The United States is falling from No. 1 to … where exactly? Well, this year, it's No. 6, according to the competitiveness index published by the World Economic Forum, an annual ranking of 125 countries that shows where the business climate is best and worst. Bumping us from the No. 1 spot was Switzerland, followed by three Scandinavian countries—Finland, Sweden, and Denmark—along with Singapore.
There's no shame in landing behind those five countries, which are generally small, homogeneous, and prosperous. All are highly wired nations, thanks to progressive government technology policies and cooperative geography. With relatively benign social and political challenges (and, in Singapore, a zero-tolerance policy regarding certain kinds of dissent), there are few major distractions like illegal immigration or a war on terror. And combined, all five nations spend less than $20 billion on defense—about 4 percent of what the world's policeman spends. We couldn't be Switzerland if we wanted to.
The thing to worry about is whether we will fall further. And behind whom? The report highlights a number of areas where the United States excels and will continue to: the quality of universities and grad schools, the availability of capital, open and transparent markets, and world-renowned innovation in Silicon Valley and other corners of the nation.
But a lot of things are not going right, as U.S. News and others have been hollering about lately. And these are long-term problems that become intractable the longer they go unaddressed.
Here are some of the "striking weaknesses" in the American Way, as the World Economic Forum sees them:
- Business leaders lack confidence in the integrity of public officials. U.S. rank: 24/125
- Inefficient use of public resources, i.e., tax dollars. U.S. rank: 27/125
- Health and primary education, including life expectancy, infant mortality, the incidence of HIV/AIDS, and overall healthcare spending. U.S. rank: 40/125
- The macroeconomic environment, "by far the greatest weakness in the United States." This includes a budget deficit in excess of 4 percent of GDP, skyrocketing public debt, record current-account deficits, and a savings rate that is one of the lowest in the industrialized world. U.S. rank: 69/125.
Here's another thing the report makes clear: Emerging behemoths like China and India are not as fearsome as many worriers suggest. Yes, they're becoming major players in the world economy, with increasing influence. But they're also riddled with problems that will thwart any rise to world domination. Education in China is still far behind the West, and technology is slow to spread throughout the country. China's ranking actually fell from 48 to 54 this year. India is becoming a great source of innovation, but as anybody who has been there knows, its infrastructure is terrible and poverty is widespread. Its ranking rose two notches this year, but only to No. 43.
Prolonged prosperity, in other words, is ours to seize or to forfeit. Can't we figure out better ways to get greater return for the trillion-plus we spend on healthcare? To spend more responsibly? To save more? Or do we need to fall to No. 16 … or 60 … before these are recognized as urgent priorities?