Australia's global competitiveness ranking has dropped out of the top 20 for the first time in more than two decades, partly undermined by poor government efficiency readings.
It was ranked 17 last year in the Swiss-based IMD World Competitiveness Yearbook - which ranks and assesses 63 countries - after being 16 in 2013.
Its 2017 edition again ranks Hong Kong first, followed by Switzerland and Singapore as the US dropped out of the top three to fourth.
Chairman of national think tank the Committee for Economic Development of Australia Rod Maddock said the last time Australia was this low was in 1996 when it also ranked 21.
Issues such as energy infrastructure, the corporate tax rate and how to skill Australia's workforce to take advantage of digital disruption were areas where Australia performed poorly, he said.
Among government efficiency rankings, the corporate tax rate was the area where Australia had the poorest ranking at 50.
"Other areas where we performed poorly were the state of the budget (40) and effective personal income tax rate (44)," Dr Maddock said in a statement on Thursday.
The latest edition of the IMD yearbook for the first time has introduced a separate digital competitiveness ranking, where Australia came in at 15.
The areas of most concern were training and education, where Australia ranked 51 and business agility with a ranking of 42.
"These two go hand in hand because if people have the right skills and training then business can use these talents to adapt and embrace new opportunities as technological change disrupts business," Dr Maddock said.
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