Singapore becomes the world’s most competitive economy in 2024

Analysis and Rankings

INTRODUCTION

On June 18, 2024, the International Institute for Management Development (IMD) officially recognized Singapore as the world’s most competitive economy 2024, a remarkable achievement that highlights the nation’s strategic progress and resilience. This milestone marks the first time since 2020 that Singapore has reclaimed the number one position in the prestigious World Competitiveness Ranking, surpassing other leading economies such as Switzerland and Denmark. Singapore’s impressive climb to the top is attributed to a combination of factors, including its highly favorable business environment, state-of-the-art infrastructure, and exceptionally skilled workforce. The nation’s ability to attract global talent, promote technological innovation, and foster an environment of transparent regulations and competitive tax policies has solidified its reputation as a global leader. This recognition not only reflects Singapore’s current strengths but also underscores its ongoing commitment to maintaining its status as a thriving economic powerhouse.

Figure 1: Singapore – The World’s Most Competitive Economy in 2024

Factors That Helped Singapore Lead the Rankings

IMD assessed 67 economies worldwide based on 164 statistical indicators and surveys conducted from March to May 2024. The results show that Singapore scored highly in key areas:

• Flexible labor market: Employment policies, compensation, and training programs help Singapore attract global talent.
• Advanced technological infrastructure: The country leads in digital transformation and technology adoption across industries such as manufacturing and finance.
• Favorable business environment: Transparent regulations and competitive corporate tax rates promote investment.

Additionally, Singapore has significantly improved government and business efficiency. A strong focus on innovation and the development of small and medium-sized enterprises (SMEs) has further enhanced its economic competitiveness.

Challenges Facing Singapore

Despite securing the top position, Singapore still faces several challenges:

• High cost of living: This remains a major drawback, making cost competitiveness weaker compared to regional peers.
• Declining high-tech export capacity: Singapore dropped from 3rd to 13th place in the share of high-tech exports in total manufacturing exports.
• Stock market decline: Singapore’s ranking in stock market performance fell from 28th place in 2023 to 46th this year.

However, Singapore has long-term strategies in place to address these issues. The government is implementing policies to support businesses and expand investment opportunities to sustain economic growth.

Figure 2: Singapore – The World’s Most Competitive Economy in 2024

Ranking of Other Economies

Alongside Singapore, the IMD 2024 ranking revealed significant shifts in the standings of various economies:

• Switzerland and Denmark ranked 2nd and 3rd, respectively.
• Hong Kong (China) climbed two places to 5th position.
• The United States dropped to 12th place, losing ground to several Asian economies.
• China maintained its 14th position, driven by high-tech manufacturing expansion.
• Norway rose four places to re-enter the top 10.

The ranking highlights a shift in global economic centers. Smaller, more agile economies like Singapore, Switzerland, and Denmark are outperforming larger but less flexible economies.

Global Economic Trends in 2024

The IMD report identified three major trends influencing global competitiveness in 2024:

• Artificial Intelligence (AI): 55.1% of surveyed economies consider AI a crucial factor for the future.
• Global economic recession risks: 52% of countries express concerns about economic instability slowing growth.
• Geopolitical conflicts: 36.1% of businesses view geopolitical risks as a significant threat to investment environments.

Singapore is aware of these challenges and is proactively investing in AI and innovation to maintain its competitive edge.

CONCLUSION

Singapore’s return to the top of the World Competitiveness Ranking in 2024 reflects its strategic and forward-thinking approach to economic development. This achievement underscores the country’s commitment to creating a robust business environment, fostering technological advancement, and nurturing a highly skilled workforce. Despite facing challenges such as a high cost of living and declining high-tech export capacity, Singapore remains focused on implementing effective policies to address these issues. By investing heavily in innovation, artificial intelligence, and sustainable development, the nation is positioning itself to maintain its competitive edge on the global stage. Singapore’s consistent efforts to enhance government and business efficiency, alongside its support for small and medium-sized enterprises, reinforce its reputation as a dynamic and resilient economy. With a clear vision and unwavering dedication to progress, Singapore is not only overcoming obstacles but also setting a benchmark for economic excellence, ensuring its role as a leading global economic hub for years to come.

(Vn-Industry.)

Source: Compilation

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