U.S., the most competitive economy: WEF

London (Reuters): The United States has regained top spot as the world's most competitive economy and has the best prospects for growth over the next five to eight years, the World Economic Forum said in a report published on Tuesday.

The U.S. pushed Finland into second place in the rankings of 80 countries for both growth potential and current competitiveness in the Global Competitiveness Report 2002-2003.

The ranking did not come as a surprise to the World Economic Forum.

"That is not very surprising." the WEF's chief economist Peter Cornelius told a press conference. "The United States remain extremely innovative."

But in the current climate of global uncertainty risks remain.

"That the United States is ranked number one ... should not lead to complacency for to maintain this leading position, the country has to resolve outstanding reform issues, especially the need to improve its governance system," Cornelius added.

The World Economic Forum describes itself as an independent international organization committed to improving the state of the world.

In the 2001 report, Finland, home of the world's biggest mobile phone maker Nokia, was first and the U.S. second in both categories.

Finland's fallback was mainly blamed on the slip-page in IT, "but they are still in a good sound position, that's no accident," said Harvard Business School's Michael Porter, who contributed to the report.

The growth competitiveness index is made up of three variables, technology, the quality of public institutions and the macroeconomic environment, that drive medium and long-term growth.

"Competitive countries can be expected to return to a sustained growth path faster and earlier than those that are less competitive," the report said.

The report is based on a mixture of statistics, public information and surveys of 4,800 business leaders.

The U.S. ranks first both for its technology and for the macroeconomic environment but only 16th in terms of the way public institutions are perceived.

Finland also scores highly on technology and its public institutions are perceived as the best in the world, according to the report by the Geneva-based WEF, which aims to provide a forum for discussion of key issues in business, politics and economics.

Taiwan is ranked third by growth competitiveness. Singapore retains fourth position. Sweden rises to fifth from ninth and Switzerland jumps to sixth from just 15th in 2001.

Canada, which the WEF said suffered "weaknesses across the board," is a big faller among the leaders in growth potential, slipping to eighth from third, while the Netherlands slides to 15th from eighth.

Japan, whose recession-plagued economy has shown a slight recovery this year, improves markedly in the rankings, rising to 13th from 21st.

Japan still remains one of the most innovative countries in the world.

The index of macroeconomic competitiveness measures the ability of an economy to make the most of its current resources, in terms of the sophistication of company operations and strategy and of the quality of the national business environment.

After the U.S. and Finland, the United Kingdom takes third position, rising from seventh in 2001.