Singapore slips on competitive economy ranking – and may need to focus on innovation

Singapore has dropped a notch from its previous No.2 spot on a list of the world’s most competitive economies – losing out to the United States this year.

But don’t panic – it still ranks high on the list.

According to a report by the World Economic Forum (WEF) released on Wednesday (Sept 27), Singapore’s economy is now the third most competitive out of 137 countries worldwide.

The lion city also remains the most competitive economy in the region, with a score of 5.71 out of 7 in the Global Competitiveness Report 2017-2018.

Switzerland led the pack for the ninth straight year, with an overall score of 5.86, and was followed closely by the United States (5.85).

The report, which covered 137 countries this year, took 12 pillars of competitiveness into consideration when ranking the countries.

These pillars were health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation.

Room for improvement

The technology frontier is expanding quickly, with recent breakthroughs in self-learning artificial intelligence amongst others.

But WEF reported that when it comes to innovation and business sophistication factors, Singapore continues to “lag behind the world’s most prolific innovation powerhouses”.

Singapore currently ranks ninth in innovation.

To remain competitive in the evolving economic landscape, improving on innovation is essential – as well as ensuring that the country has the capacity to adopt new innovations.

“Societal gains from innovation breakthroughs do not happen automatically: they need complementary efforts to ensure that more people and firms have the means to access and use new technologies”, said WEF.

According to Klaus Schwab, the founder and executive chairman of the WEF,  “global competitiveness will be more and more defined by the innovative capacity of a country“, reported The Guardian.

He added: “Talents will become increasingly more important than capital, and therefore the world is moving from the age of capitalism into the age of talent-ism.”

But it’s not all dismal.

Singapore still “posts an excellent performance across the board”, said the report.

It ranks first worldwide for public sector performance, and leads in areas like higher education and training and superior transport infrastructure.