The United States is the Most Competitive Economy in the World According to the Global Competitiveness Report, Launched Today by the World Economic Forum.

Business Editors

GENEVA, Switzerland--(BUSINESS WIRE)--Nov. 12, 2002

The United States is the most competitive economy in the world according to The Global Competitiveness Report 2002-2003 released by the World Economic Forum today.

Despite lingering concerns regarding the prospect of a war, the impact of corporate scandals, and the slow recovery from last year's recession, the World Economic Forum's Global Competitiveness Report indicates that the US economy has the best prospects for growth over the next five to eight years.

This year the United States swaps positions with Finland, last year's top-ranked country. The United States owes its high competitiveness mainly to its stellar performance in technology-related factors and a business environment that is conducive to entrepreneurship and risk taking. The US also scores well in its macroeconomic environment, although the country's low savings rate remains a matter of concern. The Report measures the comparative strengths and weaknesses of 80 national economies.

"The US economy has proven to be remarkably resilient and the fundamentals are in place for sustained growth in the US," said Peter Cornelius, Chief Economist of the World Economic Forum. "That the United States is ranked number one in both the Growth Competitiveness Index and the Microeconomic Competitiveness Index should not lead to complacency for to maintain this leading position, the country has to resolve outstanding reform issues, especially the need to improve its governance system, low savings rate and the ballooning trade deficit," he added.

Some other highlights of The Global Competitiveness Report 2002-2003 are:

- Japan is moving up in the competitiveness ranking. Despite

deterioration in its macroeconomic environment and public

institutions index rankings, Japan's position rises in the

overall Growth Competitiveness Index, with technological

innovation as the key driver.

- The rankings show significant strengthening of China and

India's competitive positions. Much of India's gains stem from

its performance in the technology and macroeconomic

environment indexes, while China derives much of its ascent

from gains in the public institutions index.

- Crisis countries, Argentina and Turkey, have experienced the

largest drop in this year's Growth Competitiveness Index

rankings. Future growth prospects of both countries look

particularly concerning because the declines were not only due

to lower macroeconomic environment scores; that both

countries' positions in the public institutions index also

dropped does not augur well for their prospects of immediate

recovery.

- There is a wide divergence of performance among the European

countries, with Sweden and Switzerland rising to the 4th and

5th positions from last year's rankings of 9th and 15th,

respectively; while France and Italy fall to 30th and 39th

positions from last year's rankings of 20th and 26th,

respectively.

The biggest changes have been experienced by Switzerland having climbed from 15th to 6th place in the Growth Competitiveness Index (GCI) thanks to a dramatic improvement of their technology. Turkey, on the other hand, has the worst performance in this year's Report slipping by 16 spots, dragged down primarily by a worsening performance in public institutions. Regarding technology performance, Israel shows surprisingly the greatest improvement going up 19 places from 26th to 7th, while New Zealand has experienced the hardest fall - 16 places. The worst performers in the macroeconomic environment were Brazil and Argentina, dropping 34 and 25 places respectively. India shows the best increase in macroeconomic performance along with the Russian Federation.

"In view of the fragility of global economic recovery, it is more important than ever to assess the growth prospects of countries," said Professor Klaus Schwab, Founder and President of the World Economic Forum. "For the recovery to be strengthened and sustained, obstacles to growth must be identified and overcome and, to this end, The Global Competitiveness Report is intended to be a benchmarking tool for policy-makers as they seek to improve the conditions of growth and competitiveness."

A more detailed version of this press release is available on our website at http://www.weforum.org/mediacentre General information on the Report can be found at http://www.weforum.org/gcr. Should you require country profiles or further specific information, please contact [e-mail] or [e-mail]. The World Economic Forum's Global Competitiveness Report 2002-2003 is published by Oxford University Press (http://www.oup-usa.com).

The World Economic Forum is an independent international organization committed to improving the state of the world. The Forum provides a collaborative framework for the world's leaders to address global issues, engaging particularly its corporate members in global citizenship. Incorporated as a foundation, and based in Geneva, Switzerland, the World Economic Forum is impartial and not-for-profit; it is tied to no political, partisan or national interests. The Forum has NGO consultative status with the Economic and Social Council of the United Nations. (http://www.weforum.org)