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Taiwan ranks 15th in the WEF Global Competitiveness Report 2015

According to “the Global Competitiveness Report 2015-2016” from the 140 countries rated, Taiwan ranks 15th, one place down on last year, and 4th in Asia, behind Singapore (2nd), Japan (6th), and Hong Kong (7th), and ahead of Malaysia (18th), Korea (26th) and Mainland China (28th).

Source: WEF Global Competitiveness Report, various editions.

Amongst the three main competitiveness indexes, Taiwan’s ranking for “basic requirements” was 14th, the same as last year, “efficiency enhancers” improved one place to 15th, while “innovation and sophistication factors” fell by 3 places to 16th compared to the previous year.

  1. Basic requirements: 14th place, the highest ranking since the WEF first released its competiveness rankings in 2006

 “Basic requirements” index has four pillars, of which Taiwan’s ranking for “macroeconomic environment” rose by an impressive 10 places to 13th, the category showing the most improvement; ranking for “institutions” was 27th, same as the year before; Taiwan ranked 12th for “infrastructure” and 14th for “health and primary education”, both showing a fall of one place on the year before.

(1)Macroeconomic Environment: The substantial improvement in the ranking for “macroeconomic environment” was mainly due to the impressive improvements in government budget balance (60th, up by 20 places) and general government debt (56th up by 8 places), showing that the government’s efforts to promote the Fiscal Reform Plan have clearly paid off.

(2)Institutions: The ranking for institutions is the same as the previous year, however the indicators of burden of government regulation (20th, up by 14 places) and efficiency of legal framework in challenging regulations (63rd, up by 12 places) show great improvement.

(3)Infrastructure: The ranking for “infrastructure” fell by one place to 12th, mainly due to a fall of four places in the ranking for quality of railroad infrastructure; however, Taiwan’s ranking for quality of air transport infrastructure rose by 10 places to 26th.

(4)Health and primary education: The ranking for “health and primary education” fell by one place to 14th, mainly due to a fall of one place for indicators such as the HIV prevalence and life expectancy.

2. Efficiency enhancers: up by one place on the previous year from 16th to 15th

“Efficiency enhancers” index has six pillars, of which Taiwan’s ranking for “labor market efficiency” rose by 10 places to 22nd, and made the greatest progress; financial market development (17th) and technological readiness (28th) showed a rise of one and two places respectively;   the ranking for both higher education and training (14th) and goods market efficiency (13th) fell by two places; the ranking for market size fell by three places to 20th.

(1)Labor market efficiency: The ranking for labor market efficiency showed a rise of 10 places mainly due to effect of taxation on incentives to work (21st, up by 28 places) and increase in women in labor force (79th, up by 10 places).

(2)Financial market development and Technological readiness: The ranking for both showed improvement mainly due to increase in soundness of banks (25th, up by 7 places), increase in number of fixed-broadband Internet subscriptions (16th, up by 14 places) and wide availability of latest technology (36th, up by 13 places).

(3)Higher education and training and Good market efficiency: The ranking for both showed a fall, mainly due to a deficiency in terms of internet access in schools (27th, down by 15 places), prevalence of foreign ownership (49th, down by 17 places), and degree of business impact of rules on FDI (50th, down by 34 places).

(4)Market size: The ranking for market size fell (24th, down by five places) mainly due to the limited size of Taiwan’s domestic market.

  3. Innovation and sophistication factors: Ranked 16th, down by three places on the year before

“Innovation and sophistication factors” index has two pillars, of which Taiwan ranked 11th for innovation, down by one place on the year before. The ranking for “business sophistication” was down by four places to 21st, which is the major factor to cause this category’s rank down.

(1)Innovation: The fall of the ranking for innovation reflects that although Taiwan businesses have widespread capability for innovation (21st, up by 2 places), the government still needs to do more in terms of government procurement of advanced tech products ( 29th, down by 5 places) and availability of scientists and engineers (28th, down by 14 places). A decline in the ranking of innovation shows that the government’s active efforts to promote innovation and entrepreneurship haven’t appeared the effect, so that further active implementation is needed.

(2)Business sophistication: A large fall in Taiwan’s business sophistication ranking reflects that although Taiwan’s industrial clusters rank 5th in the world, the degree for domestic companies to control international distribution channels is relatively low (38th, down by 10 places) and both rankings for local supplier quantity (13th, down by 6 places) and quality (20th, down by 9 places) are decreasing. A downward ranking of business sophistication highlights the importance of enterprise actively connecting to key markets and expanding exports.



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