Switzerland has the world's most competitive economy, according to a survey of 125 countries by the Geneva-based World Economic Forum (WEF).
It is the first time that the Swiss have taken the top spot in the WEF's annual Global Competitiveness Report, which was published on Tuesday.
"Switzerland's top ranking reflects a combination of a world-class capacity for innovation and the presence of a highly sophisticated business culture," said Augusto Lopez-Claros, chief economist of the WEF, in the report.
"The country has a well developed infrastructure for scientific research, with close collaboration between the leading research centres and industry."
The report highlights the fact that Swiss companies also spend generously on research and development and that protection of intellectual property is strong, spurring high levels of technological innovation.
"Business activity in the country benefits from a well-developed institutional framework, characterised by respect for the rule of law, an efficiently working judicial system, and high levels of transparency and accountability within public institutions," added Lopez-Claros.
"Flexible labour markets and excellent infrastructure facilities are two healthy features of the business environment."
Switzerland scored consistently well in almost all nine categories, ranging from market efficiency through to innovation. The Swiss dropped out of the top six in only two of them: health and primary education (29th) and macroeconomy (18th).
The country's total saw it climb from fourth place last year to the top spot, overtaking Finland and Sweden, and replacing the United States, which slipped into sixth place.
The annual rankings are drawn from a combination of publicly available data and the results of an annual survey conducted by the WEF together with partner research institutes and business organisations. This year, over 11,000 business leaders were polled in a record 125 economies worldwide.
Reacting to the WEF report, the Swiss Business Federation, economiesuisse, warned that Switzerland should not "rest on its laurels".
"One should not read too much into this ranking. It is one of a number of 'beauty contests' organised by different institutions, and two months ago the Swiss only made it into eighth place in a similar ranking published by Germany's Bertelsmann Foundation," said chief economist Rudolf Walser.
He added that these rankings only offered a snapshot of the economic situation and the most important thing was to stay at the top of the pile.
He said Switzerland needed to continue with its policy of reform to reduce federal budget deficits.
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Switzerland profited from a new method of calculating the annual competitiveness rankings, which was introduced by the WEF last year.
The Geneva-based body said the new index took account of changes in the global economy and the increasing complexity of the business environment.
Under the old system, Switzerland finished in only 8th position last year.
Global competitiveness rankings:
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