(photo credit: Bloomberg)
Israel is still the world’s top investor in R&D as a proportion of its gross
domestic product, and its central bank has the most positive impact on economic
development of any country, according to a study published Tuesday by Swiss
international business school IMD.
Israel ranked 17th overall in the
school’s global competitiveness rankings, which polled 59 mostly developed
countries. That ranking put Israel just ahead of Austria, (mainland) China and
the United Kingdom, but it would have placed even higher had it not been let
down by poor economic performance.
Hong Kong and the United States tied
for first, knocking third-placed Singapore from the top, while Sweden and
Switzerland rounded out the top five.
The study has been published
annually by the IMD World Competitiveness Center since 1989 and is considered a
leading indicator of countries’ economic competitiveness. It assesses countries
in four main categories: economic performance, government efficiency, business
efficiency and infrastructure, with its data based on a set of key criteria
combined with the results of a survey of top executives from each of the
Israel fared particularly well in the infrastructure category,
where it ranked first among all countries in the proportion of business
expenditure on R&D, proportion of total expenditure on R&D, scientific
research, informationtechnology skills, and public- and private- sector
Under the category of business efficiency, Israel ranked first
in entrepreneurship, flexibility and adaptability, and second for
venture-capital and attitudes toward globalization. But it finished a lowly No.
54 for workforce participation and also scored poorly for image
In government efficiency, Israel was ranked first for the role of
its central bank in economic development and second for investment incentives.
But that was offset by its last-place ranking for immigration
However, it was economic performance that really let Israel down,
thanks to poor data on employment (No. 52), the cost-of-living index (No. 49),
the relocation threat to its R&D facilities (No. 48) and export of goods
The Federation of Israeli Chambers of Commerce, which
represents IMD in the country, said although the results were overwhelmingly
positive, they show that Israel still faces many challenges, including a need to
downsize the public sector and bureaucracy, to lessen the burden on the business
sector and to increase workforce participation of minorities