Australia has made small gains in global competitiveness rankings but there is still a need for increased business sophistication and innovation, according to the latest World Economic Forum report on global competition.
The WEF’s Global Competitiveness Report 2015-16 was released yesterday and shows Australia has marginally improved its overall competitiveness this year compared to the past few years.
Australia is now ranked 21st in the global competition stakes, up one place from last year.
The report’s overall findings suggest most countries should focus on improving productivity to address global growth and unemployment issues.
While the Australia’s performance remains strong overall, it continues to lag behind the most advanced economies when it comes to innovation, according to the report.
“With global commodity prices set to remain low for the foreseeable future, along with the slowdown in China, the country must diversify further and move up the value chain,” the report said.
According to the WEF, Australia is ranked 23rd in the world for innovation, up two places from last year, and in 27th place overall for business sophistication.
It found Australia ranked 23rd in the world overall for innovation, was 25 and 27th overall for business sophistication, compared to 28th last year.
Alex Malley, chief executive of CPA Australia, told SmartCompany this morning the report is the latest in a “suite of similar reports”, which suggest there is a lot of room for improvement.
“There’s no comfort that we’ve moved up one place to 21st,” he says.
“All of the data from multiple sources reinforces the extent of Australia’s innovation and competitiveness challenge.”
Malley says the WEF report adds to last week’s Global Innovation Index, which ranked Australia 17th in the world.
“We’re being out-innovated not just by the usual suspects of the US and UK, but also competitor markets in our region like Hong Kong, Singapore and South Korea,” he says.
“New Zealand is rated as more innovative than Australia.”
Malley says the story is similar again when looking at the 2015 IMD World Competitiveness index, where Australia had dropped from 17th to 18th place this year.
“Sadly, we’ve be sliding on this index since 2010 when we ranked fifth,” he says.
“Hong Kong, Taiwan, Malaysia and New Zealand are all ranked higher than Australia.
For Malley, the pressure is now on Australian Prime Minister Malcolm Turnbull to start turning some of the findings around.
“The new prime minister has been at pains to draw a link between Australia’s future prosperity and our ability to leverage innovation to improve our country’s international competitiveness,” he says.
“The challenge is well and truly ahead for Mr Turnbull.”