Singapore is the World’s Most Competitive Economy: World Economic Forum Global Economic Competitiveness Report
For more than 40 years, the World Economic Forum has been assessing countries’ long-term competitiveness in terms of economic growth and productivity. National competitiveness, as defined by the World Economic Forum (“WEF”), is “the set of institutions, policies, and factors that determine the level of productivity.” A competitive economy is a productive economy because productivity drives economic growth and leads to improved well-being. WEF’s flagship Global Economic Competitiveness Report provides deeper understanding into the economic components of countries, thereafter uncovering various potential policy options to achieving a balance between growth, inclusion and sustainability.
Singapore Came Ahead of the U.S. And Ranked First on Seven Pillars
WEF has crowned Singapore as the World’s Most Competitive Economy, WEF’s 2019 Global Economic Competitiveness Report assesses multiple components including ‘total factor productivity’ in 141 economies (which account for 99% of the world’s GDP) through 103 indicators that shape a country’s productivity. The 103 indicators could be grouped into 12 pillars: institutions, infrastructure, Information and communications technology adoption, macroeconomic stability, health, skills, product market, labour market, financial system, market size, business dynamism, and innovation capability.
As the world’s most competitive economy, Singapore came ahead of the U.S., Hong Kong, Netherlands, and Switzerland. Holistically, Singapore performed well across macroeconomic stability, infrastructure, innovation capability and labour market. Singapore did supremely well and was ranked first on seven pillars: infrastructure, efficiency of seaport and airport services, sea transport connectivity, health, labour market, and financial system. It also achieved a near full score for macroeconomic stability. Although the U.S. fell to second place behind Singapore, it remains an “innovation powerhouse” ranking first in business dynamism and second in innovation capability.
Asia-Pacific is Now the Most Competitive Region in the World
Led by Singapore, the Asia-Pacific is now the most competitive region in the world, followed by Europe and North America. The report highlighted that a primary source of concern for the global economy was the subdued growth rate in productivity, rising inequality and accelerating climate change. The report stated that while the escalated trade war and rising geopolitical tensions are the causes of uncertainty, it will also suppress investment and increase the risk of supply shocks, namely disruptions to global supply chains, sudden price spikes, or interruptions in the availability of key resources.
Nevertheless, based on the strong performance of the economy across the indicators, Singapore is the premier business destination for enterprises considering overseas expansion into the Asia-Pacific region in these uncertain times. 3E Accounting looks forward to contributing to the continued growth and expansion of businesses and the economy.