The strong franc and corporate tax uncertainty have failed to dislodge Switzerland from second place in an annual ranking of the world’s most competitive economies. The alpine state was also judged by the Lausanne-based IMD business school to have the world’s eighth best digital capability.
For the second year in a row, Switzerland was only outclassed by Hong Kong in the 2017 IMD World Competitiveness Yearbookexternal link, released on Wednesday. The ranking of 63 nations is compiled by comparing relative strengths in 261 areas – from the economy to political stability, health, education and the environment.
Switzerland gained strong marks for solid governance, flexible labour laws and top-ranked education system and research capabilities. It scored poorly for being a high price island and the danger of production and services relocating abroad to escape the over-inflated national currency.
Switzerland has struggled to keep the franc in check since its central bank abandoned a peg with the euro in 2015. IMD also picked up on a public rejection of proposed corporate tax reforms, relatively high tariff barriers and the urgent need for welfare and pension reforms as weaknesses.
A survey of company executives found Switzerland was most valued for political stability, education, skilled workforce, reliable infrastructure and a competitive tax system.
For the first time since the report made its maiden appearance in 1989, IMD published a separate Digital Competitiveness scorecard. This tracks countries’ ability to adapt to the ongoing digital revolution in fields such as research, investment, infrastructure and security.
“Of paramount importance in the digital ranking are issues related to how adaptive and agile economies are when faced with technological change,” report author Arturo Bris said in a statement.
Switzerland rarely appears out of the top three countries in a range of reports measuring efficiency. It was ranked top place in the latest World Economic Forum Global Competitiveness Report last September.