Israel is on the doorstep of becoming one of the world's top-20 most competitive nations after advancing three spots to number 21 in the World Competitiveness Yearbook (WCY) for 2007.
The International Institute for Management Development annually ranks the world's top 55 most competitive nations based on four competitive factors, including economic performance, government efficiency, business efficiency and infrastructure.
"Our ranking is really a reflection of what is happening in Israel's economy," said Uriel Lynn, president of the Federation of Israeli Chambers of Commerce, in response to the release of the rankings Thursday. "Our economy has become more efficient, more innovative, more technological, more stable and more global, and this is why we continue to move up on this list."
Israel was 33rd in the category of economic performance, 25th in government efficiency, 16th in business efficiency and 14th in infrastructure.
According to the report, Israel's GDP, for the second consecutive year, has the largest percentage per capita devoted to r&d and the country also can boast of having the highest percentage per capita of skilled engineers employed in its work force, rising from fifth place in 2006.
Israel is ranked second in the amount of funds that were raised for start-up companies, rising from number six last year, and is also number two in the Information Technology sector, one spot above 2006's ranking. In the area of international investments, the country advanced 20 spots from 2006 to number 25 this year.
"Our economy has been excelling in many areas and this proves without a doubt that we belong among the world's leading economic nations," noted Lynn.
Despite these successes, however, the country is still ranked number 52 in the category of work force participation, and number 51 in the amount of available jobs, falling two spots from 2006.
The US topped the list followed by Singapore, which moved up one spot, swapping places with 2006's number two, Hong Kong, which is now number three. Rounding out the top five are Luxembourg in the fourth spot and Denmark.
Israel is ranked directly behind the UK and immediately in front of Estonia. Also following Israel in the rankings are Japan, France and Italy, while the only other Middle-eastern country among the top 55 was Jordan, which was placed in the number 37 spot.
"The WCY rankings are an expression of a nation's ability to create and maintain an environment that sustains the competitiveness of enterprises," wrote Suzanne Rosselet-McCauley, an official at the IMD, in explaining the methodology and principles used to analyze nations ranked in the WCY. "Nations need to provide an environment that has the most efficient structure, institutions and policies that encourage the competitiveness of enterprise."
The IMD cooperates with some 50 partner institutes in compiling the report, including Israel's Union of Trade Offices. The rankings are used by international businesses to determine investment plans, by government agencies to assess their policies against those of other countries and to evaluate performance over time, as well as by academics to better understand how nations compete in world markets.