The World Economic Forum’s annual Global Competitiveness Report ranks the competitiveness of 134 countries. Competitiveness is measured using 114 indicators such as macroeconomic health, the quality of infrastructure, and labour market efficiency, which are derived from statistical analysis and survey data.
Economies with a better competitiveness ranking typically have a greater productive capacity, higher business investment, and higher economic growth rates.
In 2004 Australia was the 9th most competitive economy. Today it is the 21st.
Australia’s lack of economic competitiveness is making it a less attractive destination in which to invest. This is a key reason why business investment is currently lower as a percentage of GDP than during the Whitlam years. Low business investment is, in turn, reducing labour productivity and wages growth.
This paper concludes with recommendations to improve Australia’s competitiveness.
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(Originally published 24 October 2017)