UK drops most on competitiveness index, alongside France and Germany
ALBAWABA – The United Kingdom (UK) has dropped six places on the global economic competitiveness ranking, having lost $720 billion in potential investments opportunities, Bloomberg reported Tuesday
Leaders are losing confidence in the country, partly due to “government incompetence,” according to the International Institute for Management Development’s (IMD) annual World competitiveness index.
The UK dropped from the 23rd to 29th place, out of 64 countries included in the ranking.
In a separate analysis, the Institute for Public Policy Research (IPPR) warned that years of underinvestment cost the UK some $720 billion in green industry investments since 2005.
Business investment is lower in the UK than in any other Group of Seven (G7) country, according to The Guardian. UK also ranked 27th out of 30 member countries of the Organisation for Economic Co-operation and Development (OECD), ahead of only Poland, Luxembourg and Greece.
“The UK is experiencing a debilitating case of investment-phobia,” George Dibb told Bloomberg, associate director for economy at IPPR.
“The government’s aversion to investing to seize future opportunities is stopping us from getting out of the growth doom loop we find ourselves in,” he said.
In the competitiveness ranking, the UK lost ground on all the key indicators, Bloomberg underscored.
The New York-based news agency described this as a “worrying sign for the government, which wants to attract investment to boost growth.”
Respondents to the survey said the country had become more bureaucratic, the government less efficient and the workforce less productive.
Denmark came in first, again, in the 2023 index, with Ireland – which has jumped nine places – second, and Switzerland, the Netherlands and Singapore in the third, fourth and fifth places, respectively.
“The dramatic drop in the survey indicators suggest a systemic pessimism about the future,” Arturo Bris, lead researcher on the index and director of IMD’s World Competitiveness Centre, said in an interview.
“The deterioration in business sentiment says executives are losing confidence in the country,” he underlined.
More than 6,400 senior executives worldwide were interviewed for the global report. Just 3 percent of respondents said that government competency made the UK an attractive investment destination, according to Bloomberg.
“Government incompetence, poor workplace culture and restrictive immigration laws were among several reasons for the UK faring badly,” the report said.
The report also cited higher bureaucracy in the UK, despite the government’s pledge to use “Brexit freedoms” to cut regulation, as per Bloomberg.
The UK fell 12 places in the bureaucracy sub-ranking from 15th to 27th, while France climbed from 44th to 41st, Bris said.
The struggling economy, with inflation higher and the labor market tighter than other leading industrial nations, will have also affected sentiment badly, he added.
Meanwhile, France remained less attractive than the UK, dropping five places to 33rd in the rankings. Whereas Germany fell seven places to 22nd.
