Under Trump, US regains top spot in World Economic Forum rankings
For the first time since the 2008 recession, the U.S. sits atop the rankings of the World Economic Forum's most "ideal" economies.
What the organization refers to as the "Fourth Industrial Revolution" is well underway, and the WEF has developed some innovative criteria to rank the economies of nations.
Under the new framework for competitiveness, released Tuesday, the U.S. achieved the closest to the "competitiveness frontier," or "ideal state," with a score of 85.6. Singapore (83.5), Germany (82.8), Switzerland (82.6) and Japan (82.5) rounded out the top five in the rankings, which assessed 140 countries.
The report uses new methodology to capture the dynamics of the global economy in the Fourth Industrial Revolution, characterized by a combination of artificial intelligence, cybersecurity, idea generation and other factors.
The new tools map the competitiveness landscape through 98 indicators, using a scale from 0 to 100, which are organized into 12 pillars that note how close an economy is to an "ideal state" or "frontier" of competitiveness. The pillars are infrastructure, institutions, the adoption of information and communications technology, macroeconomic stability, health, skills, product market, labor market, financial system, market size, business dynamism and innovation capability.
"Embracing the Fourth Industrial Revolution has become a defining factor for competitiveness," said Klaus Schwab, founder and executive chairman of the World Economic Forum. "With this report, the World Economic Forum proposes an approach to assess how well countries are performing against this new criterion. I foresee a new global divide between countries who understand innovative transformations and those that don't. Only those economies that recognize the importance of the Fourth Industrial Revolution will be able to expand opportunities for their people."
It isn't just Trump's policies that have unleashed the American economy. In fact, the regulatory reform that the administration has proposed is still largely in the courts or in the process of being approved by the various departments.
What is driving U.S. economic growth is the perception that the government is no longer an impediment to business expansion. The tax cuts helped, of course, but beyond taxes, there is tremendous optimism that's fueling innovation, entrepreneurship, and a belief in a bright future.
Contrast this attitude with the economic atmosphere of the previous eight years. In their eagerness to "transform" America, Obama bureaucrats put economic freedom and growth on the back burner. It was more important to them to make the American economy serve social purposes rather than economic ones.
The result was predictable: sluggish growth, an ever expanding regulatory state, and fear and loathing in the business community.
The difference is incredible:
The weakest pillar across the spectrum is innovation capability and mastering the process, "from idea generation to product commercialization." 103 countries scored less than 50 in this area. Germany and the U.S. lead this index.
It might be a little premature to label what's happening to the U.S. economy as a "revolution." There are the problems of trillion-dollar budget deficits and ever growing public debt. And the political climate means that most of Trump's successes can be reversed if Democrats take office.
But as it stands now, the U.S. once again leads in innovation and development – key indices that could translate into political success for Trump's party at the polls.