Taiwan’s global competitiveness climbed one notch to 14th place this year, although the overall scores remain unchanged, in line with the nation’s lackluster economic performance, a World Economic Forum (WEF) report said yesterday.
The WEF annual report assessed the competitiveness of 138 economies based on 114 indicators grouped in three sub-indices.
Taiwan scored 5.28 this year, the same as last year, after achieving small gains in financial market development and technological readiness ratings, the report said.
However, the nation posted modest declines in infrastructure, market size and other evaluation areas, the report said.
Policy instability poses the biggest hurdle for doing business in Taiwan, followed by insufficient innovation capability and inefficient government bureaucracy, the report said.
Other problems include tax regulations, restrictive labor regulations, tax rates and access to financing, the report said.
By contrast, companies have little or no concern about corruption, crime and theft, or poor public health in Taiwan, according to the report.
“Taiwan is an innovation powerhouse and should endeavor to maintain the status by training and attracting talents at the core of the innovation ecosystem,” WEF researcher Thierry Geiger said.
Innovation is crucial for the nation’s export-oriented economy and the government can take steps to encourage entrepreneurship, Geiger said.
This year, Taiwan ranked fourth in the Asia-Pacific region behind Singapore, Hong Kong and Japan, but ahead of China and South Korea, the report showed.
In this year’s report the WEF called Taiwan “Chinese Taipei,” rather than “Taiwan, China,” for the first time since the organization first released the annual competitiveness report in 2006.
While most Asian countries stalled or retreated in the rankings, India achieved significant improvement from 55th to 39th, the report showed.
Switzerland remained the most competitive nation for an eighth consecutive year, ahead of Singapore and the US in the WEF rankings, while the Netherlands overtook Germany to take the fourth spot.
The report voiced concerns that declining openness is threatening growth and prosperity, while monetary stimulus measures, such as quantitative easing, are not enough to sustain growth.
“Near-zero or negative interest rates have left little further scope for traditional monetary policy and delivered mixed results in spurring growth,” the report said.
An increasingly important element of competitiveness is creating an enabling environment for innovation, it said.
Innovation has to go hand-in-hand with openness and economic integration, it added.
The National Development Council is coordinating public and private funds to encourage industrial upgrades and innovation. The Financial Supervisory Commission is urging local lenders to help support innovation.
This and other measures aim to mitigate the pain caused by China’s economic rebalancing on local manufacturers, as Beijing is cutting dependence on exports from Taiwan.
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