Israel rises to No. 22 in world competitiveness rankings

JP:  Israel rose two positions to a record No. 22 in the World Economic Forum’s 2011 Global Competitiveness Report, which was released Wednesday.

“Israel’s main strengths remain its world-class capacity for innovation (6th), which rests on highly innovative businesses that benefit from the presence of the world’s best research institutions, geared toward the needs of the business sector,” the report said.

“The excellent innovation capacity, which is additionally supported by the government’s public procurement policies, is reflected in the country’s high number of patents (4th),” it said. “Its favorable financial environment (10th), particularly the solid availability of venture capital (2nd), has further contributed to making Israel an innovation powerhouse; these elements have become stronger in the course of the past year.”

However, the report warned: “Challenges to maintaining and improving national competitiveness relate to the need for continued upgrading of institutions (33rd) and a renewed focus on raising the bar in terms of the quality of education. If not addressed, poor educational outcomes, in particular in the area of math and science (79th), could undermine the country’s innovation- driven competitiveness strategy over the longer term. As in previous years, the security situation remains fragile and imposes a high cost on business (74th).

“Room for improvement also remains with respect to the macroeconomic environment (53rd), where increased budgetary discipline with a view to reducing debt levels would help the country maintain stability and support economic growth going into the future.”

Switzerland topped the list of 139 countries, followed by Singapore, Sweden, Finland and the United States, which dropped one place to No. 5. Qatar (14th) and Saudi Arabia (17th) led the Middle Eastern nations, followed by Israel, the United Arab Emirates (27th), Oman (32nd) and Kuwait (34th).

The World Economic Forum bases its analysis on the Global Competitiveness Index, which defines competitiveness as the set of institutions, policies and factors that determine the level of productivity of a country.

That level of productivity, in turn, sets the level of prosperity that can be earned by an economy.