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Speaking Of: : COMPETITIVENESS

July 20, 1993|Times researcher KEVIN FOX

While much of America, including California, slogs through a recession, the nation has actually become more competitive on the world market, according to the 1993 World Competitiveness Report published by two institutes.

That's just one of the surprises in the report, which uses eight factors to rate 38 countries on their abilities to foster national and international enterprise. Another surprise came from asking business leaders to rate their own countries. New Zealanders grabbed the second place for confidence, just behind Denmark, and ahead of such industrial giants as Japan and the United States. These opinions counted heavily in each nation's competitiveness rating.

Overall, the United States rose from fifth to second place for competitiveness among advanced nations this year, just behind Japan. It was aided by the relative weakening of the Swiss and German economies and a rise in confidence of U.S. business executives, among other factors.

The most worrisome U.S. trend involved reduced ratings in educational structures and attitudes of the work force. The report notes that "any serious assessment of the nation's education system, budget deficit and social problems indicates that the United States faces long-term threats to its competitivity."

Sorting It Out

The Method

Here are the eight factors that the report views as critical to competitiveness. They are based on more than 300, criteria such as investment in equipment and housing, consumer price inflation, agricultural productivity, literacy levels and attitudes toward foreigners.

* Overall national economic strength. Japan was ranked first, the U.S. second.

* Internationalization (a country's participation in international trade and investment flows). Belgium and Luxembourg ranked first among industrialized countries, the U.S. fifth.

* Government (how conducive government policies are to competitiveness). New Zealand ranked first, the U.S. third.

* Finance (the performance of capital markets and quality of financial services). Switzerland ranked first, the U.S. fifth.

* Infrastructure (how well resources and systems serve the basic needs of business). Norway ranked first, the U.S. ninth.

* Management (innovation, profitability and responsibility of enterprise). Japan ranked first, the U.S. fifth.

* Science and technology (scientific and technological capacity and the success of basic and applied research). Japan ranked first, the U.S. second.

* People (availability and qualifications of the work force). Denmark was first, the U.S. 10th.

World Competitiveness Scoreboard

The Countries

The 1993 report focuses on 39 countries: 23 from the Organization for Economic Cooperation and Development (excluding Iceland) and 15 newly industrialized countries, selected based on their impact on world trade and the availability of statistics. It was published jointly by Swiss-based International Institute of Management Development and the World Economic Forum.

INDUSTRIALIZED COUNTRIES

Country 1993 Rank 1992 Rank 1989 rank Japan 1 1 1 United States 2 5 3 Denmark 4 12 Switzerland 4 3 2 Germany 5 2 5 Netherlands 6 6 7 Austria 7 7 15 New Zealand 8 15 17 Sweden 9 8 8 Belgium/Lux. 10 12 14 Canada 11 11 4 France 12 14 13 Ireland 13 9 16 Australia 14 16 10 Norway 15 17 9 Britain 16 13 11 Finland 17 10 6 Portugal 18 20 21 Spain 19 18 18 Italy 20 19 19 Turkey 21 21 20 Greece 22 22 22

Note: Belgium and Luxembourg are treated as a single economic unit in the report.

NEWLY INDUSTRIALIZED COUNTRIES

Country 1993 Rank 1992 Rank 1989 Rank Singapore 1 1 1 Hong Kong 2 3 2 Taiwan 3 2 3 Malaysia 4 4 5 Chile 5 NR NR Korea 6 5 4 Thailand 7 6 6 Mexico 8 7 10 Venezuela 9 9 NR Indonesia 10 10 9 South Africa 11 8 NR Hungary 12 13 NR India 13 11 7 Brazil 14 12 8 Pakistan 15 14 NR

NR: not ranked

Ask the Executives

The 1993 World Competitiveness Report includes results of surveys send to 10,300 business executives in 38 countries, of which 2,160 were returned by the end of March this year. In some instances, the executives rated their nation's competitiveness quite differently from what the hard data indicates.

For instance, the United States ranks second in overall competitiveness, but executives put it in 10th place. They cited concerns about an aging infrastructure and a declining worker quality.

The "confidence scale" at right shows how executives' self-assessment compares with the overall world scoreboard rankings. A high positive number might indicate an optimism that is not reflected in other objective data, whereas a high negative number might indicate unwarranted pessimism.

INDUSTRIALIZED COUNTRIES

Country Executive Rank Confidence Scale* Denmark 1 +2 New Zealand 2 +6 Germany 3 +2 Japan 4 -3 Netherlands 5 +1 Switzerland6 -2 Austria 7 same Sweden 8 +1 Belgium/Lux. 9 +1 United States 10 -8 Canada 11 same Ireland 12 +1 Australia 13 +1 Finland 14 +3 France 15 -3 Britain 16 same Norway 17 -2 Turkey 18 +3 Portugal 19 -1 Greece 20 +2 Spain 21 -2 Italy 22 -2

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