- POSTED: 22 May 2014 00:02
- UPDATED: 22 May 2014 23:31
Singapore has moved up to third spot in a key global competitiveness study, coming in behind the United States and Switzerland.
SINGAPORE: Singapore has moved up to third spot in a key global competitiveness study, coming in behind the United States and Switzerland.
The republic's ranking improved two notches in the 2014 IMD World Competitiveness survey from the previous year -- thanks to rising exports, business efficiency and innovation.
The annual study conducted by notable Swiss business school IMD covers 60 economies.
The US retained the top spot this year, reflecting the resilience of its economy, better employment numbers, and its dominance in technology and infrastructure.
Hong Kong is the other Asian economy ranked among the top ten -- at fourth spot. Meanwhile, Malaysia ranked 12th, with Taiwan at 13th and Japan at 21st spot.
The IMD study is one of two global competitiveness surveys which are keenly monitored by businesses and policymakers. The other is the World Economic Forum Global Competitiveness Report, which ranks Singapore as the second most competitive economy after Switzerland.
The IMD report uses 338 criteria to determine a country's competitiveness, with two-thirds based on hard economic data like gross domestic product and productivity, and a third on opinion surveys with the local and international business community.
Among the areas Singapore has seen improvements in the overall economy, are its real GDP growth, consumer price inflation and direct investment stocks inward. At the same time, factors that make Singapore attractive include its business-friendly environment, policy stability and predictability, as well as competency of government.
Out of the 60 ranked economies, Singapore was number one in ease of doing business, image abroad and higher education achievement.
However, areas where Singapore fared poorly are in cost of living, coming in 59th, immigration laws (59th) and total public expenditure on education (56th).
"These are elements that come out and tend to pull down our ranking quite a bit,” said Associate Professor Shandre Thangavelu, regional director for Southeast Asia at the University of Adelaide’s Institute of International Trade.
“Going forward, we need to critically focus on these key issues. These are key fundamentals because if the cost of living goes up and then it reflects that there might be an issue of widening wage gap between the top 20th percentile and lower 20th percentile."
Real wage growth seems to be the answer, but the Singapore Business Federation said it has to be accompanied by tangible productivity gains for the country to keep its edge.
"We also need to make sure that we watch our competitiveness relative to our neighbours. I think they are also coming up, but I think it's also a good thing,” said Ho Meng Kit, chief executive of the Singapore Business Federation.
“If they are more competitive, then I think as a region, we become more competitive as a whole. But we have to watch it because it is quite easy for foreign companies to just take their assets here, their business here, and go to another location."
Singapore topped the competitiveness chart in 2010 but slid to third in 2011, fourth in 2012 and fifth in 2013.