Israel has moved up two places to number 23 on the IMD World Competitiveness Rankings. Denmark came in at number one. The US ranked in ninth place.
Overall, Israel’s performance in the IMD World Competitiveness Ranking 2023 was mixed. The country has some strong strengths, but it also has some areas where it could improve. If Israel can address these areas, it could further improve its competitiveness and become an even more attractive place to do business.
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Here are some specific areas where Israel could improve its performance:
Increase the rate of participation in the workforce. Israel’s labor force participation rate is relatively low, especially for women. This is a drag on the economy, as it means that there is less potential for economic growth.
Invest more in communications and information infrastructure. Israel’s communications and information infrastructure is not as developed as it could be. This is a barrier to innovation and economic growth.
Increase the number of women in management positions. Women are underrepresented in management positions in Israel. This is a missed opportunity, as women bring different perspectives and skills to the table.
The IMD World Competitiveness Yearbook (WCY), first published in 1989, is a comprehensive annual report and worldwide reference point on the competitiveness of countries. It provides benchmarking and trends, as well as statistics and survey data based on extensive research. It analyzes and ranks countries according to how they manage their competencies to achieve long-term value creation. An economy’s competitiveness cannot be reduced only to GDP and productivity because enterprises also have to cope with political, social and cultural dimensions. Governments, therefore, need to provide an environment characterized by efficient infrastructures, institutions, and policies that encourage sustainable value creation by enterprises.
The World Competitiveness Yearbook is a comprehensive report that provides an overview of the competitiveness of 63 economies. The ranking is based on 335 criteria, which are revised and updated regularly to reflect the latest economic and business trends. The criteria are grouped into four main pillars:
Institutional framework: This pillar assesses the quality of the institutions in a country, such as the legal system, the regulatory environment, and the quality of governance.
Factors for productivity: This pillar looks at the factors that contribute to productivity, such as the education system, the labor market, and the infrastructure.
Openness to trade and investment: This pillar assesses the openness of a country to trade and investment, as well as the level of competition in the economy.
Business efficiency: This pillar looks at the efficiency of businesses in a country, such as the level of innovation and the ability to adapt to change.
President of the Federation of Israeli Chambers of Commerce Uriel Lynn commented on the report saying that it “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. 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.”
