Competitiveness rankings

By Felix Salmon
September 8, 2009
Global Competitiveness Report. There's lots of good, substantive analysis in the report each year, and each year everybody ignores 99% of it and concentrates solely on the rankings. Daniel Indiviglio has a pretty good write-up of the report, but he gets the headline stuff wrong:

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Another year, another silly fuss over the Davos Global Competitiveness Report. There’s lots of good, substantive analysis in the report each year, and each year everybody (I’m including myself here) ignores 99% of it and concentrates solely on the rankings. Daniel Indiviglio has a pretty good write-up of the report, but he gets the headline stuff wrong:

The rankings began in 2004, and this report marks the first time that the U.S. has fallen from the top spot — replaced by Switzerland, which was ranked second last year.

Actually, the rankings began in 2001; the methodology was then changed dramatically for the 2006-7 report. In which the United States came 6th. By that standard, 2nd place this year is perfectly respectable.

The fact is, of course, that one-dimensional rankings and league tables obscure much more than they illuminate, especially when they’re reliant on crazy two-decimal-places levels of specficity. (The US score of 5.61 in 2006-7, which was good for only 6th place, actually fell to 5.59 in 2009-10, where it was good for second place.) Let’s not get hung up on minuscule differences at the top of the table: it’s much more important to wonder what Uruguay (a/k/a “the Switzerland of Latin America”) is doing in 65th place, or why Croatia is 72nd, or why Argentina is 85th. Those are the countries to worry about and concentrate on.

Update: Lance says that the rankings go back at least to 1996, and he should know, he edited that report. But then there was a schism, and the war between the Global Competitiveness Report and the World Competitiveness Yearbook began. One must, I suppose, only expect competitiveness among competitiveness reports.

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