High time we stopped worrying about global rankings
We fixate on the quantitative because it is an easier game to play, or at least it was a game we played well. But as the Committee on the Future Economy pointed out, the big prizes are now to be sought in the qualitative: The entrepreneurial mindset, the innovative ethos and the spirit of learning. These call for a different game to be played.
The sky is falling. No, not really. But for a country so accustomed to being ahead of a chasing pack, Singapore’s recent slide down various global competitiveness rankings and tables must surely feel like it. One can imagine the consternation and hand-wringing behind closed doors in government and business circles.
But as our policymakers and industry leaders grapple with how to climb back up the rankings, it is worth reflecting on our obsession with rankings and its implications.
There are three observations we want to make.
One, our obsession with rankings reflects a long-standing emphasis on tangible and measurable key performance indicators (KPIs) such as the ease of doing business, cost competitiveness, attraction of foreign direct investment and talent and so on.
This is explained by the fact that Singapore’s success is defined primarily in material terms. It is natural to tout rankings when we do well in them.
We fixate on the quantitative because it is an easier game to play, or at least it was a game we played well.
But as the Committee on the Future Economy pointed out, the big prizes are now to be sought in the qualitative: The entrepreneurial mindset, the innovative ethos and the spirit of learning. These call for a different game to be played.
Our obsession with the things that can be counted blinds us to other qualities that count but may not register on the rankings we place such importance on.
Two, the over-emphasis on rankings can thwart our attempts to reinvent our economy. Indeed, the focus on and attainment of rankings is a natural outcome of a policy-making ethos defined in terms of “quick wins” and “plucking low-hanging fruit”.
Every KPI can become gamed and eventually, the KPI becomes an end in itself.
The consequence then is that the economy remains firmly stuck in the prevailing albeit disintegrating paradigm as the longer-term strategic goal of fundamental transformation is sacrificed to quick wins in the rankings game.
On the other hand, if we successfully transform our economy along the lines of start-ups, innovation and creativity, we should expect our rankings in the traditional tables to tank in the transition phase. We would then be succeeding in areas for which rankings have not yet been developed.
And finally, our fixation on rankings reveal how we wrongly frame economic development as a zero-sum game. It is not. Just because another economy becomes cheaper or better than Singapore, or both, it does not mean we are worse off. In fact, it may make us better off because that economy can afford to buy more goods and services from us.
As the economist David Ricardo pointed out two centuries ago, what matters is not what our “competitors” do, but what we do. Are we becoming more productive? And are we becoming more innovative?
As long as we are constantly improving on these fronts, it does not really matter that other economies are catching up with us. Our own improvements matter far more than our relative standing in international league tables.
So long as we are still growing the economy — even if it is at a slower rate — businesses will still find it worthwhile to invest here.
While there are a few things which exhibit winner-take-all dynamics (i.e., either we are number one in the region or we are nothing at all), these tend to be the exception to the rule that development is not zero-sum.
Being the sea and air hub of the region, or the financial centre in South-east Asia, are examples of such exceptions; there can only be one regional hub in each of these.
But in these domains, Singapore is still very much ahead of regional competitors. In the main, therefore, focusing on the competition is mostly unnecessary.
To illustrate this last point, consider China’s rapid growth in the last 30 years. This has been the most remarkable story of economic catch-up in the modern age.
Has China’s catch-up been to Singapore’s benefit or detriment? Clearly, it has been the former.
There is an old joke about how a policeman found a drunk man on his hands and knees searching for his lost keys under a street light. When asked by the policeman if he dropped his keys there, the drunk man replied, “No, but this is where the light is.”
If we look away from established and conventional global competitiveness tables and rankings, even the ones we continue to do well in, we might discover new capabilities that need to be developed, and anticipate or even create new areas we could excel in.
This piece first appeared in Today online.