The new tool maps the competitiveness landscape of 140 economies through 98 indicators organized into 12 pillars. For each indicator, using a scale from 0 to 100, it indicates how close an economy is to the ideal state or “frontier” of competitiveness. When combining these factors, the average score for the world is 60, 40 points away from the frontier.
Out of the 12 pillars, Vietnam made progress in just four (ICT adoption, Health, Labor market, Market size), stood still in one (Macroeconomic stability), and slipped in seven (Institutions, Infrastructure, Skills, Product market, Financial system, Business dynamism, Innovation capability), according to the index report released by the WEF on October 17.
In Southeast Asia, Vietnam ranks behind Singapore ((2nd), Malaysia (25th), Thailand (38th), Indonesia (45th), the Philippines (56th), but before Cambodia (110th), and Laos (112th).
With a score of 85.6 out of 100, the United States is the country closest to the frontier of competitiveness. Singapore ranks second in the overall rankings (score of 83.5), with openness as the defining feature of this global trading hub and one of the main drivers of its economic success.
Besides Singapore and Japan, Hong Kong SAR (7th) is the third economy from East Asia and the Pacific region in the top ten, confirming the widely held view that overall growth momentum in the region is set to last.
According to the report, which in 2018 uses a brand new methodology to fully capture the dynamics of the global economy in the Fourth Industrial Revolution, many of the factors that will have the greatest impact in driving competitiveness in the future have never been the focus of major policy decisions in the past. These include idea generation, entrepreneurial culture, openness, and agility.
“Embracing the Fourth Industrial Revolution has become a defining factor for competitiveness. With this Report, the World Economic Forum proposes an approach to assess how well countries are performing against this new criterion. I foresee a new global divide between countries who understand innovative transformations and those that don’t. Only those economies that recognize the importance of the Fourth Industrial Revolution will be able to expand opportunities for their people,” said Klaus Schwab, founder and executive chairman of the WEF.
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