ZURICH • The United States is back at the top of the global competitiveness league, said the World Economic Forum (WEF), which praised its entrepreneurial culture and financial system while noting its "weakening social fabric".
In a report that US President Donald Trump is likely to see as validating his "Make America Great Again" drive, the US placed ahead of Singapore and Germany in the 140-nation table.
The 2018 edition of the rankings used an overhauled methodology that focuses more on factors such as idea generation and agility.
Despite the US' top billing for the first time in almost a decade, the WEF - which brings together leaders from public and private sector institutions - took a swipe at the protectionism advocated by the Trump administration.
It said countries that ranked highly on measures such as low tariffs, ease of hiring foreign labour and collaboration in patent applications tended to do well on innovation and market efficiency.
"At a time of escalating trade tensions and a backlash against globalisation, the report also reveals the importance of openness for competitiveness," it said. "Global economic health would be positively impacted by a return to greater openness and integration."
US companies scored highly for the speed with which they embraced change, but the nation fared poorly on metrics such as health and security. It is "far from the frontier" on checks and balances, judicial independence and corruption.
Second-placed Singapore, which was third last year, put in a strong showing across the board, with a top 10 placement in seven areas, including its financial system and labour market. "Openness is the defining feature of this global trading hub and one of the main drivers of its economic success," the report said, noting that Singapore leads the pack for infrastructure.
Other areas that Singapore scored well in included health, due to a life expectancy of 74 years; and product market, which factors in trade tariffs and taxes. However, areas of improvement included innovation - for example, the filing of patents and research expenditure.
Switzerland, which long led the rankings, fell to fourth under the new methodology. China, a chief target of US criticism over trade, was 28th. Argentina, hit by a currency crisis, was lowest among the Group of 20 countries at 81st.
Famous for its annual meeting in the Swiss town of Davos that attracts members of the global elite such as German Chancellor Angela Merkel and rock star Bono, the WEF called for policies to address inequality. Steps are needed for income redistribution, investment in education and training, and social safety nets, as long as they do not hinder competitiveness.
"It is critical that policies be put in place to improve conditions of those adversely affected by globalisation within countries," according to the report. "It is possible to be pro-growth and inclusive at the same time."
BLOOMBERG
- Additional reporting by The Straits Times
