Research from the Institute for Management Development (IMD) reveals that Australia’s competitiveness levels have reached their lowest level in the past 25 years.
Australia has fallen to 22nd place out of 64 nations in the global competitiveness ranking, slipping in the criteria of management practices, export sophistication, technological infrastructure and energy infrastructure.
According to Jarrod Ball, Chief Economist at the Committee for Economic Development of Australia (CEDA), “The rankings show business will need to do a lot of the heavy lifting, with business efficiency leading Australia’s slide in the rankings, driven by a lacklustre 58th place for management practices.”
According to the report, Australia is ranked among the worst in terms of company agility, entrepreneurship and management credibility.
“But it is not just our management practices that are deteriorating. Our heavy reliance on mineral resources and a narrow set of markets sees us rank in the 50s for our export sophistication,” says Ball.
Ball says that Australia needs to “regain our energy advantage” by prioritising climate initiatives and announcing ambitious commitments to net-zero by 2050.
Ranking the biggest changes since last year, environmental laws have improved but social responsibility, transparency and sustainable development have declined.
Despite the Australian economy responding positively to the COVID-19 pandemic and experiencing a V-shaped recovery, the report suggests that there is an urgency to rebuild economic competitiveness through increasing digitisation and reducing tax burdens.
Australia ranked 44th in ICT services, slipping 11 places in technical infrastructure.
“Governments also need to play their part,” Mr Ball said.
“Australia’s tax regime is called out in the survey as a drag on competitiveness, with Australia ranking 54th and 57th respectively for its corporate and personal income tax burdens.”
On a positive note, Australia’s skilled workforce, political stability and healthcare have again been strong performers, which have contributed to our success through the pandemic.