Forbes has published a list of the best countries to do business in. Their analysis was based on a number of factors including;
- degree of personal freedoms
- free and fair elections
- freedom of expression and organization
- investor protection
- low levels corruption
- support of free trade and low inflation
It’s always interesting seeing these sorts of studies – generally the results tend to be a little random. What IS interesting is the regularity with which small countries tend to show up near the top of the rankings. From Ireland to the Scandinavian nations to Israel to Australasia. I wonder if them “punching above their weight” has something to do with being small, egalitarian and more in tune with the realities of their nation as a whole? This year it was Denmark’s turn to shine – interesting that 70% of the top 20 countries were around, or under, 10 million population.
It would be interesting to see this data analysed alongside industry types prevalent in the individual countries – which nations embrace the “new economy” and which are low value add price takers.
| Rank | Name | GDP Growth (%) | GDP/Capita ($) | Trade Balance ($bil) | Population (mil) |
Unemployment (%) |
| 1 | Denmark | 1.7 | 37,400 | 4.7 | 5.5 | 3.5 |
| 2 | Ireland | 5.3 | 45,600 | -12.6 | 4.2 | 5.0 |
| 3 | Finland | 4.4 | 35,500 | 11.2 | 5.2 | 6.9 |
| 4 | United States | 2.2 | 46,000 | -747.1 | 303.8 | 4.6 |
| 5 | United Kingdom | 2.9 | 35,300 | -111.0 | 60.9 | 5.4 |
| 6 | Sweden | 3.4 | 36,900 | 30.2 | 9.0 | 4.5 |
| 7 | Canada | 2.7 | 38,200 | 28.5 | 33.2 | 5.9 |
| 8 | Singapore | 7.5 | 48,900 | 41.4 | 4.6 | 1.7 |
| 9 | Hong Kong | 5.8 | 42,000 | 19.9 | 7.0 | 4.2 |
| 10 | Estonia | 7.3 | 21,800 | -3.1 | 1.3 | 5.2 |
| 10 | Switzerland | 2.6 | 39,800 | 67.9 | 7.6 | 3.1 |
| 12 | New Zealand | 3.0 | 27,300 | -10.0 | 4.2 | 3.5 |
| 13 | Australia | 4.0 | 37,500 | -51.0 | 20.6 | 4.4 |
| 14 | Netherlands | 3.5 | 38,600 | 59.3 | 16.6 | 4.1 |
| 15 | Norway | 4.9 | 55,600 | 55.8 | 4.6 | 2.4 |
| 16 | Israel | 5.1 | 28,800 | 5.9 | 7.1 | 7.6 |
| 17 | Iceland | 1.8 | 39,400 | -3.4 | 0.3 | 1.0 |
| 18 | Belgium | 2.7 | 36,500 | 11.0 | 10.4 | 7.6 |
| 19 | Chile | 5.2 | 14,400 | 8.2 | 16.5 | 7.0 |
| 20 | Portugal | 1.9 | 21,800 | -18.5 | 10.7 | 8.0 |
I’m not entirely convinced there is a strong correlation between the size of a nation and ease of doing business. I guess it depends how you define a “small country”.
Actually, it’s a great shame the Forbes ranking does not explain its methodology more fully, in particular how much weighting is given to each variable. It appears to be an aggregation of rankings in other surveys, including the World Economic Forum Competitiveness Report in which Denmark ranks number 3, if I recall correctly.
Remember, other studies have also trumpeted New Zealand as a great place to do business. The World Bank study ranked NZ as number 2 quite recently. But the World Bank assessment is heavily weighted towards regulatory freedoms that affect business. In fact more “populous” countries such as China, USA and UK rank very highly in the World Bank research.
http://www.doingbusiness.org/economyrankings/
We’ve discussed in this column already how Finland scores highly on connectivity and why this might be. Denmark also leads the pack on ICT readiness and innovation factors. Do the Nordic countries have a magic formula?
Having travelled there (and being of unashamed Nordic stock myself) I wonder if the success of those countries is simply tied to having a strongly embedded national work ethic and a highly developed social value system.
http://geniusnet.blogtown.co.nz/2008/06/30/why-ict-underpins-innovation/
Goddag!