SINGAPORE: Singapore has slipped a notch from its place as the world's second most competitive economy, according to a report by the World Economic Forum (WEF) published on Wednesday (Sep 27).
It is now in third place out of 137 economies worldwide, coming behind Switzerland and the United States.
Switzerland topped the ranking for the ninth straight year, with an overall score of 5.86 in the Global Competitiveness Report 2017-2018.
The US wasn't far behind with 5.85 while Singapore, having swapped places with the US, ranked third with a score of 5.71.
The Global Competitiveness Index scores economies from a range of one to seven, with one being the worst.
The study, which is based 70 per cent on survey data and 30 per cent hard data, took into consideration 12 pillars of competitiveness to determine a country’s ranking.
These are: Institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication and innovation.
SINGAPORE MOST COMPETITIVE IN APAC
The report stated that of the 12 pillars, Singapore’s macroeconomic environment – in which it ranked 18th - slightly deteriorated “as a result of a persisting deflationary spell”. Singapore ranked 11th in this aspect last year.
There is room for improvement in innovation and business sophistication factors. “Singapore continues to lag behind the world’s most prolific innovation powerhouses in these areas,” said the report.
It also noted that, based on a 2017 survey on the opinion of business executives across the world, restrictive labour regulations, insufficient capacity to innovate and inflation ranked as the top three problematic factors for doing business in the country.
However, WEF said Singapore overall "posts an excellent performance across the board". The economy continued to lead in higher education and training, as well as in goods market efficiency.
Singapore also ranked first worldwide for public sector performance, one of the categories considered in the institutions pillar.
“The country also possesses superior transport infrastructure, its labour market is extremely efficient, and its financial sector is well developed, stable and trustworthy,” WEF added.
Among the 17 East Asia and Pacific economies covered, Singapore continued to remain the most competitive.
Thirteen economies increased their overall score – albeit marginally – with Indonesia and Brunei making the largest strides since last year, said the report. Indonesia rose from 37th to 36th place, while Brunei jumped from 58th to 46th spot in the index.
ILL-PREPARED FOR NEXT WAVE OF INNOVATION: WEF
The WEF said the report found that 10 years after the global financial crisis, economies are still at risk from further shock and are ill-prepared for the next wave of innovation and automation.
“Global competitiveness will be more and more defined by the innovative capacity of a country," said Mr Klaus Schwab, founder and executive chairman of WEF. “Talents will become increasingly more important than capital and therefore the world is moving from the age of capitalism into the age of talentism.
“Countries preparing for the Fourth Industrial Revolution and simultaneously strengthening their political, economic and social systems will be the winners in the competitive race of the future.”