Israel records small rise in IMD World Competitiveness Rankings

Israel is ranked 23rd among 64 developed countries, after coming 25th in 2022.

 Israeli Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich seen during a press conference, at the Prime Minister's office in Jerusalem, on January 25, 2023. (photo credit: YONATAN SINDEL/FLASH90)
Israeli Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich seen during a press conference, at the Prime Minister's office in Jerusalem, on January 25, 2023.
(photo credit: YONATAN SINDEL/FLASH90)

Israel has moved up two places in this year's World Competitiveness Rankings published by the Swiss-based International Institute for Management Development (IMD).

Israel is ranked 23rd among 64 developed countries, after coming 25th in 2022. This is still below the 21st place that Israel reached in 2018, but rather better than the 27th place it fell to in 2021.

IMD is one of the world's most highly-regarded economic research institutes. Once a year, it examines the competitiveness of 64 national economies under four headings: Economic Performance; Business Efficiency; Government Efficiency; and Infrastructure.

Just ahead of Israel in the current rankings is Germany in 22nd place. Israel is ahead of the UK (29th) and France (33rd), but well behind the US, which is in ninth place. Denmark leads the rankings for the second successive year. Ireland has leaped from 11th place last year to second this year, while last year's second-placed country, Switzerland, is now third.

Israeli government's efficiency, infrastructure deteriorated, IMD says

Israel improved substantially in the Economic Performance and Business Efficiency rankings this year but deteriorated in Government Efficiency and Infrastructure.

 The International Institute for Management Development in Lausanne, Switzerland (credit: VIA WIKIMEDIA COMMONS)
The International Institute for Management Development in Lausanne, Switzerland (credit: VIA WIKIMEDIA COMMONS)

The Federation of Israeli Chambers of Commerce, which represents IMD in Israel, giving more details of the assessment of Israel, says that the country came first for research and development as a proportion of GDP, as it did last year, while real economic growth was a positive factor, as was entrepreneurship, for which it is highly ranked. Other positive areas are a skilled workforce, the founding of startups, and use of Big Data.

Israel did less well in the rate of participation in the workforce, investment in communications and information infrastructure, and women in management positions. Even in some of these categories, for which Israel is ranked in the bottom third, there is an improvement over last year.

In listing the challenges that Israel needs to overcome in order to improve its position, IMD mentions areas familiar to Israelis that have also been mentioned in reports by the IMF and credit rating agencies: raising productivity, particularly in trade and services, reducing bureaucracy, raising infrastructure investment, and boosting competition and reducing prices in the food industry.

Federation of Israeli Chambers of Commerce Uriel Lynn said, "The report accurately and objectively reflects the changes in the structure of the economy in Israel, its strengths and weaknesses, and the improvement in its competitiveness on the world stage, thanks to the decisive contribution of exports of services.

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"These data should be a cornerstone of the thinking of all the economic ministers and of senior government officials who have not yet thoroughly internalized the changes in the structure of the economy and the decisive contribution of the trade and services sector to job creation, private sector product, and rising exports."