Singapore Overtakes The U.S. To Become The World’s Most Competitive Economy

The World Economic Forum has released its annual Global Economic Competitiveness Report which assesses the drivers of productivity and long-term economic growth across the world. The research was first conducted in 1979 and it benchmarks the competitiveness of 141 economies through 103 indicators (on a scale from 0 to 100) organized into 12 themes to determine how close an economy is to the "frontier" of competitiveness. Innovation capability, health, skills and business dynamism were among the themes taken into account. This year, Singapore has overtaken the United States to become the world's most competitive economy with a score of 84.3 points out of 100.

The city-state performed well across macroeconomic stability, infrastructure, innovation capability and its labor market. Despite the U.S. slipping to second place with 83.7 points of 100, the report states that it remains an innovation powerhouse, ranking first on the business dynamism pillar, second on innovation capability and first for finding skilled workers. Vietnam was a particularly strong performer in the 2019 ranking, jumping 10 places since last year to rank 67th. It has proven one of the major beneficiaries of the ongoing trade war between Washington and Beijing, experiencing a 36% increase in its exports from the U.S. in the first five months of the year.

Asia-Pacific is the most competitive region in the world, followed closely by Europe and North America. The average score across the 141 economies was just 61 points which is concerning given that the global economy faces the prospect of a downturn. The report states that the world is experiencing subdued growth, rising inequality and accelerating climate change which are providing the context for a backlash against capitalism, globalization, technology and elites. Escalating trade and geopolitical tensions are fuelling the uncertainty, holding back investment and increasing the risk of supply shocks: disruptions to global supply chains, sudden price spikes or interruptions in the availability of key resources.

Source : Forbes