Ireland has improved its competitiveness, according to a global ranking, reaching 20th place.

While Hong Kong, the US and Switzerland topped the list of 59 economies, Ireland beat countries such as France, Japan and China, and performed well in a number of categories that are important to foreign direct investment.

The World Competitiveness Yearbook is compiled by Swiss-based business school IMD and measures how countries manage economic and human resources to increase prosperity.

Although Ireland was not among the most competitive nations in Europe – Switzerland, Sweden and Germany – the survey noted that it appeared the country, along with Iceland and Italy, was better equipped to “bounce back” compared with Spain, Portugal and Greece. These countries continued to “scare investors”, IMD said.

Ireland topped the rankings for availability of skilled labour, flexibility of workforce, investment incentive and attitudes towards globalisation. It also scored highly for its openness to foreign investors in terms of business legislation, and ranked fourth for corporate tax rates.

The news was welcomed by IDA Ireland.

“Competition for foreign direct investment is significantly increasing and the availability of skilled labour is, amongst other things, one of the main deciding factors when companies are choosing a location for their overseas investments,” IDA chief executive Barry O’Leary said.

“The fact that Ireland continues to lead the way in availability of skilled labour adds significantly to our reputation as a host for FDI and the outlook for maintaining this position in the future remains positive.”

However, Ireland performed poorly in access to credit for businesses, where it was ranked 53rd.

"Today's results show that, while there has been a noticeable improvement since 2011, we have a long way to go if we are to deliver on this ambition," Minister for Jobs., Enterprise and Innovation Richard Bruton said.

The survey found the US’s economic power, the dynamism of its enterprises and its capacity for innovation was enough to keep it among the top ranked countries, despite economic difficulties.

“US competitiveness has a deep impact on the rest of the world because it is uniquely interacting with every economy, advanced or emerging. No other nation can exercise such a strong ‘pull effect’ on the world,” said Professor Stephane Garelli, director of IMD’s World Competitiveness Center, said.

“Europe is burdened with austerity and fragmented political leadership and is hardly a credible substitute, while a South-South bloc of emerging markets is still a work in progress. In the end, if the US competes, the world succeeds.”