Helpfully, the World Economic Forum has scratched this itch for me this week in its publication of its annual Global Competitiveness Report.
The report – which surveys 142 countries – ranks nations against different criteria, essentially assessing their competitive advantage and productivity.
We’re a top country overall
On the bright side, New Zealand ranks 25th in the world overall. We are in some pretty good company (and, unbelievably, we are ahead of China!). Having said that, we have slipped five places in the last two years.
But for readers of this blog, the interesting aspect of the survey is in its assessment of New Zealand’s labour market efficiency. This factor is the “seventh pillar” against which each nation is ranked.
In short, we have a remarkably efficient labour market overall – and are ranked particularly highly in such things as cooperation in labour relations.
However there are areas identified as ‘poor’
But the two criteria against which we are ranked incredibly poorly are:
- “hiring and firing practices” (where we are 86th in the world)
- “brain drain” (where we are 82nd).
The second one probably speaks for itself: too many of our bright young people leave our country and don’t contribute their skills back to it.
And the first criteria is explained by the high level of prescription that is placed around dismissal from employment. Put in economic terms, it is difficult for us to get rid of surplus labour in a hurry – and that makes us less productive (at least against strict economic criteria).
Speaking personally, I’m not sure that I am entirely unhappy about a low ranking in this category. I would far rather have security in my job than an efficient economic ranking – and termination at will.
Having said that, our global competitors enjoy some advantage in this space –and perhaps that is one of the reasons that we are slowly slipping down the rankings overall.
This report makes for interesting reading.