Brexit will undermine UK competitiveness, World Economic Forum report warns
Financial By Garry Polmateer | September 27, 2017
Brexit will “undermine” UK competitiveness, which has already faltered ahead of Britain’s divorce from the EU, the World Economic Forum (WEF) has.
The UK has dropped from seventh to eighth in an international ranking meant to measure each country’s individual competitiveness alongside its global peers.
It leaves Britain behind the likes of Switzerland, the US, Singapore, Germany and Hong Kong.
The latest WEF Global Competitiveness report explained that the UK’s demotion was partly the result of macroeconomic conditions but did not yet account for the effects of Brexit.
“This drop does not yet reflect the outcome of the Brexit negotiations, which is likely to further undermine the country’s competitiveness,” it warned.
“Its macroeconomic environment remains challenging… and could become an important constraint in the future as the timeline for a reduction of the fiscal deficit is repeatedly pushed back,” the report explained.
The UK was praised for its “technological readiness”, having ranked fourth overall, as well as the “sophistication” of its business sector, coming in at seventh.
An opinion survey in the WEF report listed tax regulation, policy instability and tax rates as the “most problematic factors” for doing business in the UK.
That was followed closely by issues including “inefficient government bureaucracy”, an “inadequately educated workforce,” and access to financing.
A Treasury spokesman defended the UK’s position, saying the report proved that the country is still “one of the best places in the world to do business” thanks to a “low corporate tax rate, a robust labour market and a thriving technology sector.”
“But we are not complacent, which is why we are building on this strength by investing £23 billion in infrastructure, technology and skills to deliver a more productive economy and higher living standards for people across the country,” the spokesman said.
The Competitiveness report widely criticised productivity levels across the globe, however, saying that policymakers have put the prospect of a sustained economic recovery at risk after failing to launch reforms that would increase international competitiveness.
Xavier Sala-i-Martin, a professor of economics at Columbia University and one of the report’s authors, said: “Countries must establish an environment that enables citizens and businesses to create, develop and implement new ideas that will allow them to progress and grow.
“The Global Competitiveness Report helps us understand the drivers of innovation and growth and this edition comes at a time when increasing the ability of countries to adopt innovations is critical to achieving broad-based growth and economic progress.”