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Singapore was number one for the second year in a row. In second to fifth place, in order, came: Denmark, Switzerland, the Netherlands and Hong Kong SAR. 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.

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.”

The top three’s different recipes for success

Factors behind Singapore’s success are its strong economic performance which stems from robust international trade and investment, employment and labor market measures.

Stable performances in both its education system and technological infrastructure – telecommunications, internet bandwidth speed and high-tech exports – also play key roles.

Denmark, in 2^nd, can credit a strong economy, labor market, and health and education systems. In addition, the country performs very well in international investment and productivity, and topped Europe in business efficiency.

Switzerland has been gradually edging towards a podium position, from 5^th to 4^th and now 3^rd in 2020. Robust international trade fuels its strong economic performance, whilst its scientific infrastructure and health and education systems show steadfast displays.

The number of small economies – broadly defined as such by their GDP –  in the top ten is striking. However, this is not to say that we are seeing a triumph of democracies. Singapore, Hong Kong and the UAE remain in the top ten, whilst some democracies (such as Argentina) sit at the bottom of the scale.

This year, new criteria were added to reflect the importance of achieving the UN Sustainable Development Goals. The criteria provide a perception of where the economy stands with respect to different sustainable goals that need to be satisfied in 10 years, such as education and the environment, inclusion and empowerment, ageing and health.

Setbacks for some

For the second year in a row, the USA failed to fight back having been toppled from its number one spot last year by Singapore, and coming in at 10^th (3^rd in 2019). Trade wars have damaged both China and the USA’s economies, reversing their positive growth trajectories. China this year dropped to 20^th position from 14^th last year.

While Hong Kong SAR came in at 5^th, this is a far cry from 2^nd which it enjoyed last year. The decline can be attributed to a decline in its economic performance, social turmoil in Hong Kong as well as the rub-on effect of the Chinese economy. However, the 2020 rankings do not pick up on events in from the last couple of months.

The UAE also falls from 5^th to 9^th. The Middle East struggled as a region, reflecting the oil crisis.

Lithuania drops to 31st place in global competitiveness ranking