Singapore has retained its top spot as the world's most competitive economy in the latest edition of the IMD World Competitiveness Ranking.
The Republic held on to the top slot for a second straight year in the annual list of 63 economies, which analyses their ability to generate prosperity.
Making up the top five after Singapore were Denmark, Switzerland, the Netherlands and Hong Kong.
A marked pattern in this year’s results, which are an amalgam of hard data taken from 2019 and survey responses from early 2020, is the strength of smaller economies, the Institute for Management Development (IMD), which is based in Lausanne, Switzerland, said in a statement to The Straits Times on Tuesday (June 16).
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.”
IMD noted that the factors behind Singapore's success include its strong economic performance, which stems from robust international trade and investment, employment and labour market measures.
"Singapore is a small economy with similarities to Denmark and the Netherlands. Its rise to the No. 1 spot was largely driven by the relative ease of setting up business, the availability of skilled labour and its cutting-edge technological infrastructure," IMD said.
Stable performances in both Singapore's education system and technological infrastructure - telecommunications, Internet bandwidth speed and high-tech exports - also played key roles, it said.
Another Southeast Asian country which made it to the top 30 list are Malaysia and Thailand. Tumbled five rungs in the ranking, the Malaysia is now ranked 27th out of 63 countries.
Last year, the report ranked Malaysia the 22nd most competitive economy in the world, the same spot it held in 2018.
The Switzerland-based business school noted Malaysia’s government efficiency ranking dropped six positions to 30th, while business efficiency fell 11 rungs to 29th and infrastructure dropped three spots to 31st.
However, Malaysia’s economic performance ranking improved two spots to 9th.
Economists told StarBiz the IMD report served as a reminder to policymakers of the need to continuously improve on the country’s efficiencies, lest it loses out to countries that are aggressively making improvements.