Top Countries in Global Competitiveness

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But what hurt the U.S. this year was a weak macroeconomic environment. Like Japan, its debt levels are among the highest in the world. With so much money owed to creditors, the U.S. has less wealth to reinvest in its own future—and less wiggle room to address the current financial market crisis. "That's a warning sign we have been seeing for a while," Blanke says.

What About Emerging Economies?

Emerging countries with swelling economies are struggling to edge their way up the list. Burgeoning economic powerhouses such as Brazil, Russia, India, and China (the so-called BRIC countries) all rank among the top half of countries surveyed by the WEF, but their climb up the list is bogged down by a variety of factors. India, for example, boasts an impressive availability of scientists and engineers as well as top-notch research institutions. But these schools are limited to a very elite few. "At the end of the day, what we're really looking at is prosperity," Blanke says.

Of the BRIC countries, China is moving the fastest, jumping four places on this year's ranking, to No. 30. That's thanks in large part to the strides China continues to make in innovation, a surplus in its government budget, and above all the size of its domestic market. "It's huge and growing," Blanke says.

Still, these emerging markets have a way to go to before they enter the big leagues. Blanke predicts that at their current rate, it will take 10 years or more for them to challenge the top ranks of the world's most competitive economies. "They are going to do amazingly well, but they all require much more investment based on their populations," Blanke says.

For a slide show of this year's top countries, see "Who's Winning the Race?"

For a complete table of the rankings from this and previous years, click here.

For last year's WEF winners, see "Who's Ahead in Global Competition?"

For an alternative ranking of global competitiveness, see the most recent annual study from Swiss business school IMD, "The World's Most Competitive Countries."

Matt Mabe is a reporter in BusinessWeek's Paris bureau .