Through a global lens, Denmark's economy, for the first time in the rankings' history, is the most competitive for 2022. It is followed by economies such as Switzerland (previously top in 2021), Sweden (2nd in 2021), and the US.
Singapore's economy ranks 3rd in competitiveness, according to the latest International Institute for Management Development (IMD) World Competitiveness Ranking report. In 2021, its economy took the 5th position, while in the year prior, it was at the top spot.
ASEAN neighbours Malaysia, Thailand, Indonesia, and the Philippines are respectively ranked at 32nd, 33rd, 44th, and 48th. Meanwhile economic counterpart Hong Kong takes 5th spot, recovering from its previous 7th position in 2021. Vietnam is not included in the rankings, while India takes the 37th spot.
For context, the IMD report analyses and ranks economies based on how the government manages its competencies and policies in domains such as economic, government, business, and infrastructure to achieve long-term value creation, comprising 333 competitiveness criteria which go beyond the realms of gross domestic product (GDP) and productivity levels. The most competitive economy has a score of 100.
With that in mind, through a global lens, Denmark's economy, for the first time in the rankings' history, is the most competitive for 2022. It was revealed that, over the years, Denmark has improved from its lowest position of 15th in 2001, to 13th in 2010, 6th in 2016, and 2nd in 2020. The European economy is followed by economies such as Switzerland (previously top in 2021), Sweden (2nd in 2021), and the United States.
At a quick glance, the top 10 most competitive economies globally are:
- Denmark (100)
- Switzerland (98.92)
- Singapore (98.11)
- Sweden (97.71)
- Hong Kong (94.89)
- Netherlands (94.29)
- Taiwan (93.13)
- Finland (93.04)
- Norway (92.96)
- United States (89.88)
Explaining Singapore’s recovery in rankings, analysts believe it stems from "strong improvements" in criteria such as 'domestic economy' (whereby it improved from 15th to first), 'employment' (third from 18th), 'public finance' (sixth from 12th), and 'productivity & efficiency' (ninth from 14th). Furthermore, Singapore's economy witnessed "slight gains" in 'business legislation' (second from third), 'education' (sixth from seventh), as well as a strong performance in the area of 'international trade & technological infrastructure'.
That said, it was revealed that Singapore remains in "relatively low positions" in several criteria including management practices (14th), scientific infrastructure (16th) , and health & environment (25th); and "experiences some declines" in 'societal framework' (17th to 22nd), 'labour market' (4th to 12th), and 'attitudes & values' (9th to 12th).
If Singapore seeks for a higher ranking, analysts say that it has to:
- Navigate challenges posed by external economic developments, including global supply chain disruptions as well as elevated energy and commodity prices;
- Support the economic recovery of sectors that continue to be affected by the COVID-19 pandemic;
- Help businesses transition towards a low-carbon future, and
- Ensure that workers continuously develop new skills and sharpen existing ones to meet labour demand in growth sectors.
Looking at counterpart Hong Kong, analysts believe its recapturing of a top five spot can be attributed to its positive progress in the criterion of 'economic performance', which comprises areas like 'international trade' and 'international investment'. Be that as it may, the economy experiences a slight decline in 'government efficiency' despite improvements in the area of 'public finance'. On top of that, it remains "relatively low" in the 'societal framework'. For its 'business efficiency' criterion, Hong Kong faces an overall decline because of "sharp declines" in the labour market and attitudes & values criteria.
Its performance in the 'infrastructure' criterion remains relatively stable, while showing some gains in 'health & environment', and drops in 'education'.
If Hong Kong aims to improve its competitiveness rankings, analysts say that it has to:
- Control the epidemic, and support and revive the economy;
- Navigate through the external challenges arising from slower global economic recovery, monetary policy normalisation by major central banks and mounting geopolitical uncertainties;
- Seize the opportunities brought by the Mainland’s economic development;
- Further promote innovation and technology, and
- Address the growth constraints of land and manpower.
In the report, it was also noted that Thailand "drops the most places" in its 'government efficiency' criterion, while Malaysia "experiences the sharpest downturns" and "falls the most positions" in its 'business efficiency' and 'infrastructure' criteria respectively. Indonesia, on the other hand, "gains the largest number of positions" for the 'infrastructure' criterion.
With regard to what the economies' are doing to improve their rankings, analysts find Malaysia has to expand regulatory reforms initiatives to micro levels through public-private collaboration; enhance technological adoption to increase productivity at firm level; accelerating talent development initiatives to keep up with new and emerging job challenges and nurture a future-ready workforce, and strengthen productivity and competitiveness through mindset change and creativity.
Thailand has to revive economic vibrancy; to enhance public sector resiliency; to improve social inclusiveness, to drive for digital capabilities enhancement, and to establish future-oriented talent management. While Indonesia has to set as priority development strategies in the post-pandemic era; to supervise the financial sector to play a more active role in credit growth; to encourage effective implementation of regulations that create competitiveness; to strengthen policy in the health and education sectors as future sources of competitiveness, and to focus on ways to solve issues in telecommunications and renewable energy.
As for India, it was shared in the report that the economy has to manage trade disruptions and energy security; to maintain high GDP growth post COVID; to build skill development and employment generation; to dive into strategic disinvestment and asset monetisation, and to engage in resource mobilisation for infrastructure development.
Image / IMD