South Korea’s national competitiveness ranking climbed eight notches to its highest-ever 20th thanks to a leap in the country’s business efficiency, according to the 2024 IMD World Competitiveness Ranking (WCR) released on Tuesday.
The International Institute for Management Development (IMD) based in Switzerland has been releasing its annual World Competitiveness Ranking (WCR) for 36 years as a benchmark for the countries on the list to measure their progress and identify areas for improvement.
Asia’s fourth-largest economy came in 20th out of 67 countries this year. This is the highest ranking for Korea since 1997, when it joined the ranking for the first time. It ranked 28th last year.
Its ascent was driven by the country's improvement in corporate efficiency, which measures enterprises’ performances in terms of innovation, profitability and responsibility.
Screenshot captured from the 2024 IMD WCR country report Korea’s business efficiency ranked 23rd this year, 10 notches above last year’s ranking. Efficiency improved across the board, including in the areas of productivity & efficiency, labor market, finance, management practices and attitudes & values.
It also earned bigger points in the infrastructure field, which jumped five places to 11th over the same period. The country’s basic, technological, scientific and educational infrastructure improved, but not the health and environmental infrastructure.
RETREAT IN ECONOMIC PERFORMANCE AND GOVERNMENT EFFICIENCY
However, Korea’s economic performance backpedaled from 14th in 2023 to 16th in 2024 due to lower scores in the country’s international trade, international investment and price management.
Korea’s consumer prices rose 3.6% in 2023. That's lower than a 6.8% gain in the UK and 5.6% in Australia, but the Asian country’s housing rental prices and costs of living in major cities zoomed, keeping the country's inflation higher than before.
South Korea's WCR in details (Screenshot captured from 2024 IMD WCR report) The ranking of government efficiency, measuring the extent to which government policies are conducive to competitiveness, also declined from 38th to 39th over the same period, mainly due to a poor score in the government’s tax policy, meaning a higher tax burden.
SECOND IN THE 30-50 CLUB
Singapore is the most competitive economy, according to this year's IMD WCR.
Switzerland was second and Denmark third, while Ireland dropped to fourth. Hong Kong moved up two positions to take fifth place and Sweden advanced the same number of spots to take sixth.
The UAE climbed three places to seventh, and Taiwan dropped two places to eighth. The Netherlands fell to ninth, and Norway rose to tenth.
Among the 30-50 club members -- those with a population of over 50 million and a per capita gross national income above $30,000 -- Korea came in second after the US.
Still, Korea faces the challenges of how to maintain a competitive advantage in the high tech sector, secure the government’s financial stability, sustain supply chain stabilization and diversification, enhance its resilience to external economic shocks and continue efforts to stabilize inflation, Korea Institute for International Economic Policy (KIEP) said in the report.
The IMD WCR measures economies through population size and GDP on each end of the scale by using both statistics and real-world survey data.
