Denmark’s international competitiveness has been significantly reduced according to the annual ”Global Competitiveness Report” by the World Economic Forum.

The list, which measures countries according to a range of indicators such as health and educational level, drops Denmark down four places from 8th to 12th.

The drop continues a trend that started after the 2008/2009 report ranked Denmark as the third most competitive country in this list of 100 countries.

The Danish partner to the World Economic Forum, the Danish Technological Institute, said they were worried by the trend.

“Denmark was quickly overtaken this year and the report indicates that Denmark is in dire need of strengthening its level of education in the coming years,” Hanne Shapiro, head of centre for policy and business analysis at the institute, wrote in a press release. “Trust in the political system and its ability to react to the crisis is also being eroded, which makes its communication with the average Dane even more important.”

Aspects that contributed to the poorer performance was Denmark’s drop from third to 14th in educational level from 2010, while the country’s health care was ranked as 29th best.

The report did note, however, that Denmark has a strong technological preparedness and a relatively flexible employment market. Denmark ranked 12th in innovation.

Danish access to financing was noted as a particular problem for Danish competitiveness, while the tax pressure also made running a business difficult.

Switzerland topped the list for the fourth year running, with Singapore coming in second and Finland overtaking Sweden for third. Denmark is still ahead of Norway, which ranked 15th.

It's not all doom and gloom for Denmark, however, as this April Copenhagen was ranked at a favourable 23rd in a recent competitiveness study of 120 cities by The Economist.

And despite whatever opinion the World Economic Forum may have, recent figures suggest that Danish competitiveness is actually improving.

Wages have been rising faster in Sweden and Germany than in Denmark, and a combination of those smaller wage increases coupled with higher productivity in Danish companies has strengthened the country’s competitiveness and helped to snare a larger share of export markets.

Read the full World Economic Forum report here.