2023 Global Competitive Rankings and the Changing Shape of Globalization

The 35th release of the annual World Competitiveness Ranking, published late June 2023 has delivered interesting results for global economies. In a time of unprecedented change and challenge, marked by another tumultuous year; the survey highlights the prowess of some of the world’s smaller yet more agile economies. Denmark remained in first place from 2022, Ireland made a remarkable leap from 11th to second place, and Switzerland remained in third. All three are small European economies, well positioned as open trade locations and global hubs.

In looking at the results, it’s hard not to notice the absence of larger European economies such as France, Germany, and the United Kingdom from the top 20 spots. Similarly, the United States ranked ninth this year, having held the lead from 1997 to 2009 and the top three until 2017. This signifies a changing reality for global titans whose economic, cultural, and regulatory landscapes influence global economic output.

This somewhat conflicting position of size and dexterity is summarized by WCC’s chief economist, Christos Cabolis, who explains that “navigating today’s unpredictable environment requires agility and adaptability. Countries that excel are building resilient economies, such as Ireland, Iceland, and Bahrain. Their governments can adapt policies based on current economic conditions in a timely fashion.” Against a backdrop of global uncertainty and geopolitical strife, these rankings are a valuable indicator of countries that offer stability, quality of life for their citizens, and happier workplaces.

In its most simple description, the ranking analyses a country’s ability to create and maintain an environment that sustains the competitiveness of enterprises. It assesses various factors under the headings of government, economics, business efficacy, and infrastructure. The last three years coined permacrisis have rattled these frameworks and traditional structures to their core. However, for countries like Denmark, Ireland, and Switzerland it is not the avoidance of challenges but the societal and workforce response. Here are some ways these countries have responded to global uncertainty and created a path of least resistance for a new era of employees that sets them apart globally.

The Power of Preventative Response

One of the last three years’ most transformative and accelerated events was the switch to hybrid and remote working models. The post-pandemic world of work was left grappling with a new sense of identity. For many, the topic of return to office has become a source of antagonism. Many employers are trying to figure out a path forward for organizations and staff, allowing continued flexibility yet reversing location control.

The response of governments in countries like Ireland, Denmark, and Switzerland to herald an intervention in national government strategy and create frameworks and policies for remote working is an example of government efficacy in action. In doing so, they have created a swift national response to a global challenge and a path for consistency in change. An example of this is the Irish government’s national strategy published in 2021, Making Remote Work’, a key objective to ensure that remote working is a permanent feature in the Irish workplace, maximizing economic, social, and environmental benefits. The subsequent government legislation of ‘Right to Request Remote Working Bill 2022’ provided the first legal framework for Irish employees to request remote work and for employers to approve or refuse them.

In setting out a stall for a fundamental shift in working models and ensuring an approach built on consistency and transparency, these countries demonstrate an acute level of efficacy and ability to respond in a way that creates stability.

The Offer of Stability Through Strife

Amongst the key economic measures of competitiveness is the ability to attract international investment and increase value creation for foreign-owned and domestic businesses. It is not surprising that all top three countries also scored high on foreign direct investment (FDI), with Ireland and Switzerland both European top 10 choice locations for global businesses. One of the most important factors in international location planning is stability, which is becoming increasingly harder to find in a world of continued turmoil. However, the top three countries have fostered a consistent regime related to taxation, human capital, and government policy.

This is against the backdrop of globalization which has been in crisis. Many countries have started leaning towards protectionist and nationalistic policies implementing restrictive changes to protect their citizens and interests. Contrary to this, countries like Ireland and Switzerland have maintained a relatively welcoming immigration and trade policy to attract foreign investors and create a human capital pipeline to support their growing FDI ecosystem. The message from these smaller economies is clear, we are open for business and a steady ship in times of strife.

The Currency of Calm

It seems an unlikely coincidence that Denmark, the world’s most competitive economy, is also one of the world’s happiest. The UN's World Happiness Report, 2023, puts Denmark second on its global national happiness ranking, with Ireland and Switzerland also appearing in the top 10. One of the key business efficacy ratings when considering a country’s competitiveness takes a gauge of the values and attitudes of its workforce and leaders.

There is a clear correlation between countries where political and societal unity takes precedence, to a reciprocal focus on the success of enterprises and organizations to create prosperity for their people. It is a lived ethos afforded by a lack of division at the political and economic levels. These countries tend to operate more centrist governmental regimes, unlike the polarizing political landscapes of larger countries, which can afford a certain level of daily serenity for their citizens and organizations.