Taiwan became the 12th-most competitive nation, up from 13th place last year because of strong innovation, a report by the World Economic Forum (WEF) showed yesterday.
The Global Competitiveness Report 2013-2014 conducted by the Geneva-based organization rated 148 nations, with Switzerland the most competitive, followed by Singapore, Finland, Germany and the US.
Among Asian nations, Taiwan ranked fourth behind Singapore, Hong Kong and Japan, but it outperformed South Korea and China. Hong Kong was placed seventh, while Japan, South Korea and China ranked ninth, 25th and 29th respectively, the report said.
Countries were evaluated based on 111 factors that fall under 12 main categories — institutions; infrastructure; macroeconomic environment; health and primary education; higher education and training; goods market efficiency; labor market efficiency; financial market development; technological readiness; market size; business sophistication; and innovation.
The report showed that Taiwan’s ranking moved up in four of the main categories — business sophistication and innovation; health and primary education; infrastructure; and goods market efficiency — but downward in two others — macroeconomic environment; and labor market efficiency — Chu Li-hui (朱麗彗), deputy director-general of the Council for Economic Planning and Development’s economic research department, said at a press conference yesterday.
Taiwan’s ranking in business sophistication and innovation was up the most to ninth place from 14th because of increasing cooperation between universities and businesses on research and development, the report said.
The ranking for labor market efficiency fell the most, to 33rd place from 22nd, because of lower flexibility of wage determination and higher redundancy costs, the report said.
“However, lower performance in labor market efficiency may also reflect better protection of workers’ rights in Taiwan,” Chu said.
“In order to enhance its competitiveness, Taiwan will need to further strengthen its institutional framework, whose quality is undermined by some inefficiency within the government and various forms of corruption, and will also need to address some inefficiencies and rigidities in its labor market,” the WEF said in the report.
Chu said the nation is heading in the right direction, but some of the improvements might be slower than in other countries, dragging down the nation’s overall ranking.
Among the 111 factors, Taiwan improved the most in strength of investor protection, easier hiring and firing practices, and less prevalence of trade barriers, while levels of foreign ownership of companies declined the most, Chu said.
She said the government is still looking into the reason for declining foreign ownership of companies.