Availability to the latest technology, professional management and a non-corrupt society put Sweden as the world’s second most competitive country, overtaking the United States and Singapore.

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The United States fell from the top three spots on the World Economic Forum's competitiveness ranking published Thursday, weighed down by massive debt and waning confidence in its public institutions. According to the annual World Competitiveness Report, the United States ranked fourth this year, slipping from second place a year ago.

Switzerland maintained its lead on the index, while Sweden and Singapore took second and third place. The Nordic countries continue to be well positioned in the ranking, with Sweden, Finland (7th) and Denmark (9th) among the top 10, and with Norway at 14th. Sweden overtakes the US and Singapore this year to be placed 2nd overall, the report said.

“Sweden has many strengths, including excellent institutional environment, transparent governance and low corruption. In addition to all these things, it’s focusing on education and is highly innovative”, Jennifer Blanke, the head of the World Economic Forum's Global Competitiveness Network, said.

“Also one of the reasons [Sweden] has improved is because its macroeconomic environment is looking a bit better than in contrarily to many of the other industrialized countries", she added.

Sweden scored number 1 in a number of sub-rankings, such as efficacy of corporate boards, protection of minority shareholders’ interests, extent of staff training, effectiveness of anti-monopoly policy and reliance on professional management.

The Scandinavian country also had the highest availability of latest technologies, most broadband Internet subscriptions and the biggest company spending on R&D.;

Most problematic factors for Sweden were restrictive labor regulations, tax rates and access to financing, the World Competitiveness Report pointed out.

The report pointed out that "a number of escalating weaknesses have lowered the US ranking over the past two years."

While US companies are highly sophisticated, the ranking on the country's public institutions has dropped to 40th place from 34th among 139 countries.

"The public does not demonstrate strong trust of politicians, and the business community remains concerned about the government's ability to maintain arms-length relationships with the private sector, and considers that the government spends its resources relatively wastefully," said the report.

In addition, on the issue of auditing and reporting standards, the United States slipped from 39th place to 55th this year.

The country also continued to be ranked poorly in macroeconomic stability -- at 87th place, although this marks a slight improvement from the 93th place a year ago.

"Prior to the crisis, the United States had been building up large macroeconomic imbalances, with repeated fiscal deficits leading to burgeoning levels of public indebtedness; this has been exacerbated by significant stimulus spending," it said.

"In this context it is clear that mapping out a clear exit strategy will be an important step in reinforcing the country's competitiveness going into the future," it added.