Singapore has been crowned the most open and most competitive economy in the world. But what does that mean? And how can other countries mimic its success?
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In the World Economic Forum’s latest Global Competitiveness Report, Singapore scored 85 points out of a possible 100, placing it above the US, Hong Kong, the Netherlands and Switzerland in the top five. It was awarded more than 90 points in four of the 12 gauges used to rank the 141 countries and scored more than the OECD average in all areas.
“It's the result of a very balanced and strong performance across the pillars,” says Thierry Geiger, Head of Analytics and Quantitative Research, Global Competitiveness and Risks at the World Economic Forum. “They are very close to the ideal state in areas including infrastructure and health.”
What do we mean by ‘competitiveness’?
What is economic competitiveness? The World Economic Forum, which has been measuring countries' competitiveness since 1979, defines it as: “the set of institutions, policies and factors that determine the level of productivity of a country." Other definitions exist, but all generally include the word “productivity”.
The Global Competitiveness Report is a tool to help governments, the private sector, and civil society work together to boost productivity and generate prosperity. Comparative analysis between countries allows leaders to gauge areas that need strengthening and build a coordinated response. It also helps identify best practices around the world.
The Global Competitive Index forms the basis of the report. It measures performance according to 114 indicators that influence a nation’s productivity. The latest edition covered 141 economies, accounting for over 98% of the world’s GDP.
Countries’ scores are based primarily on quantitative findings from internationally recognized agencies such as the International Monetary Fund and World Health Organization, with the addition of qualitative assessments from economic and social specialists and senior corporate executives.
By analyzing more than 100 indicators of competitiveness, the Forum’s work aims to unveil the secrets of the strongest performers and showcase what they’re doing well, encouraging other policy-makers to learn from their peers.
Infrastructure was an area of excellence, with Singapore’s roads, ports and airports placing it top. And it came first for health, with the average person expected to enjoy 74 years of healthy life.
It scores well for financial stability and also for the quality of its public institutions, which come second only to Finland’s.
Even so, there’s some room for improvement – and in particular scope for Singapore to become an innovation hub, improving its business dynamism and developing skills like critical thinking to prepare its workforce for the world of tomorrow. Its lowest scores came for market size and for skills.
Geiger also highlighted freedom of the press as an area for improvement, and he notes that Singapore is a relatively small city-state, which might make reproducing its successes challenging. Even so, there are learnings for other economies looking to climb the ranks.
“Singapore is extremely, extremely well governed,” he says. “Corruption is very low, the public sector is extremely efficient, and the government has a long-term vision, and an ability to change. These are some of the things that could inspire others.”