From a global perspective, Denmark’s economy, for the first time in the history of the ranking, is the most competitive for 2022. It is followed by economies such as Switzerland (previously at the top in 2021), Sweden ( 2nd in 2021) and the United States. .
Singapore Economy Ranks 3rd in competitiveness, according to the latest International Institute for Management Development (IMD) Global Competitiveness Ranking report. In 2021, its economy took the 5e position, whereas the previous year it was in first place.
ASEAN neighbors Malaysia, Thailand, Indonesia and the Philippines are respectively ranked 32n/a33rd44eand 48e. Meanwhile, its economic counterpart, Hong Kong, takes 5e spot, recovering from his previous 7e position in 2021. Vietnam is not included in the ranking, while India takes the 37e place.
For context, the IMD report analyzes and ranks economies based on how the government manages its skills and policies in areas such as economy, government, business and infrastructure to achieve value creation at term, comprising 333 competitiveness criteria that go beyond the areas of gross domestic product (GDP) and productivity levels. The most competitive economy has a score of 100.
With this in mind, through a global lens, Denmark’s economy, for the first time in the history of the ranking, is the most competitive for 2022. It has been revealed that over the years Denmark has improved from its lowest position of 15e in 2001, at 13e in 2010, 6e in 2016, and 2n/a in 2020. The European economy is followed by economies such as Switzerland (previously leading in 2021), Sweden (2n/a in 2021), and the United States.
In short, the 10 most competitive economies in the world are:
- Denmark (100)
- Switzerland (98.92)
- Singapore (98.11)
- Sweden (97.71)
- Hong Kong (94.89)
- Netherlands (94.29)
- Taiwan (93.13)
- Finland (93.04)
- Norway (92.96)
- United States (89.88)
Explaining Singapore’s recovery in the rankingsanalysts believe it stems from “strong improvements” in criteria such as “national economy” (by which it improved by 15e to the first), “employment” (third of 18e), “public finance” (sixth out of 12e) and “productivity and efficiency” (ninth out of 14e). In addition, Singapore’s economy recorded “slight gains” in “trade legislation” (second from third), “education” (sixth from seventh), as well as a strong performance in “trade international and technological infrastructures”.
That said, it was revealed that Singapore remains in “relatively low positions” on several criteria including management practices (14e), scientific infrastructure (16e) , and health & environment (25e); and “experiences some declines” in the “societal framework” (17e at 22n/a), “labour market” (4e at 12e) and “attitudes and values” (9e at 12e).
If Singapore seeks a higher ranking, analysts say it must:
- Address challenges posed by external economic developments, including global supply chain disruptions as well as high energy and commodity prices;
- Support the economic recovery of sectors that continue to be affected by the COVID-19 pandemic;
- Helping businesses transition to a low-carbon future, and
- Ensure that workers continuously develop new skills and hone existing ones to meet labor demand in growing sectors.
Looking at its Hong Kong counterpart, analysts say its reclaiming a top-five spot can be attributed to its positive progress in the “economic performance” criterion, which includes areas such as “international trade” and “international investment”. However, the economy is experiencing a slight decline in “government effectiveness” despite improvements in the area of “public finance”. Moreover, it remains “relatively weak” in the “societal framework”. For its “business efficiency” criterion, Hong Kong faces an overall decline due to “sharp declines” in the labor market and the attitudes and values criteria.
Its performance on the ‘infrastructure’ criterion remains relatively stable, while posting gains in ‘health & environment’, and declines in ‘education’.
If Hong Kong aims to improve its competitiveness ranking, analysts say it must:
- Control the epidemic, support and revive the economy;
- Navigate through external challenges stemming from the slowing global economic recovery, monetary policy normalization by major central banks and growing geopolitical uncertainties;
- Seize the opportunities brought by the economic development of the Metropolis;
- Further promote innovation and technology, and
- Respond to land and labor growth constraints.
In the report, it was also noted that Thailand “loses the most places” in its “government efficiency” criterion, while Malaysia “experiences the most marked slowdowns” and “loses the most positions” in its criteria “commercial efficiency” and “infrastructure” respectively. Indonesiaon the other hand, “obtains the greatest number of places” for the “infrastructure” criterion.
When it comes to what economies are doing to improve their rankings, analysts find Malaysia should extend regulatory reform initiatives to micro-levels through public-private collaboration; improve technology adoption to increase enterprise-level productivity; accelerate talent development initiatives to keep up with new and emerging employment challenges and build a future-ready workforce, and boost productivity and competitiveness through mindset change and creativity.
Thailand must revive economic dynamism; strengthen the resilience of the public sector; to improve social inclusiveness, drive improved digital capabilities, and establish forward-looking talent management. Whereas Indonesia must prioritize development strategies in the post-pandemic era; overseeing the financial sector to play a more active role in credit growth; encourage the effective implementation of regulations that create competitiveness; strengthen policy in the health and education sectors as future sources of competitiveness, and focus on ways to solve the problems of telecommunications and renewable energy.
As for India, it was shared in the report that the economy must manage trade disruptions and energy security; maintain high post-COVID GDP growth; enhance skills development and job creation; dive into strategic divestment and asset monetization, and engage in resource mobilization for infrastructure development.
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