"We are among the lowest-ranked of 64 nations on company agility, entrepreneurship, customer satisfaction and credibility of managers," says Committee for Economic Development of Australia (CEDA) chief economist Jarrod Ball.
Australia has fared better than most through the pandemic and may have four of the world's most livable cities according to the Economist Intelligence Unit (EIU), but a recent global competitivenes report shows the country is falling behind the pack when it comes to technology, innovation and management
The country has fallen four places to 22nd in the Institute for Management Development (IMD) World Competitiveness Yearbook 2021 despite rising in the economic performance stakes, representing the worst ever result for Australia in 25 years of the report's publication.
CEDA chief economist Jarrod Ball says the report shows Australia cannot afford to stand still despite our early success in managing the COVID-19 pandemic.
"Australia cannot waste any time getting match-fit for the post-pandemic era," Ball says.
"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.
"We are among the lowest-ranked of 64 nations on company agility, entrepreneurship, customer satisfaction and credibility of managers."
Ball adds Australia's reliance on mineral resources and a narrow set of markets sees us rank in the 50s for our export sophistication, while the country slipped 11 places on technological infrastructure and ranked just 44th for ICT services exports this year.
"We will need to be a lot more dynamic, innovative and open up new markets for new goods and services in future to deliver another generation of solid economic growth, jobs and rising incomes," he says.
"Governments also need to play their part. 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."
CEDA also claims Australia must speed up its COVID-19 vaccine rollout and build fit-for-purpose quarantine facilities to help in the safe reopening of our borders, in order to rebuild the competitiveness of the economy for future generations.
Australia also continues to rank poorly on energy infrastructure.
"We must boost our climate resilience and regain our energy advantage," Ball says.
"The Federal Government should commit Australia to net-zero by 2050 and announce more ambitious policies to get us there."
"On the positive side, Australia limited the economic damage of COVID-19 far more than other economies, which saw us move up the rankings on economic performance."
The economist highlights some strengths for Australia's competitiveness such as the skilled workforce, policy stability, legal environment, healthcare and life expectancy.
Overall, Switzerland - the home of the IMD - rose to first place from third in 2020, while Sweden jumped from sixth to second and Denmark slipped one place to third.
Rounding out the top five, the Netherlands remained in fourth place, while Singapore dropped from first to fifth in 2021.
The report found that globally, this year highlighted the importance of "innovation, digitalisation of the economy, welfare benefits and social cohesion".
"Highly competitive countries have been able to tackle these challenges by strengthening their institutional and social frameworks," the report found.
It also found that "trends in highly ranked economies show that the health and education systems remain at the core of competitiveness, contributing to having successfully endured the pandemic - so far."
Two-thirds of the criteria are based on statistical indicators, and one-third on a survey of more than 5700 international executives taken from March to April this year. CEDA is the yearbook's Australian partner.
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