HONG Kong has overtaken the USA to become the world’s most competitive area with the UK retaining a top 20 ranking well behind several smaller countries including Ireland, a closely-watched study has found. In the latest annual World Competitiveness ranking by IMD, Hong Kong jumped from second to first place while the US slipped from first to third. The Swiss business school said the US still boasts the best economic performance in the world but lagged Hong Kong on a basket of measures assessing factors such as business and government efficiency and infrastructure. IMD said Hong Kong is a leading banking and financial centre, which encourages innovation through low and simple taxation and free capital flows. It also offers a gateway into mainland China. The UK climbed to 18th from 19th. The country’s performance improved on measures including inflation, the number of patents in force and start-up procedures but weakened against criteria such as public expenditure on education per pupil and inflation-adjusted growth in the economy per head of the population. Ireland jumped to seventh place from 16th. Switzerland rose to second from fourth.

Eight countries in the top ten have populations of less than 20 million. The UK ranked sixth in the table for countries with populations of greater than 20 million. IMD said Western European economies have continued to improve, with the ongoing post-financial-crisis recovery of the public sector a key driver. It added: “Some of the most impressive strides in Europe have been made by countries in the East, led by Latvia, the Slovak Republic and Slovenia.”