Geneva - South Africa's economy was the biggest faller in global competitive rankings, according to an annual survey released on Thursday.
SA fell a massive 12 places to No 50 on the list of 55 economies compiled by IMD business school in Lausanne, Switzerland which publishes the World Competitiveness Yearbook.
The US economy maintained its position in the rankings, despite a record trade deficit, its high corporate tax rate on profits and low confidence in the government's handling of public finances.
Singapore was ranked just behind, with Hong Kong, Luxembourg and Denmark rounding out the top five most competitive national economies.
The study lists 55 economies according to 323 criteria that measure how the nations create and maintain conditions favourable to businesses.
Dynamism of financial market
Project director Stephane Garelli said the US' position was cemented by the dynamism of its financial market, which drives what is the world's strongest domestic economy, topping all others in its amount of investments, stock purchases and commercial service exports.
The US also ranked as the easiest place to secure venture capital for business development and surpassed all other economies in key technology criteria such as computers in use and high-tech exports, according to the report.
But Garelli said the US economy has been hurt by its record trade deficit, which combined with the budget deficit brings the national debt to US$8.7 trillion.
High dollar reserves in foreign countries, particularly in Asia, mean the US is relinquishing its grip on monetary policy.
The US is also scoring poorly in other sectors such as investments in telecoms, youth interest in science, mobile telephone subscriptions and language skills among its work force, according to the report.
The shortcomings were some of the same as those cited in a similar competitiveness study last year by the World Economic Forum, which dropped the US in its table from the top position to sixth.
"It's very good to be the leader, but the problem is that the US model has become copied by everyone else," Garelli said.
"The US constantly needs to reinvent itself because everyone else steals its recipe."
Garelli said the 2007 results highlight how many of the world's emerging economic powers were catching up with the US because of government policies better tuned to economic performance. The US has topped the list every year since 1994.
London becoming a big competitor
"London is becoming a very big competitor to New York in investment banking, while Singapore is challenging the US in wealth management," he said. "New companies and new brands are appearing all over the world."
China jumped three places to 15th in the report, which also highlighted strong improvements by India, Slovakia and Estonia. Wealthy countries to have boosted their competitiveness in recent years include Austria, Australia, Denmark, Switzerland and Hong Kong.
Garelli said only 15 of the countries analysed were losing ground to the United States. Indonesia, Italy, Argentina, Brazil, Mexico, Turkey, the Philippines and France are included in this group, he said.
Rounding out the top 10 were Switzerland, Iceland, Netherlands, Sweden and Canada. Germany made the biggest jump, up nine place to 16th.
Venezuela was ranked last for the second year in a row, immediately preceded by Indonesia, Croatia, Poland and Argentina.
- AP/World Competitiveness Yearbook