Singapore has overtaken the United States as the most competitive economy in the world.
Every year the World Economic Forum (WEF) releases its benchmark Global Competitiveness Report that looks at 98 indicators across 140 countries to determine the overall ranking. Each indicator uses a scale from 0 to 100, to signify how close an economy is to the ideal state or “frontier” of competitiveness. Those indicators are then organised into 12 pillars, such as health, skills, financial system, infrastructure, and institutions. It uses surveys as well as official government and statistical data.
The report is then used as a tool by over 100 of the world’s leading companies and 100 international, civil society and academic organisations to see how they can make the economy, workforces, and businesses more productive and integrate equality and inclusion into the new economy, aiming to reach 1 billion people with improved economic opportunities.
According to WEF, Singapore comes out on top with a score of 84.8, +1.3 from last year, while the US is in second place with 83.7, -1.9 since 2018. Hong Kong came in third while the Netherlands came in 4th, and Switzerland 5th. The UK has slipped to ninth place, in part due to Brexit.
Singapore’s subindex rankings shows it has improved across most indicators:
The WEF said that while rising trade tensions, such as the ongoing US-China trade war as well as Brexit, is “fuelling uncertainty,” some countries are “benefiting from the trade feud through trade diversion” — Singapore and even Vietnam, which ranked 67th and is the most improved country in this year’s index.
The group also warned that “the global economy remains locked in a cycle of low or flat productivity growth despite the injection of more than $10 trillion by central banks.”
“What is of greatest concern today is the reduced ability of governments and central banks to use monetary policy to stimulate economic growth. This makes it all the more important that competitiveness-enhancing policies are adopted that are able to boost productivity, encourage social mobility and reduce income inequality,” said Saadia Zahidi, head of the centre for the New Economy and Society at the World Economic Forum.
However, while the US-China trade war gave Singapore the edge to overtake the US, the United States topped the charts across some key areas — it was the only country among G7 economies that features in the top 10 on the ease of finding skilled employees. It also ranked first when asked how the legal frameworks in their country are adapting to digital business models.