The list, the World Competitive Yearbook 2018, is published by the Institute for Management Development (IMD).

Denmark’s strengths include good institutional and societal framework, with a high rule of law index, absence of corruption and great equality. In addition, the Scandinavian country scores well on green solutions, motivated workers and social responsibility, writes dibusiness.dk.

Among Denmark’s weaknesses, IMD points to the country’s relatively weak growth, difficulty attracting investment from abroad and very high taxes.

Competitiveness is an area in which Denmark must lead says the Confederation of Danish Industry (DI), a private interest organisation funded, owned and managed by 10,000 companies within the manufacturing, trade and service industries.

“It is crucial that Denmark is among the most competitive countries in the world if we want to continue to be among the wealthiest countries in the world. We are a small, open economy, and 775,000 Danish jobs depend on our exports. It is therefore excellent news that we have moved up one spot,” said DI’s deputy director general Kent Damsgaard.

“Although our competitiveness has improved, the development of our exports is definitely nothing to boast about. In other words, we have much work ahead of us in order to successfully lift growth and prosperity in Denmark. IMD’s mapping of Denmark’s strengths and weaknesses can help identify the areas where we need to concentrate our efforts,” the deputy director added.

Overall, Denmark ranks only 26th in the economic performance category, something that must be rectified, according to Damsgaard.

“Denmark has many strengths, and yet we fail to properly reap the economic benefits. We are creating jobs, but our productivity growth should be higher. The task is therefore to make Denmark an even more attractive country for businesses to invest in,” he said, noting that investments in new technologies and digitalisation are the key to increased productivity for many small and medium-sized businesses.

Denmark also scores low in its ability to attract highly qualified employees from abroad, ranking 18th.

“More and more companies are reporting a lack of labour, and without the necessary hands and heads, we simply cannot fulfil the growth potential that our many strengths ought to give rise to. It is therefore crucial that businesses are given the best opportunities to find talented and engaged employees – including abroad, when that is necessary,” Damsgaard said.

Scandinavian neighbours Norway and Sweden also figure high on the list, in eighth and ninth place respectively.

IMD’s report benchmarks the performance of 63 countries based on 258 different criteria. The scores of each country for all of the 258 criteria are aggregated to create one overall index for competitiveness.

IMD’s top ten most competitive countries:

1. United States (4)
2. Hong Kong (1)
3. Singapore (3)
4. The Netherlands (5)
5. Switzerland (2)
6. Denmark (7)
7. United Arab Emirates (10)
8. Norway (11)
9. Sweden (9)
10. Canada (12)
Last year’s position in parentheses
Source: IMD World Competitiveness Yearbook 2018

READ ALSO: Denmark's upswing will fizzle out without more workers: DI