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U.S. Falls to 6th Place in Competitiveness Index

September 27, 2006|From the Associated Press

GENEVA — U.S. economic competitiveness has fallen significantly over the last year, as high budget and trade deficits hurt America's business environment, according to a report released Tuesday by the World Economic Forum.

The disappointing government response to Hurricane Katrina, government corruption and a decreasing worker talent pool due to immigration restrictions were other factors cited by the forum, which moved the U.S. to sixth in its "global competitiveness index" from the top spot a year ago.

"While strengths in the technological and market efficiency sectors explain the country's overall high rank, the U.S. economy suffers from striking weaknesses," the report said. "There is significant risk to both the country's overall competitiveness and, given the relative size of the U.S., the future of the global economy."

Switzerland topped the index, which was issued for the 27th consecutive year, but only the second year using a new formula, the forum said.

More than 11,000 business leaders in 125 countries took part in the survey, which found that Switzerland's institutional environment, infrastructure, efficient markets and high levels of innovation made it the most competitive business environment. It ranked fourth last year.

"The country has a well-developed infrastructure for scientific research, companies spend generously on [research and development], intellectual property protection is strong and the country's public institutions are transparent and stable," the forum said.

Nordic countries -- traditionally strong in the survey -- took the next three places, with Finland, Sweden and Denmark praised for their budget surpluses and low levels of public debt. The forum also lauded the high quality of education and social services in those countries. Singapore was fifth.

The forum, a nonprofit organization based in Geneva, claims no ties to any political or national interests.

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How they rank

The world's most competitive economies based on a survey of more than 11,000 business leaders in 125 countries by the World Economic Forum.

1. Switzerland (4th in 2005)

2. Finland (2)

3. Sweden (7)

4. Denmark (3)

5. Singapore (5)

6. United States (1)

7. Japan (10)

8. Germany (6)

9. Netherlands (11)

10. Britain (9)

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