register here.
Media contact:
Roxanne Punton | Director, External Affairs | Mobile: 0409 532 287 | Email: roxanne.punton@ceda.com.au
About CEDA
CEDA – the Committee for Economic Development of Australia – is an independent, not-for-profit membership organisation. We identify policy issues that matter for Australia’s future and pursue solutions that deliver better economic, social and environmental outcomes for Australia.
CEDA's cross-sector membership spans every state and territory and includes 770 of Australia's leading businesses, community organisations, government departments and academic institutions.
CEDA was founded in 1960 by leading economist Sir Douglas Copland. His legacy of applying economic analysis to practical problems to aid the development of Australia continues to drive our work today.
About CEDA
CEDA – the Committee for Economic Development of Australia – is an independent, not-for-profit membership organisation.