In the last five years, many economies around the world went through a recession or had their growth stunted significantly due to the financial crisis. Although Europe seemed to have the worst economic effects from the crisis, the new 2012-2013 Global Competitive Index produced by the World Economic Forum reported that European economies are still the strongest economies in the world. Switzerland grabbed the top spot in the rankings, and Europe was well represented towards the top of the list.
The report used twelve pillars of competitiveness, which included institutions, infrastructure, micro-economic environment, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market development, technological readiness, market size, and business sophistication and innovation, which all contribute to an overall score out of seven. The top five strongest economies were Switzerland, Singapore, Finland, Germany, and the United States. The weakest economy was Chad.
What makes the Swiss economy so dominant? Its political stability and monetary security has drawn investors from all over, as well as its safe and clean environment Switzerland has maintained. With a small population and a low unemployment rate, Switzerland has a generally peaceful workforce. It is a very innovative country with top-notch scientific research institutions and strong labor market efficiency. Being dependent on exports for growth, the economy of Switzerland can mirror the economies of those that they trade with, such as European countries or the United States. The largest danger to the Swiss economy is likely to be over regulation on their banking industry that has been so successful. Do you see Switzerland remaining this strong in the future? How will Europe be able to stay strong while trying to escape the financial crisis?