A competitive ranking of 63 advanced economies published on Wednesday showed the United States improving three positions to return to the top spot, overtaking Hong Kong, Singapore and the Netherlands, and leaving Switzerland behind.

As the top five most competitive countries in the world remained the same — changing only in their order — the American economy's comeback was mainly driven by economic performance, government efficiency, capital provision and digital infrastructure, said the authors of the study compiled by the Swiss Business School IMD.

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Arturo Bris, director of the IMD World Competitive Center, noted that countries at the top shared an above-average performance across all relevant sectors, but that their "competitiveness mix varies."

"One economy, for example, may build its competitiveness strategy around a particular aspect such as its tangible and intangible infrastructure; another may approach competitiveness through their governmental efficiency," he said.

The IMD World Competitiveness Center has published the rankings every year since 1989. The study is based on 258 indicators, including both hard data such as employment and trade statistics, and soft data gathered from a survey of executive opinions on issues such as corruption, environmental concerns and quality of life.

Attractive USA

The US economy lost its long-time competitive lead in 2016, when it fell to third place, and even to fourth place one year later.

The 2018 survey now has found the US to be especially attractive because of its dynamic economic development, easy access to financing and a business-friendly environment in general. 

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While the world's largest economy excels in economic diversification, direct investment, venture capital and digital infrastructure, its weaknesses remain exports, national debt and labor force remuneration among others.

The remaining places in the top 10 are occupied largely by Scandinavian countries: Denmark (6th), Norway (8th) and Sweden (9th). These countries show strong performance in the overall productivity of the private sector and its management practices. The United Arab Emirates (7th) and Canada (10th) close the top of the rankings.

Gainers and laggards

Other economies advanced even further than the US's this year. Austria, for example, improved its position most significantly, moving from 25th to 18th, while China gained five places and is now ranked 13th.

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IMD's Arturo Bris said economic growth, reduction of government debt and increased business productivity enabled Austria to move up.

"In the case of China, investment in physical and intangible infrastructure as well as improvement on some institutional aspects such as the legal and regulatory framework boost its performance," he added.

Europe's biggest economy, Germany, fell back two places, coming in at 15th — the fifth consecutive annual decline. IMD Chief Economist Christos Cabolis attributed the slide to increasingly negative views about the government's ability to cope with current business developments. In addition, German entrepreneurship and the credibility of managers were seen with rising skepticism, he said.

"Corporate heads are skeptical about Germany's willingness to embrace the digital transformation in its economy or even fully grasp the dimension of the change," he told the news agency Reuters.