Australia slipped one place to 15 in the latest IMD World Digital Competitiveness Ranking (WDCR), with its key weaknesses remaining communications technology and business agility.
Australia’s performance continued to worsen on future readiness, ranking just 48 for agility of companies, down three places from last year.
Key strengths include the flow of international students, credit rating and broadband mobile subscribers, where it ranked one.
Australia has fallen for the second year in a row in an important global ranking of the digital competitiveness of 63 nations released for 2020.
Australia slipped one place to 15 in the IMD World Digital Competitiveness Ranking (WDCR), with its key weaknesses remaining communications technology and business agility.
Releasing the Australian results of the WDCR, CEDA Chief Executive Melinda Cilento said the report showed the nation had several key strengths, including the flow of international students, its country credit rating and broadband mobile subscribers, where it ranked one, and tablet possession, where it ranked four.
But Australia’s performance continued to worsen on future readiness, ranking just 48 for agility of companies, down three places from last year.
In technology, Australia’s communications technology ranking was still poor, at 51.
Another area for concern was the development of tech skills; Australia ranked 40 on digital/technological skills and remained at 53 on graduates in sciences.
Ambitious reforms needed
Australia has remained stagnant at 18 in global competitiveness rankings released in June 2020, highlighting a weakening economy pre-COVID and a need to focus on improvements in key areas such as tax, skills, digital transformation and energy infrastructure.
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.
Singapore leads the way
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, from three in 2019 to 10, and China, from 14 to 20.
The top 20 countries making the biggest gains 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.
© IMD World Competitiveness Center
Watch: Australia's competitiveness
IMD World Competitiveness Centre's Professor of Finance and Director, Arturo Bris, and Asialink Group CEO Penny Burtt discuss Australia's competitiveness in economic recovery with CEDA Chief Economist Jarrod Ball.
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About the survey
The rankings are part of the Switzerland-based IMD’s 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 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.