World Economic Forum 2013: A Post Crisis Davos

WEFAs the global economy begins to show signs of recovery, leading economic thinkers, heads of states, and major CEOs recently met in Davos, Switzerland for the annual World Economic Forum. These VIPs attended numerous events, networked, and traversed a new global economic landscape characterized by renewed optimism. The new disposition was reflected by this year’s theme—“resilient dynamism”—which represents an important shift in the perception of the world economy from something that is weathered to a force that can provide new opportunities.

While the outlook has become more hopeful, it does not mean that we are out of the woods just yet. As Axel A. Weber, Chairman of the Board of Directors of UBS, Switzerland, and a Meeting Co-Chair, declared, “The feeling is that the worst is behind us. But the mood bordered on complacency.” Not everything pointed towards the positive, especially the WEF’s own Global Risks 2013 report which offers a pessimistic outlook, saying the global community’s ability to address significant challenges, such as global warming, were limited by economic issues like “severe income disparity” and “chronic fiscal imbalances.” The report concludes that these systemic problems must be addressed in the near future in order to both sustain global economic growth and to avoid widespread social unrest.

On an interesting side note, the WEF, working with the science magazine Nature, noted several important but relatively remote potential economic threats known collectively as “X Risk Factors.” These include: Runaway Climate Change, Significant Cognitive Enhancement, Rogue Deployment of Geoengineering, Costs of Living Longer, and Discovery of Alien Life. While these issues are currently not as tangible as “concerns such as failed states, extreme weather events, famine, macroeconomic instability or armed conflict,” says the WEF, “they capture broad and vaguely understood issues that could be hatching grounds for potential future risks.” However, it is not unimaginable that we may confront many of these issues in the coming decades, and therefore, it is prudent to prepare for these prospective threats.

Overall, while Davos may often be thought of merely as a gathering of “fat cats in the snow,” it does have real worth both through its influence in setting the economic discourse and its role as a place for global leaders to reflect on global economic challenges.

Posted by: Matthew Goldberg

Sources: WEF, CNN, Business Insider, The Information Daily

Photo Credit: World Economic Forum 2013: Microphones courtesy of flickr user World Economic Forum

We’re the Biggest, but are we the Best? U.S. Global Competitiveness falls from 5th to 7th place

According to the newly released 2012 Global Competitiveness ranking by the World Economic Forum (WEF) the United States has fallen from 5th place to 7th place of 144 economies. This marks the fourth year of decline for the U.S., which last year fell from 4th to 5th place. The Geneva-based WEF cites the GDP to debt ratio, concerns over January’s upcoming “fiscal cliff”, institutional mistrust by the business community, and a lack of macroeconomic stability as the major reasons for the decline. Additionally, the nation’s 2011 credit downgrade by Standard & Poor from an AAA to AA+ is seen as a reflection of national struggles with these same issues which have also decreased its global competitiveness.

Jennifer Blanke, Chief Economist of the WEF, sought to explain in more detail this ranking, stating that there is “continuing concern about the macro-economic environment, continuing debt levels – the inability to get the spending under control and really political deadlock about how to even deal with this issue. And, this is leading to concern about political institutions in general.” Despite these causes of decreasing U.S. stature, economists do highlight the high score of the United States in innovation and productivity. According to the report, the United States is still considered a premier model for other world economies in these areas and has the potential to improve in all other sectors.

The WEF’s Global Competitiveness Report has been conducted annually for over 30 years and ranks national economies based on 12 influential pillars. Some of these factors include measuring and comparing infrastructure, innovation, technological readiness, higher education and training, and financial market development. Recently adjusted for social and environmental sustainability, the report created a measurement for the ease of citizens maximizing their potential to contribute to economic prosperity and a measurement for overall institutional efficiency in the management of resources.

Who ranks above and below the United States? Western Europe dominates the top 10: Switzerland, Singapore, and Finland round out the top three ranks, followed by Sweden, the Netherlands, and Germany, respectively. Other rankings of interest are Japan in 10th, China in 26th, and the rest of the BRIC emerging economies coming in with Brazil in 53rd, India in 55th, and Russia trailing in 66th place. Greece, weakening still, now ranks at 96th, and Yemen remains in last place at 144th.

As the United States remains the world’s largest economy we can hardly count out America as a major economic heavyweight and innovator. Still, the slip is seen by some as a serious concern, especially in tangent with the potential fiscal cliff coming in January. No matter who is elected in November, Washington certainly has economic policy changes to make to regain its stature as a top global competitor in the eyes of the World Economic Forum.

Posted by: Sophia Higgins

Sources: CNBC, World Economic Forum, the Hill, Outlook Series

Photo Source: no name @ Gates Foundation photostream courtesy of Flickr user Gates Foundation

US Drops a Spot in Competitiveness Rankings

According to the a recently released report from the World Economic Forum, the United States fell one position to claim 5th place in the world competitiveness rankings.  Some have attributed the US lag to its “economic vulnerabilities” as well as concerns regarding government inefficiency and trust in political actors.

Not all is bad on the competitiveness rankings front however.  The Economist Intelligence Unit recently found that the United States was the world leader in technology competitiveness.

Posted by: Carolyn Bantz

Sources: Business Software, Alliance, The New York Times, World Economic Forum

Photo Credit: World Economic Forum Annual Meeting Davos 2009 courtesy of flickr user World Economic Forum

US Broadband and International Competitiveness

The birthplace of the internet no longer boasts the best online infrastructure and, according to two recent studies, that fact is partially to blame for America’s slide in global competitiveness rankings.  The “Global Competitiveness Report 2010-2011” released in September by the World Economic Forum ranked the United States infrastructure, including online infrastructure, 23rd, contributing significantly to its drop from 2nd to 4th place.  A February McKinsey Global Institute study entitled Growth and renewal in the United States: Retooling America’s economic engine” likewise highlighted the need to develop a “21st century infrastructure” capable of handling the demand for information in a system that currently loses $450 billion in consumer purchasing power due to subpar internet connections.

The Obama administration has openly called to rectify these shortcomings by investing in the country’s broadband network, with the hope of extending high-speed access to 98% of Americans.  In a recent Washington D.C. forum on the economy, the Chairman of the FCC Julius Genachowski pointed out that “the costs of digital exclusion are rising,” and hoped that the federal government could aid the expansion of broadband in the same way it subsidized telephone access in rural parts of the country for earlier generations. Genachowski called his efforts the “blood and guts issues” of building an infrastructure base that supports economic growth.

Critics, however, question whether the administration’s wireless broadband plan is best for speeding up the country’s internet connections, and suggest that fiber networks are faster and more conducive to economic success.  Despite worries about its cost and effectiveness, skeptics such as Dan Mitchell, a vice president for the rural provider National Telecommunications Cooperative Association, still agreed that “broadly, they’re stating the right things, but the devil is always in the details.”

Posted by: John Coit

Sources: New York Times, McKinsey Global Institute, InternetNews.com, World Economic Forum, Business week, WhiteHouse.gov

Photo Credit: Something Yellow by Flickr user jakepjohnson

U.S. Fourth Most Competitive

The United States fell by two positions to fourth in the recently released World Economic Forum’s Global Competitiveness Index.  The report measures productivity and potential through the use of “twelve pillars of economic competitiveness” in order to formulate the rankings.  Switzerland, Sweden, and Singapore topped the chart, while the United States slipped largely due to low scores in government debt and savings.  China, meanwhile, jumped to 27th in the rankings, up from 29th last year.

While the United States dropped in the overall rankings, there were some bright spots to be found.  The U.S. scored high marks in the labor market, higher education, and infrastructure rankings.  More importantly, the United States ranked first overall in innovation.  Given the stresses the American economy has been under the past year, it is a reassuring sign that innovation remains a key strength.

Posted by: Michael Darden

Sources: The Guardian, Washington Post, World Economic Forum

Photo credit: Global Competitiveness Report 2010-2011 courtesy of flickr user World Economic Forum