Hong Kong No.1 in world competitiveness for second year running

June 01, 2017 14:46
Hong Kong has bagged the title of the world's most competitive economy for the second year running. Arch rival Singapore comes in third. Photo: HKEJ

Hong Kong has been crowned as the world's most competitive economy for the second consecutive year, according to World Competitiveness Yearbook 2017 complied by the Switzerland-based International Institute for Management Development (IMD).

Hong Kong was again ranked first among the 63 economies, followed by Switzerland, Singapore, the United States and the Netherlands. Canada came in 12th, Germany 13th, Taiwan 14th, China 18th, the United Kingdom 19th, Australia 21st, Japan 26th and South Korea 29th. (The full table can be viewed here)

Financial Secretary Paul Chan said the SAR government was delighted to see Hong Kong, after returning to the top position in 2016, was again ranked as the world's most competitive economy this year.

“The government welcomes the IMD's high regard of Hong Kong, which is a clear recognition of our steadfast fiscal discipline, as well as the incessant effort we put into building a favorable business environment and a robust financial system,” he said in a statement Thursday.

The prestigious Lausanne, Switzerland institute assessed each economy on four competitiveness factors, namely, economic performance, government efficiency, business efficiency and infrastructure, each consisting of five sub-factors.

Among the four competitiveness factors, Hong Kong was the world’s No. 1 in government efficiency and business efficiency. The city’s ranking in infrastructure also showed an improvement, climbing slightly from 21st to 20th, but it slid in economic performance from fifth to 11th, generally reflecting Hong Kong’s moderated overall economic growth in 2016 amid external unsteadiness.

The IMD World Competitiveness Center, a research group at IMD business school, has been publishing the annual rankings since 1989 using 260 indicators, about two-thirds of which come from “hard” data such as national employment and trade statistics; and a third from more than 6,250 responses to an executive opinion survey that measures the business perception of issues such as corruption, environmental concerns and quality of life, said IMD in a press release.

“Those high-ranking countries overall have maintained a business-friendly environment that encourages openness and productivity,” said Prof. Arturo Bris, director of the IMD World Competitiveness Center. “If you look at China, its improvement of seven places to 18th can be traced to its dedication to international trade. This continues to drive the economy and the improvement in government and business efficiency.”

Those at the bottom rung of the table, meanwhile, are largely countries mired in political and economic upheaval such as Ukraine (60), Brazil (61) and Venezuela (63).

Digital competitiveness

Nonetheless, Hong Kong trailed arch rival Singapore in IMD’s separate Digital Competitiveness Ranking, which introduced several new criteria to measure countries’ ability to adopt and explore digital technologies leading to transformation in government practices, business models and society in general.

At the top of the ranking were Singapore, followed by Sweden, the US, Finland, Denmark and the Netherlands. Hong Kong was in seventh spot in the sub chart, ahead of the UK, Taiwan, Israel, Australia, South Korea and Japan. China came in 31st.

“There is no doubt that supportive and inclusive government institutions help technological innovation,” Bris said.

“Of paramount importance in the digital ranking are issues related to how adaptive and agile economies are when faced with technological change,” he said.

The bottom five are Indonesia, Ukraine, Mongolia, Peru and Venezuela.

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EJ Insight writer