Singapore is the most competitive economy for the second year in a row according to IMD’s 2020 World Competitiveness Ranking. Denmark, moving up from 8th last year, and Switzerland close the podium. The number of small economies in the top 10 is striking with only the USA (10th) and Canada (8th) as major economies making it to the top tiers of the list.
The factors behind Singapore’s success can be found in its strong economic performance which stems from robust international trade and investment, employment and labor market measures.
Other factors include stable performances in both its education system and technological infrastructure – telecommunications, internet bandwidth speed and high-tech exports –, which according to IMD, also play key roles.
A strong economy, labor market, and health and education systems are behind Denmark’s 2nd position. In addition, the country performs very well in international investment and productivity, and topped Europe in business efficiency.
Likewise, Switzerland has been gradually edging towards a podium position, from 5th to 4th and now 3rd in 2020. Robust international trade fuels its strong economic performance, whilst its scientific infrastructure and health and education systems show steadfast displays. The Netherlands and Hong Kong SAR close the top 5.
The number of small economies – broadly defined as such by their GDP – in the top ten is striking. Singapore, Hong Kong and the UAE remain as top competitive economies while big powerhouses like China (20th), Germany (17th) or the United Kingdom (19th) can only make it to the top 20.
It is worth noting that while Hong Kong SAR came in at 5th, this is a far cry from 2nd which it enjoyed last year. The decline can be attributed to a decline in its economic performance, social turmoil in Hong Kong as well as the rub-on effect of the Chinese economy. However, the 2020 rankings do not pick up on events from the last couple of months.
Arturo Bris, Director of the IMD World Competitiveness Center and Professor of Finance, says, “The benefit of small economies in the current crisis comes from their ability to fight a pandemic and from their economic competitiveness. In part these may be fed by the fact it is easy to find social consensus.”
Likewise, IMD pointed out in a press release that: “This year’s results show a common pattern in the factors that have influenced the current performance of highly ranked countries. Such a pattern emerges around international trade and investment, employment, the openness of societies, measures related to political stability, and to social and gender equality. Not all economies approach problems in the same way, and this impacts their resilience and agility in the face of changing and difficult circumstances.”