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SINGAPORE, May 31 — The Republic is the most “digitally competitive” place in the world, based on an inaugural report measuring an economy’s ability to adopt and explore digital technologies leading to transformation in government practices, business models and society in general.
The World Digital Competitiveness Ranking was published today for the first time by Swiss business school IMD, which also released its annual World Competitiveness Yearbook where Singapore moved up a notch to third behind Hong Kong and Switzerland.
The new report — based on 50 criteria, a third of which are new data — saw Singapore placed ahead of Sweden (2nd), the United States (3rd), Finland (4th) and Denmark (5th). Hong Kong, the only other Asian economy in the top 10, was placed 7th.
Indicators for technology and scientific infrastructure are already included in the overall rankings, but the digital competitiveness report introduces several new criteria to reflect an economy’s capacity to understand and learn new technologies, its technology environment and readiness for future developments.
“There is no doubt that supportive and inclusive government institutions help technological innovation,” said Professor Arturo Bris, director of the IMD World Competitiveness Centre.
“Singapore and Sweden have developed regulation that takes advantage of the talent they have by adopting, for instance, regulation that facilitates the inflow of overseas talent which complements the locally available pool.”
Singapore was ranked first in two key areas of digital competitiveness: Knowledge and technology, which include factors such as talent, training and education, regulatory framework and investment in technology. However, the Republic fared less well in future readiness, particularly in business agility where the Republic was ranked 14th.
“The readiness of people and companies to embrace digital transformation and the willingness to change reflect a country’s adaptive attitudes and business agility,” said Prof Bris. “Of paramount importance in the digital ranking are issues related to how adaptive and agile economies are when faced with technological change.”
Economists interviewed by TODAY said the fact that Singapore fared well in the inaugural report was encouraging.
Nevertheless, there is scope for improvement, they added.
ANZ economist Ng Weiwen said: “The top ranking ... is a nod towards Singapore’s efforts to position itself as a financial technology hub.”
But Song Seng Wun, an economist at CIMB Private Bank, added: “People (in Singapore) are not hungry enough, but where we score well is when our regulators and businesses are on the same page.
“The technological framework in a compact city-state like Singapore, compared to large urban areas like Tokyo, London or even California, is more developed.”
In the separate 2017 IMD World Competitiveness ranking, which has been published annually since 1989, Hong Kong took the top spot for the second year running. Singapore, which was fourth last year, overtook the US for third place.
The study, which looks at data between January and April, reflected negatively on the US’ competitiveness — in particular, the monetary policy, exchange rate and protectionist stance of Donald Trump’s administration, Prof Bris noted.
Hong Kong scored first overall in both government and business efficiency, but fared relatively poorly in infrastructure (20th) and economic performance (11th). In contrast, Singapore was placed third in government efficiency but only managed 10th place in business efficiency — dropping five points from the previous year.
In infrastructure and economic performance, the Republic was seventh and sixth, respectively.
Singapore’s tightening labour market, redundancies in the workforce, quality of training and employee remuneration were significant factors in the decline in business efficiency, Prof Bris said.
Ng stressed that Singapore should not rest on its laurels.
Referring to the Manpower Ministry’s wage report released yesterday, which showed that wage growth continues to outpace productivity, he said: “We need to see productivity go up to justify wage growth as the Singapore dollar has not weakened materially — this may lead to risks to our international competitiveness.” — TODAY