The 2016-2017 Global Competitiveness Index (GCI) has been released.
This year's report by the World Economic Forum focusses on the challenges and opportunities associated with a digital 'Fourth Industrial Revolution' in which converging technologies are blurring the lines between the physical, digital, and biological spheres.
But the backdrop to this major transformation of global economies is a phase of slow growth framed by geopolitical turmoil, financial market fragility, and sustained high debts in emerging markets.
The report emphasises that for economies to again enter a higher growth path they will require competitiveness-enhancing measures that strengthen productive sectors, and support the emergence of new sectors of economic activity.
Compared to other leading nations, Australia is not performing well on that score.
As with the recently released 2016 Global Innovation Index, Australia slips down one rank to 22nd place in the GCI, while there is little change in the top tier led by Switzerland, Singapore, the US, the Netherlands and Germany.
Australia is also lagging other leading East Asia and Pacific nations, with Singapore (2nd), Japan (8th), Hong Kong SAR (9th), New Zealand (13th) and Chinese Taipei (14th) found to be signficantly more competitive.
On the bright side, the report notes that Australia is "remarkably consistent yet never stellar" across the 12 pillars of competitiveness the ranking is based on. The country does not rank lower than 28th in any pillar, including im the efficiency of its labor market (28th), and its macroeconomic situation (23rd).
But its innovative capacity remains a profound weakness, the report finds. Ranked 26th on this measure, Australia is far behind the world's innovation powerhouses.
"Innovation represents Australia’s challenge and imperative in the face of low commodity prices and China’s slowdown. In both business sophistication (28th, down one) and innovation (26th, down three), Australia not only lags far behind the best performers but also loses ground to them."