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Singapore crowned world's most competitive economy in 2024

Singapore beats other economies like Switzerland and Denmark, but its stock market index significantly decreases in ranking.

Singapore crowned world's most competitive economy in 2024

Singapore reclaims the top spot as the world’s most competitive economy in 2024, up from fourth place a year ago, according to the International Institute for Management Development (IMD) World Competitiveness Ranking on June 18. 

This is the first time Singapore has been ranked number one since 2020, and has outperformed other economies such as Switzerland and Denmark, says IMD. IMD assesses 67 global economies, over survey data and 164 pieces of statistical data between March and May 2024. 

Singapore ranked high in terms of labour market, attitudes and values, and technological infrastructure, but conversely was less competitive on price, health and environment, and societal framework. 

The country saw improvements in government efficiencies, business efficiency and infrastructure. It also saw improvement in criteria such as the priority that the private sector assigns to attracting and retaining highly skilled talent, the level of motivation of its labour force, and the efficiency of its small and medium enterprises (SME) sector. 

However, real term gross domestic product (GDP) growth per capita declined, total general government debt (as a percentage of GDP) dropped four positions, total health expenditure (as a percentage of GDP) and Singapore’s GINI coefficient (a measure of economic inequality) slightly declined.

Also, there is a significant decrease in Singapore’s standing in the stock market index from 28th to 46th and in its high-tech exports (as a percentage of manufactured exports) from third to 13th. 

IMD finds that the world’s top 10 economies are dominated by smaller economies — a reflection that economic competitiveness is not a question of size.

Rounding up the top 10, Hong Kong improved two positions, moving up to fifth place, while Sweden gained two places to take sixth. The UAE rose three places, taking seventh. Taiwan dropped two positions, falling to eighth place, while the Netherlands dropped to ninth. Norway climbed four positions to return to the top 10. 

Meanwhile, emerging markets are closing the gap in areas of innovation, digitalisation and diversification. Singapore’s neighbours such as Malaysia and Thailand, are also either stable or improving, IMD finds. 

Of all the factors that have the greatest impact on business in 2024, the report found that survey respondents considered artificial intelligence (AI) adoption (55.1%), the risk of a global economic slowdown (52%), and geopolitical conflicts (36.1%) as the top three trends. 

AI adoption is one thing, but its use could well be another. One of the key challenges for companies today is how to implement AI systems that improve efficiency without causing disruption to business activities, the report finds. 

A related challenge is ensuring their chosen AI system’s accuracy, because inaccurate systems lead to inefficiencies and reduced productivity, the report said.

Elsewhere in the survey, while 27% of executives surveyed consider the transition to zero emissions to be an important trend in the short term, just 12.2% highlighted the impact of global warming as relevant.

"We believe the most competitive economies of the future will be those able to anticipate and adapt to this changing global context while simultaneously creating value and well-being for their people. And that will also make them sustainable," said Arturo Bris, Director of the IMD World Competitiveness Center (WCC), which has been behind the annual ranking since its inception in 1989. 

He also said that the major competitiveness challenges for the world's economies in 2024 and beyond were transitioning to a low-carbon and circular economy, being mindful of emerging markets' increasing integration into the world economy, and keeping up with digital transformation.

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