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Singapore dislodges US as world's most competitive economy

Singapore Business Review logo Singapore Business Review 9/10/2019 Staff Reporter
a group of people in front of a body of water: Singapore dislodges US as world’s most competitive economy © Provided by Charlton Media Group Singapore dislodges US as world’s most competitive economy

It ranked first in infrastructure, health, and labour, but could still improve in innovation.

Singapore jumped 1.3 points to take the crown of world's most competitive economy from the US in 2019 with a score of 84.8 points, according to the World Economic Forum's (WEF) 2019 Global Competitiveness Index.

US bowed out from the top spot as its score dropped 2 points to 83.7. Despite dropping one position WEF said that it remains an innovation powerhouse, ranking 1st for business dynamism and 2nd for innovation capability. Hong Kong jumped four places to become the world's third most competitive economy, followed by the Netherlands and Switzerland.

Also read: Here's what kept Singapore from being the most competitive country in the world

Singapore ranked first in terms of infrastructure, labour market functioning and financial system development. It also achieved full marks (100) to top health, and achieved a near-perfect score (99.7) for macroeconomic stability. It score on every pillar is between 4 and 19 points higher than the OECD average.

But WEF noted that the country could still improve its innovation, as Singapore still falls 15 points short of the ideal score for innovation capability.

"In order to become a global innovation hub, Singapore will need to promote entrepreneurship and further improve its skills base," the report noted.

The island also ranked 2nd for the quality of public institutions with a score of 80.4, behind Finland, but its performance is undermined by limited checks and balances (65.9, 23rd). Notably, WEF said that Singapore ranked 124th on the Freedom of the Press Index. Singapore was also hit with a 63.5 score for its lack of commitment to sustainability, ranking 66th overall.

East Asia and the Pacific is identified as the most competitive region in the world, followed by Europe and North America. Hong Kong and Japan also feature in the top 10 at 3rd and 6th, respectively. Vietnam is a country whose score improved the most globally, jumping 10 places to 67th place. But WEF noted that it is also home to economies with significant competitiveness deficits such as Cambodia and Laos, who placed at 106th and 133th respectively.

On a yearly basis global competitiveness improved by 1.3 points, driven mainly by the increase in information and communication technology (ICT) adoption. WEF calls the pace of improvement "modest" as there is still a 40-point gap to bridge.

A large gap remains in health and macroeconomic stability. "Advanced economies perform consistently better than the rest of the world, but overall, they still fall 30 points short of the frontier," the report read. On the innovation capability pillar, their average gap is over 40 points.

Sub-Saharan Africa's Chad ranked last amongst the 141 countries, followed by Yemen, the Democratic Republic of Congo, Haiti, and Mozambique.

Global performance on product market slipped 0.6 points compared to 2018, which WEF said reflected the rise in international trade tensions—which reduce the markets that countries can access.

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