Phil O'Reilly

New Zealand has slipped three places in the Global Competitiveness Index, from 20th in 2009 to 23rd in 2010.

The Index ranks countries according to their ability to compete internationally, using factors such as markets, institutions, infrastructure and human resources.

BusinessNZ is a partner in the international survey.

Chief Executive Phil O'Reilly says the survey helps focus business and policy makers on areas for improvement.

"New Zealand continues to do well in areas such as freedom from corruption, ease of setting up a business, soundness of banks, quality of primary and secondary education, and a low cost burden for things like customs.

"But we continue to rate poorly for our brain drain (86th), rigid hiring and firing practices (83rd), high interest rates (79th) and lack of local competition (64th).

"Low rankings in areas relating to innovation - including government procurement of advanced technology (73rd) and availability of scientists and engineers (67th) - are also a concern."

Mr O'Reilly said New Zealand's 23rd placing compared with Australia at 16th showed how much of a challenge it would be to close the trans-Tasman gap.

Switzerland retains the number one ranking. The other countries making up the top 10 places in the Index are: Sweden, Singapore, the US, Germany, Japan, Finland, the Netherlands, Denmark and Canada.