INSEAD recently undertook a study benchmarking 55 countries worldwide in skills competitiveness. The evaluation parameters were dependent on the supply of skills critical for innovation, competitiveness and sustainability. The report was presented at INSEAD’s Leadership Summit Asia on November 12. The Summit marked the start of the Asia campus’ 10th anniversary celebrations.

In the Asia-Pacific region, Singapore was the clear winner, ranked top in Asia-Pacific and 6th globally Singapore’s continued investments in skills upgrading during the global recession has paid off, with the City-State emerging top in Asia-Pacific and sixth globally in skills competitiveness.

INSEAD eLab Associate Director and co-author of the report, Nils Fonstad said: “The findings show that several Asian economies are competing strongly in skills, with Singapore in the lead. Our research identifies Singapore as a solid leader among the 55 economies as it is above average in skills score, and during the global economic crisis, it became stronger by encouraging workers to upgrade their skills.”

The research assessed a country’s supply of skills critical for competitiveness based on a selection of data related to education, R&D spending and the overall ecosystem of innovation and knowledge management. The source was primarily the World Economic Forum Executive Survey, supplemented by statistics from UNESCO and the World Bank.

Each country’s score is based on the average of 14 variables representing three types of skills – literacy and basic skills, occupational skills and global knowledge economy skills (refer to Appendix A), on a scale of zero to six.

(Apendix A)

Singapore received a score of 5.38, putting it in 6th place globally ahead of other regional economies such as Taiwan (7th, 5.26), Japan (16th, 4.9), Korea (18th, 4.88), Malaysia (21st, 4.66), Hong Kong (25th, 4.34), India (4.32), China (34th, 4.08) and Indonesia (45th, 3.79). Numbers one to five were, respectively, Finland, Denmark, Sweden, Switzerland and the USA.

The INSEAD study is premised on research which found that continuously fostering a strong portfolio of skills is essential to sustained economic growth. Strong skills were found to correlate with GDP per capita, and to be a key factor of global competitiveness for countries.

INSEAD launched the study in 2008 to help governments and business leaders identify and address their national skills weaknesses, focusing on Europe. A special focus on Asia was added this year.

Co- author Bruno Lanvin, Director of INSEAD eLab, stressed that “this report is the latest in a series that eLab has devoted to skills and competitiveness. By focusing on Asian economies, we have obtained a picture which is significantly different from that of Europe:
Asia offers a more contrasted and dynamic skills landscape, by which competitiveness rankings could be significantly re-shuffled in the years to come.”

To help governments and business leaders assess their skills performance, INSEAD grouped the countries into four categories: Solid Leaders, Leaders at Risk, Potential Leaders, and Struggling (see Appendix B).

(Apendix B)

Solid Leaders comprise countries that received above average skills scores and which are getting stronger, in showing improvement in ranking from 2007 to 2009. Singapore falls into this category, along with countries such as Australia, New Zealand, Belgium and Cyprus.

Leaders at Risk comprise countries that are above average, but which are getting weaker in their skills scores. South Korea is the most striking case in this group. Lauded for years as the quintessential “roaring tiger”, South Korea is still one of the strongest countries in the Asia-Pacific in terms of skills. However, it is also the country whose total skills score dropped the most among the 55 countries in the study, by -0.53 points.

This caused South Korea to tumble 12 ranks, from 6 to 18, suggesting that it faces skills issues that other countries may soon be encountering as well. Other economies in the same category include Malaysia, Great Britain, Japan and USA.

Potential Leaders comprise countries that are below average, but which are getting stronger in their skills scores. China, Vietnam and Cambodia were among the countries in this category.

The last category, Struggling, comprises countries that are below average and which are getting weaker in their skills scores. INSEAD identified these as the most vulnerable countries in the sample, which could likely benefit most from rapid and strong measures to develop relevant skills. Hong Kong, whose total skills score fell by nearly -0.40 points, joins Nepal, Pakistan, Mongolia, Philippines, Indonesia, Thailand, and India in this category.

Report co-author Fonstad said,” Countries we traditionally think of as a leader, such as Japan, Korea, Great Britain, have above average skills scores. But when we look at how they changed during the global economic crisis, we realise they may not have invested sufficiently in skills and as a result their leadership in competitiveness is now at risk.”

For more details on the 2010 INSEAD eLab Skills Report, please visit: http://www.insead.edu/facultyresearch/centres/elab/research/economic_tigers.cfm