The World Economic forum released their 2011 Global Competitiveness Report this week. The 544 page report provides a glowing picture of the competitiveness of the Singapore Economy (ranked 2nd globally, after Switzerland) and some rich insight into Singapore’s less than glowing performance on the 12th pillar to Competiveness, Innovation.
This is what the Global Competitiveness Report 2011 had to say about Singapore:
“Singapore moves up by one place to 2nd position, maintaining the lead among Asian economies. The country’s institutions continue to be assessed as the best in the world, ranked 1st for both their lack of corruption and government efficiency. Singapore places 1st and 2nd, respectively, for the efficiency of its goods and labor markets and leads the world in terms of financial market development, ensuring the proper allocation of these factors to their best use. Singapore also has world-class infrastructure (3rd), with excellent roads, ports, and air transport facilities. In addition, the country’s competitiveness is reinforced by a strong focus on education, providing individuals with the skills needed for a rapidly changing global economy. In order to strengthen its competitiveness further, Singapore could encourage even stronger adoption of the latest technologies (10th) as well as measures that support the sophistication of its companies (15th).”
So how does Singapore Perform versus the rest of the world on Innovation and Business Sophistication factors?
Singapore ranks an overall 11th on Innovation & Sophistication, behind Asian rivals Japan and Taiwan.
Innovation and Business Sophistication is measured by looking at 7 pre-cursors to Innovation, namely:
Capacity for Innovation, Quality of scientific research institutions, Company spending on R&D, University-industry collaboration in R&D, Government procurement of advanced technology products, availability of Scientists and Engineers and number of Patents granted in 2010 per million population.
Singapore scores best on Government procurement of advanced technology products (ranks 2nd globally) and performs poorest on Capacity for Innovation (ranking 22nd in the world in 2011, falling 5 places versus 2010).
If Singapore seeks to eclipse Switzerland as the world’s most competitive economy then some strides will need to be made on Capacity for Innovation, where Singapore is 20 positions behind Switzerland! Here the rest of Asia has made good improvements over the past year with countries such as Korea and Malaysia having overtaken Singapore on this key measure.
The Global competitiveness report puts the importance of Innovation in perspective: “Although substantial gains can be obtained by improving institutions, building infrastructure, reducing macroeconomic instability, or improving human capital, all these factors eventually seem to run into diminishing returns. In the long run, standards of living can only be enhanced only by Innovation.”