SINGAPORE - The Republic has reclaimed the No 1 spot in Asia for overall competitiveness, inching past former titleholder Hong Kong after three years, according to the 2014 IMD World Competitiveness Yearbook.
In global rankings, Singapore edged up two notches to rank third, behind the US and Switzerland. Hong Kong came in fourth, 0.637 point behind Singapore.
Said IMD: "Small economies such as Switzerland, Singapore and Hong Kong continue to prosper, thanks to exports, business efficiency and innovation."
In 2010, Singapore took the top spot globally, followed by Hong Kong and the US. Since then, Hong Kong has fared better than Singapore, until this year.
While IMD's latest finding did not surprise many, economists here cautioned against complacency and overlooking competition from the region and beyond.
"With Malaysia (No 12), Japan (21) and Indonesia (37) all making gains in IMD's 2014 ranking, and committing to improve their infrastructure, policymakers here should be mindful that these countries will just need incremental reforms to climb the ranks," said CIMB economist Song Seng Wun.
He cited the development of the Singapore-Kuala Lumpur (KL) high-speed rail. While this will benefit Singapore, it will also enhance KL's competitiveness and status as a viable alternative to do business in.
"Developed economies such as Europe and the US are also recovering, and this presents an abundance of business opportunities.
Business costs there are likely to be lower, labour cheaper, and workers generally more hungry for work - all of which are factors that will make them more attractive," Mr Song said.
OCBC economist Selena Ling said Singapore did well despite the domestic challenges of a tight labour market and elevated operating cost environment.
In fact, Singapore came in first globally for having an image abroad that encourages business development, according to a survey of executives based here.
Executives in Germany (No 2) and Ireland (3) were also found to be bullish about their countries' overseas image, while those in the US (24) were "far gloomier" about theirs, possibly due to "international conflicts and domestic political gridlock", said IMD.
Nonetheless, it sees the reign of the US as a reflection of its resilient economy, better employment numbers, and dominance in technology and infrastructure.
IMD's report also included measures of each country's government efficiency, economic performance, business efficiency and infrastructure, which collectively determined its competitiveness.
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