A new study from The National Bureau of Economic research in New York shows, that Singapore beats almost all countries, when it comes to national competitiveness. Only a few European countries, among them Sweden, Finland and Denmark do better than Singapore.
The four scientist behind the study, Mercedes Delgado at Temple University, Christian Ketels and Michael E. Porter at Harvard and Scott Stern at MIT, has measured 134 countries on three broad and interrelated drivers of foundational competitiveness: social infrastructure and political institutions, monetary and fiscal policy, and the microeconomic environment.
Coming in as sixth on the list, Singapore beats countries as Norway, Germany and The United States. The latter only number 20 on the list.
It will maybe surprise some, that neither China, India nor Thailand are among the top 30 nations. But according to this study competitiveness is not only about low cost.
“The naïve interpretation of competitiveness as low costs, especially low wages, is clearly misguided if prosperity is the policy objective. Similarly, unit labor costs can be in line with sustainable external balances at many different levels of prosperity and economic performance.
They provide a relevant diagnostic for the functioning of specific markets, but do not constitute a root cause of competitiveness that underpins economic performance.”
They further state that it is not low absolute level of wages, which makes countries like India, Malaysia, China and Singapore attractive, but low wages relative to their foundational competitiveness.