The Republic of Ireland has dropped six places in a ranking of the world’s most competitive countries due to a number of challenges, including Brexit.
The fall comes as the US reclaimed first spotin the list, moving up three places to overtake Hong Kong, with its performance driven by its strength in economic performance and infrastructure.
The survey of 63 countries, compiled by the IMD business school in Lausanne, Switzerland, puts the Republic of Ireland in 12th place overall, after reaching sixth place in last year’s study.
While the fall in the rankings is seen as disappointing it is worth noting that the State is ranked third in the euro zone and fifth in the EU as a whole.
The Republic’s highest position in the rankings, achieved in 2000, was fifth. However, it fell to 24th position in 2011, only months after being forced into an international bailout. It had been steadily rising in the rankings in the years since, recording its second highest position last year.
The 2018 edition of the IMD survey, which is widely acknowledged as one of the most reputable barometers of international competitiveness, attributes the decline in Ireland’s ranking to a number of factors.
These include Brexit, changes to international trading, exchange rate volatility, monetary tightening by the European Central Bank (ECB) and infrastructure investment.
Each country’s ranking is based on an analysis of over 260 criteria derived from four principal factors: economic performance, government efficiency, business efficiency and infrastructure. A survey of more than 6,000 business executives was also taken into account.
Ireland’s economic performance score has declined from 4th to 11th place overall due largely to factors linked to a fast-growing economy. In terms of government efficiency, the State drops from 9th to 13th place overall.
Hard-won gains
The most worrying declines however are in the business efficiency and infrastructure subcategories, which were down from 3rd to 10th place and 19th to 21st place respectively.
IDA Ireland chief executive Martin Shanahan expressed disappointment at Ireland's drop in the list.
“Rankings do matter in the foreign direct investment (FDI)industry; it is disappointing that Ireland has fallen down the IMD rankings and we must stake steps to ensure that our offering to investors is as competitive as it can be,” he said.
Minister for Business, Enterprise and Innovation Heather Humphreys also expressed disappointment at Ireland's performance.
“After several years of improvement, the decline in Ireland’s overall ranking in this year’s IMD publication is disappointing. What it tells us is that we cannot become complacent about the hard-won gains of recent years,” she said.
The top five most competitive economies remain the same as the previous year but their order changes. The United States returns to first spot, followed by Hong Kong, Singapore, the Netherlands and Switzerland.
The remaining places in the top 10 are occupied largely by Nordic countries with Denmark, Norway and Sweden coming in 6th, 8th and 9th respectively. The United Arab Emirates (7th) and Canada (10th) close the top of the rankings.
