Lithuania jumped to the 29th position in the World Competitiveness Index
Lithuania rebounded to its former highest place in the world competitiveness index published by the Swiss Institute of International Management (IMD). In 2022, it ranks 29th among 63 countries.
‘To increase the competitiveness of Lithuania, we must seek changes in a number of fields – from stability of economic environment to effective work of public sector. The present situation in the region certainly brings even more challenges. This year, an immense innovation reform took place in Lithuania – by now, we have an operating Innovation Agency Lithuania which will enable targeted focus on implementation of decisions with long-term effect,’ said Economy and Innovation Minister Aušrinė Armonaitė said.
According to the analysts of Innovation Agency Lithuania, stable economic environment is the largest challenge for the competitiveness of the Lithuanian economy. ‘Back in 2020, we were pleased with our economy’s resilience and stable growth during the pandemic, however we failed in retaining our relative advantage – most of other global economies experienced faster growth last year than we did. Though this could have been caused by the statistical effect of the comparative base, however, maintaining our previous advantage of economic environment in the present geopolitical environment may be complicated’, stated Jonė Kalendienė, Head of Research and Analysis Division of Innovation Agency Lithuania.
According to Ms. Kalendienė, rising prices, shortage of raw materials, political challenges, shortage of labour force cause concern for business because of significantly decreased competitiveness of costs.
No significant changes in business taxation took place last year, however assessment of tax system competitiveness also deteriorated in the eyes of business. Thus, pressure on the authorities to ease the tax environment is growing. Such decision will not be easy because of positive debt interest rate and growing pressure on budget expenses. It should be noted that subindex of governmental effectiveness is in particular high at the moment and Lithuania is ranked 23rd by it. Decisions on budget deficit and debt in 2021 strongly contributed to that, while retaining them this year will be extremely difficult.
‘The estimate of improving economic competitiveness in Lithuania was favourably impacted also by growing business effectiveness. Growing effectiveness of business financing has been observed for several years in a row. By this indicator, Lithuania jumped from 48th place in 2020 up to 40th place in 2022. Active efforts of private and governmental institutions aimed at improving financing access for Lithuanian enterprises have already been felt by businesses. According to the assessment of the IMD in 2022, access to finances, as one of the key factors of attractiveness of Lithuanian economy, was named two times more companies than last year’, commented Ms. Kalendienė.
According to the observations of the IMD as well, one of the biggest challenges of competitiveness for all economies is significantly increased significance of social responsibility. In 2022, social responsibility of Lithuanian business was ranked above the average, and by this indicator Lithuania moved forward quite strongly (from 37th place in 2021 up to 11th place in 2022). Since the data required for the assessment were collected in this March – April, the military aggression of Russia in Ukraine and the response of the Lithuanian people and business by concentrating the efforts and helping Ukraine had an impact on such high estimate.
The IMD has been conducting the competitiveness rating since 1989, and it was introduced for the 34th time this year. In this rating, Lithuania has been assessed and compared to other countries of the world since 2007.
Among the Baltic States, the top position is held, and highest economic competitiveness is recorded in Estonia, which stands 22nd this year. Latvia is ranked 35th.
Further information about the IMD global competitiveness rating is available on:
Lithuanian life science innovation will again be on display at the 2022 BIO International convention in San Diego. Innovation Agency Lithuania will showcase 8 leading Lithuanian biotech stars on the Lithuanian pavilion demonstrating why Lithuania is one of Europe’s fastest-growing life science hubs. All are looking to build stronger links with the US which is already the country’s biggest market accounting for 28% of its life science exports in 2021.
Lithuania is a perfect place for women to join tech industries as the country is one of the fastest-growing centres of life sciences in Europe and has a vibrant ICT, financial technologies, video game, and laser sectors. The start-up community, which has already exceeded one thousand companies, attracts talents from all over the world to innovate and think about solutions that can contribute to a global change for the better in many spheres, ranging from gene editing to solving circular economy challenges.