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The World Economic Forum (WEF) defines competitiveness as a "set of institutions, policies, and factors that determine the level of productivity of a country." To determine their level of competitiveness, the WEF divided 144 nations into three classifications, based on their stages of development. The WEF uses a combination of factors, such as improving business sophistication and institutional framework.

The competitiveness of a country and its economic development is highly correlated with its Gross Domestic Product. The WEF report revealed that "Factor-driven" economies are among the least developed, depending on low-skilled labor and natural resources. Most developed countries, on the other hand, are "efficiency-driven" as they rely on economic output through increased production efficiency.

The World Economic Forum measures competitiveness using 12 pillars, namely infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation. The study was conducted by the International Institute for Management Development (IMD) based in Lausanne, Switzerland using 338 criteria in four broad categories -economic performance, government efficiency, business efficiency and infrastructure. A third of the ranking is based from a survey of over 4,300 international executives while the remaining is based on hard statistical data from organizations like OECD, IMF, and World Bank.

According to USA Today, the United States have improved their ranking from fifth place last year to third place this year and has attributed its growth from business sophistication and institutional frameworks. Here are the Top five most competitive countries, based on the Global Competitiveness Report.

1. Switzerland

GCI Score (1-7) : 5.704

GDP Per Capita : $47,303.25 (7^th highest)

Debt as a pct. of GDP : 49.4% (60^th highest)

Pct of residents using Internet : 86.7% (60^th highest)

Biggest problem in doing business : Inadequately educated workforce

For the six years straight, Switzerland emerged as the most competitive economy in the world. With its well-trained labor force and high level of innovation, Switzerland has one of the most sophisticated business sectors. It also maintains one of the most stable macroeconomic environments.

2. Singapore

> GCI score (1-7): 5.645
> GDP per capita: $64,628.48 (3rd highest)
> Debt as a pct. of GDP: 103.8% (11th highest)
> Pct. of residents using Internet: 73.0% (33rd highest)
> Biggest problem in doing business: Restrictive labor regulations

Aside from having the lowest unemployment rates, Singapore ranks as one of the highest GDP's per capita in the world this year. It has the strongest overall environment for institutions, infrastructure, macroeconomics, health, and education. It also got a high score for its transportation infrastructure, which accounts for more than 178% of its GDP.

3. United States

> GCI score (1-7): 5.544
> GDP per capita: $54,609.47 (6th highest)
> Debt as a pct. of GDP: 104.5% (10th highest)
> Pct. of residents using Internet: 84.2% (16th highest)
> Biggest problem in doing business: Tax rates

The United States jumped two notches from fifth last year due to improvements in core institutions and macroeconomic environment. However, it still trails 32 other countries in being able to provide basic economic requirements, such as infrastructure, health and primary education. It has the largest domestic market in the world and has the fourth most sophisticated business environment.

4. Finland

> GCI score (1-7): 5.501
> GDP per capita: $36,700.27 (21st highest)
> Debt as a pct. of GDP: 57.0% (49th highest)
> Pct. of residents using Internet: 91.5% (7th highest)
> Biggest problem in doing business: Tax rates

Finland has a highly transparent public institution and extensive infrastructure. It has the strongest health and education system compared to other countries reviewed. However, its small market size of only $194 billion remains one of its barriers to attaining economic competitiveness.

5. Germany

> GCI score (1-7): 5.488
> GDP per capita: $40,756.66 (15th highest)
> Debt as a pct. of GDP: 78.1% (26th highest)
> Pct. of residents using Internet: 83.9% (17th highest)
> Biggest problem in doing business: Restrictive labor regulations

Germany has the third most competitive concentration of interconnected businesses and suppliers. With its reliance on research and development, it emerged as the fourth most sophisticated production process. However, its economic effectiveness was badly affected by its high level of public debt.