The WEF – organiser of the annual Davos gathering of business and movers and shakers – says the UK has moved up from 10th position in its global competitiveness league table, to eighth over the past 12 months, and is now "settling firmly back in the top 10".
In its annual Global Competitiveness Report, the WEF scores each country according to 12 "pillars of competitiveness", from the state of its infrastructure to the effectiveness of its health and education systems.
The UK's flexible labour market – making it easier for firms to hire and fire workers – is singled out as a strength by the WEF, which says "the country improves its performance in several areas, benefiting from clear strengths such as the efficiency of its labour market, in sharp contrast to the rigidity of those of many other countries".
The Treasury welcomed the WEF assessment: "The UK is becoming more competitive thanks to this government's reforms – creating more flexible and educated workforce; simplifying our tax system, and reducing the main rate of corporation tax as well as and scrapping burdensome regulation and simplifying planning rules."
However, the WEF points out that the UK's "macroeconomic environment" – the general health of the economy – remains weak, with the country ranking 110th in the world, down from 85th in 2011.
Economic growth in the UK has been negative for three successive quarters, according to the latest official statistics, and although Olympics-related spending is expected to have boosted output in the third quarter of the year, business groups including the CBI are now predicting growth in 2012 as a whole will be negative.
Switzerland, the WEF's home country, comes top of its Global Competitiveness Index, praised for its sophisticated scientific research; high-quality training for workers; and stable political institutions. Singapore, currently the country of choice for bankers fleeing the City for a lower-tax regime, comes in second. Finland is third.
The schism within the crisis-hit eurozone is also laid bare by the WEF's analysis, which ranks Germany as the world's sixth most competitive country, and France at number 21, while bailed-out Greece comes 96th, down six places from last year, and far behind Cambodia (85) or Kazakhstan (51).
The WEF's economists argue that the lack of competitiveness in southern European countries, including Greece, but also Portugal, Spain, Ireland and Italy, has been at the heart of the sovereign debt crisis. It calls for "a holistic set of competitiveness-enhancing measures", including "introducing labour market reforms, fostering competition, and making more and better investments in growth-enhancing areas such as education, technology and innovation".
Among the major emerging economies, China scores best, at 29th, while India is 59th, and Russia, where the Putin regime has been tightening its grip on the levers of economic power in recent months, 67th, down one place from last year.
However, the WEF expresses concern about the business climate in China, where it argues that "insufficient domestic and foreign competition is of particular concern, as the various barriers to entry appear to be more prevalent and more important than in previous years". China has dropped three places in the index since 2011.
guardian.co.uk © Guardian News and Media Limited 2010
image: © Groume