U.S. is now the world’s second most ‘competitive’ economy

The United States is now the second most competitive economy in the world, climbing to an eight-year high in global rankings, according to an analysis published Tuesday by the World Economic Forum.

The latest edition of the Global Competitiveness Report, an annual ranking of 137 countries based on data from international financial institutions, moved the U.S. up from the number three position to second place, just behind Switzerland.

Singapore, the Netherlands and Germany rounded out the top five spots.

“The strength of the United States comes from its performance in efficiency enhancers and innovation and sophistication factors,” wrote economists Klaus Schwab and Xavier Sala-i-Martín for the WEF, a Swiss group focused on promoting growth worldwide.

China crept up the rankings, as well, inching from 28 to 27, thanks to technological advances and reduced barriers to starting a business in the country.

India remained stable at 40th place but showed improvements in infrastructure and education, with more students connecting to the Internet, the report said.

The U.S. leads much of the world in higher education, job training, quality of companies, market size and technological capabilities. However, the country lags behind when scored for health and primary education, landing in 29th place, the report said. Australia, Canada, Belgium and Estonia all fared better in that department.

And the United States comes in at 83th place for its macroeconomic environment, down from 71st last year, the index shows - a reflection of continued slow growth since the Great Recession.

China, the world’s second largest economy after the U.S., received a ranking of 17th for its macroeconomic environment.

“Successfully meeting institutional challenges relating to both public and private institutions, improving the macroeconomic environment and investing in human capital - particularly in the areas of health and primary education - will be crucial for the United States to maintain its position near the top of the competitiveness rankings,” the authors wrote.

The U.S., along with other advanced economies, must continue to prepare for a coming wave of automation, which is expected to create a new crop of computer-related jobs while eliminating low-wage positions, the researchers pointed out.

The report is based on research and data from the World Bank, the United Nations and other international bodies. It also depends on feedback from a survey of more than 14,000 business leaders.