Every two years, the financial consulting firm Eight Advisory publishes an original summary on the competitiveness of a few dozen countries. For L’Express, one of his associates, Alexis Karklins-Marchay, also an essayist (he recently signed For a humanist liberalism), analyzes its latest edition. We thus learn that the most competitive nations have less than 10 million inhabitants and we see confirmation that France, although it is relatively well ranked among countries with more than 25 million inhabitants, benefits from strong points since it is the European champion for the number of large companies and has a strongly redistributive social model, but suffers from certain weak points, such as the average strength of its economy, hampered by the imbalance of its public finances.
L’Express: What is competitiveness and why is it important?
Alexis Karklins-Marchay: Too often, particularly in France, competitiveness is a term with negative connotations. For many, it would be synonymous with low wages and aggressive taxation. But all the rankings show it and our report confirms it: the most competitive nations not only have high per capita incomes, but are also the best in social and environmental terms.
Improving the competitiveness of a nation means attracting foreign investors but also enabling the development of activity and businesses on its territory. In fact, competitiveness leads to more jobs, greater purchasing power and, ultimately, an increased quality of life.
Why propose your own competitiveness index? How did you build it?
In our opinion, we must go beyond the classic but simplistic vision according to which only cost competitiveness, which depends on the level of production costs, would be relevant. We are convinced by observing the motivations of investors and companies that our firm Eight Advisory supports that the choice to develop in this or that country is based on at least four factors. What we called the “pillars” in our report: the economic pillar, obviously, but also the educational, social and environmental pillars.
However, until now, international rankings in terms of competitiveness only took into account the economic dimension. This approach has long seemed too simplistic to us and we have been publishing a summary every two years covering all facets of competitiveness for more than a decade.
In this new edition, we wanted to go even further, by giving a grade, ranging from A+ to E, to each of the 43 countries studied according to these four pillars. This score is calculated from their relative position in the 32 different international rankings that we have selected and which cover the economic, educational, social and environmental dimensions. This original method thus makes it possible to compare countries objectively and to identify the areas in which each excels or, on the contrary, suffers from delays.
Why are economic criteria not sufficient to measure competitiveness?
Economic criteria obviously remain essential and the countries that appear to be the most competitive all have business-friendly ecosystems in common. But they also have strong institutions as well as open and “inclusive” societies. [NDLR : au sens que donne à ce terme l’économiste Daron Acemoglu, autrement dit, des sociétés qui encouragent la participation de leurs membres à des activités économiques qui emploient au mieux leurs talents, et qui permettent aux individus de faire les choix qu’ils souhaitent]. To attract investors or grow an activity, the quality of training, political stability, the level of social cohesion and, now, the ability to access carbon-free energy are just as decisive. Talking about competitiveness by studying only the economic dimension would therefore be insufficient and incomplete.
France is well ranked, while the feeling of relative downgrading of the country is increasing. How do you explain it?
First of all, it must be remembered that if France appears “well ranked”, this is only relative, and it is only among the most populated countries. Because the most competitive nations in our 2023 report are all nations with fewer than 25 million inhabitants: Finland, Sweden, Switzerland, Denmark, Austria, Norway, Ireland and even Estonia. A sort of bonus for “small size”.
Among countries with more than 25 million inhabitants, only Germany, Canada and Australia are close to the “best”. On the other hand, France, as well as the United Kingdom, the United States and Italy, are a little behind.
If I had to summarize France’s position, I would say that it is doing worse than it could but better than it believes. The feeling of distrust and pessimism that characterize us cannot obscure some of our assets: France is the European champion in terms of the number of large companies and world leaders. Our infrastructure remains favorably judged. Our leading schools are recognized and train the entrepreneurs and executives of tomorrow. Our redistributive model is certainly expensive and open to criticism, but it still allows us to maintain a certain cohesion, even if social tensions worry many observers. Finally, in environmental matters, particularly with regard to CO₂ emissions, we are among the most advantaged nations.
The latest Pisa survey shows an alarming decline in OECD countries’ results in mathematics and reading, with France falling even more than the average. Isn’t this contradictory with our country’s membership in group A?
The downgrading of France as it emerges from the latest Pisa ranking must first be put into perspective: on the one hand, our report was based on the previous ranking, because the last edition was not yet available when we have finalized our analyses. On the other hand, if we are indeed moving backwards in recent years, the Pisa ranking shows that many other Western countries have also declined over the same period.
More broadly, the A grade above all reflects the fact that France benefits from the quality of its business and engineering schools as well as the reputation of several of its universities. This phenomenon counterbalances the decline in primary and secondary education. However, let us be clear: if the recent trends observed in the Pisa ranking continue, France will end up being demoted.
What actions does your report recommend to improve France’s competitiveness?
Our report once again underlines that France is especially behind in the economic field, particularly macroeconomic – I am thinking here of public debt and our deficits, as well as the burden of our standards and our administrative environment which characterize us, as shown, for example, by our poor economic freedom index. Furthermore, France is among the bottom of the class in terms of taxation. 38ᵉ! Even if taxation is not everything, such poor performance can only penalize us.
Finally, as we have mentioned, without improvement in educational matters at the primary and secondary levels, we will ultimately lose skills and the ability to develop.
It is urgent to make competitiveness a central theme of public debate. If we do not ensure that we are more competitive, we will in fact gradually be relegated, which will have a lasting impact on our purchasing power and our quality of life. We will also be unable to generate the financial resources essential to accelerate our energy transition, finance innovation, confront the aging of our population and invest in the future of our children.
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