Australia’s competitiveness in the Asia Pacific region

08 Jul 2020

Tags

  • Edmund Tang

Australia’s competitiveness – a key metric for international investors – remains stable, according to an annual survey compiled by the Institute for Management Development (IMD). Based in Switzerland, the IMD is one of the world’s most prestigious business schools and its rankings are highly regarded.

The IMD’s World Competitiveness Yearbook 2020 shows Australia retained its 18th spot this year, having gained three places since 2017. While a global 18th spot appears moderate, Australia scores an impressive fourth place among countries in the Asia-Pacific region.

The IMD’s competitive rankings compare how countries compare across a range factors. These include openness to trade and investment, the state of labour markets, and the quality of infrastructure – such as bandwidth speeds and technology access.

Australia performed particularly well among medium-to-large countries. Omitting countries with populations of less than 20 million, Australia achieved a fifth-place global ranking – just behind Germany and ahead of UK.

The IMD rankings are typically stable. Over the last five years. Australia’s global ranking has fluctuated narrowly between 17th and 21st place.

High performance in Asia-Pacific

Australia’s performance within the Asia-Pacific region is particularly impressive. Compared to Australia’s 18th place, South Korea ranked 23rd, Malaysia 27th, Thailand 29th and Japan 34th. Australia also outperformed the so-called BRICS grouping, with Brazil ranked 56th, Russia 50th, India 43rd, China 20th and South Africa 59th.

The annual global survey suggests Australia has a number of strengths. Categories where Australia achieved a high global ranking include:

  • 1st, for ‘Country Credit Rating’ and ‘Mobile Broadband Subscribers’
  • 2nd, for ‘State Ownership of Enterprises’ and ‘Universal Health Care Coverage’
  • 4th, for ‘Investment in Telecommunications’
  • 5th, for ‘Justice’.

Australia’s workforce is also highly rated, gaining 6th spot in two categories: ‘Finance Skills’; and ‘Human Development Index’.

Singapore retains pole position

Elsewhere, Singapore retained the world’s top ranking for the second year in a row. Hong Kong dropped from the second to fifth place, after being overtaken by Denmark, Switzerland and the Netherlands.

The 2020 results showed small countries performing particularly well. Denmark (2nd) improved its position, on account of its labour market, and health and education systems. Switzerland (3rd) owed its improved place to strong international trade and scientific infrastructure – as well as its health and education systems.

This year’s rankings also show a number of countries in Asia performing less well. The region's largest economy, China, fell six places from 14th last year to 20th this year. Malaysia, Thailand, Indonesia and Japan also saw their rankings slip. (See Table below).

IMD World Competitiveness Ranking, 2019 and 2020

Ranking with Population < 20 million Economy Global Ranking in 2019 Global Ranking in 2020 Ranking Change
1 Singapore 1 1 0
2 Denmark 8 2 6
3 Switzerland 4 3 1
4 Netherlands 6 4 2
5 Hong Kong SAR 2 5 -3
6 Sweden 9 6 3
7 Norway 11 7 4
8 UAE 5 9 -4
9 Ireland 7 12 -5
10 Finland 15 13 2
11 Qatar 10 14 -4
12 Luxembourg 12 15 -3
13 Austria 19 16 3
14 Iceland 20 21 -1
15 New Zealand 21 22 -1

 

Ranking with Population > 20 million Economy Global Ranking in 2019 Global Ranking in 2020 Ranking Change
1 Canada 13 8 5
2 USA 3 10 -7
3 Taiwan 16 11 5
4 Germany 17 17 0
5 Australia 18 18 0
6 UK 23 19 4
7 China 14 20 -6
8 Korea 28 23 5
9 Saudi Arabia 26 24 2
10 Malaysia 22 27 -5
11 Thailand 25 29 -4
12 France 31 32 -1
13 Japan 30 34 -4
14 Spain 36 36 0
15 Poland 38 39 -1

Note: The rankings are part of the Switzerland based IMD’s World Competitiveness Yearbook 2020, which compares and ranks 63 countries based on more than 340 business competitiveness criteria. Two thirds of the criteria are based on statistical indicators taken from 2019 results, and one third is based on a survey of more than 6,000 international executives conducted in March/April this year. CEDA is the Australian partner for the yearbook.

Source: Institute for Management Development (IMD), World Competitiveness Rankings 2020