Think 8th…and the outlook isn’t promising.
Looking for evidence that Pax Americana is lumbering towards decline? The 2018 “Best Countries” ranking should serve as a wake up call. Developed in partnership between U.S. News, Y&R’s BAV Group, and the Wharton School, the new ranking shows the United States has slipped four spots since the ranking was christened in 2016. To fill the vacuum, nations are turning to liberal democracies in Europe for guidance.
Released today (January 23rd), the Best Countries ranking is one of the best measures yet that the axis of culture, commerce, and cachet is slowly spinning away from the melting pot. At its heart, the ranking is look at global perceptions of individual. It is based on surveys measuring countries on nine criteria, including entrepreneurship, adventure, citizenship, cultural influence, heritage, economic movement, openness to business, power, and quality of life. Overall, Switzerland nabbed the top spot for the second consecutive year, with Canada and Germany trailing closely behind.
The continuing spiral of American power and prestige is the ranking’s big takeaway, however. That’s particularly true for MBAs, who understand that businesses flourish in environments that are dynamic, secure and transparent – and rife with possibilities and options. Over the past two years, the United States’ rank has fallen in five of U.S. News’ nine categories – and held steady in the remaining four. The nation’s biggest drop has occurred in the Open for Business category, which measures world opinion in areas like government corruption, bureaucracy, and transparency. Here, it fell from 23rd to 43rd in just two years.
America’s strength in this area, according to survey, was low corruption. On a 10 point scale, the United States scored a 0.2, slightly lower than Switzerland (0.0), but far better than China (4.7) and India (6.5). Beyond that, the United States lagged behind most nations in measures that comprised Open for Business. Namely, it produced the worst possible score for manufacturing and among the lowest for taxes. To add insult to injury, America’s level of bureaucracy is considered just slightly better than India, the barometer for byzantine. Worse yet, the world shows minimal faith in the transparency of its government practices, scoring just a 2.5. By comparison, northern neighbor Canada notched a 9.1.
Beyond that, the United States also slipped in adventure (27th to 33rd), citizenship (11th to 16th), economic movement (22nd to 29nd), and quality of life (14th to 17th). Notably, survey respondents levied low marks to the country in subcategories like sex appeal (0.5), environmental concern and trustworthiness (1.2 and 1.9 respectively), and being “different” and “unique” (0.4 and 1.3). More damning were the sentiments shown in the quality of life category. Although the United States ranked among the best for strong job markets and economic stability, it scraped near the bottom for affordability (0.8), income equality (1.4), and safety (2.0). In addition, American political stability (3.5) and public healthcare system (3.7) also scored below the norms.
That said, American exceptionalism remains potent in several areas. Respondents concede that the United States remains the most powerful nation, buoyed by strong alliances, economic influence, military force, and leadership. Economically, it ranked among the best – if not the best – for technological expertise, access to capital, and infrastructure. At the same time, it produced high marks for being “modern” and “dynamic” – not to mention a perfect score in “religious freedom.” At the same time, the United States carries a special burden on the world stage. A nation of immigrants, it is far less homogenous than most nations. In a fragmented world, it also acts as the de facto enforcer of global norms.
SWITZERLAND AND CANADA LEAD THROUGH SOFT POWER
Still, this ‘might makes right’ mentality has grown increasingly archaic as nations have become more connected – and interdependent – than ever. “For the countries that rose to the top of this year’s rankings, it is once again clear that military vigor and economic power are no longer the key determinants to a country’s brand success,” explains David Sable, Y&R Global CEO, in a press release. “The Best Countries rankings continue to show us that just as brands must focus on a wide range of attributes to raise profiles and win over audiences, nations that are multidimensional and that reflect a wider range of qualities, such as innovation and compassion, have the brand appeal that propels them on the global stage.”
Switzerland personifies such “soft power” values. Home to IMD and St. Gallen, the Swiss are popularly known for being peacemakers (and bankers). They were the only nation to notch a perfect 10 index score, exercising influence through business savvy and heavy investment in their infrastructure. Survey scores showed that respondents viewed them as a “trustworthy” broker with a vibrant politic elite that cares deeply about human rights and the environment. The nation also earned perfect scores for its “well-developed legal framework”, “educated population”, “safety”, “easy access to capital”, and “economic stability.” It added a near perfect mark for its “well-developed public health system.”
To see how the United States, China, India and others fare by category, go to the next page.