Study shows US losing its edge and suggests future belongs to Asia
By
Matthew Thompson
Singapore has topped a new study of global innovation and competitiveness, which shows the United States rapidly losing its edge and suggests the future belongs to Asia. -- ST PHOTO: DESMOND FOO
SINGAPORE has topped a new study of global innovation and competitiveness, which shows the United States rapidly losing its edge and suggests the future belongs to Asia.
The survey, carried out by a non-partisan research group, Information Technology and Innovation Foundation, places the US at No. 6 with an overall score of 63.9 out of 100, almost 10 percentage points behind Singapore's top score of 73.4.
The results, released yesterday, contradict many similar research papers which in recent years have confirmed America's position at the top. But its authors suggest the US is now trading on past reputation, not current reality.
And ominously for America, it scored bottom out of 40 countries when the study measured the amount of progress made over the last decade.
China topped that ranking, closely followed by Singapore, although in China's case, the authors say its low starting point means it still has a long way to go.
But they add: 'Overall, these trends suggest that absent concerted public sector efforts by the US and Europe to boost innovation and competitiveness, that this century will not be the Atlantic century but, rather, the Pacific century, or perhaps more accurately, the South-eastern Asian century.
'Like an ageing sports dynasty that...blithely ignores the rising performance of younger teams, many in the US still persist in believing that the US is No.1 and that it is its destiny to remain so almost regardless of what it does.'
The authors say this is dangerous in a world where 'many nations no longer compete principally on low costs, but... innovation and knowledge as they seek to create, grow and attract high value-added firms'.
One of the areas in which the contrast is striking is in the relative levels of science and technology researchers - what the study calls 'key drivers of innovation' - in the various countries studied.
Although by 2006 the US still ranked No. 4 - one place behind Singapore - it was falling behind.
At the same time, the authors say: 'A few nations such as South Korea and Singapore that had relatively high levels of researchers...made rapid progress, increasing by approximately 70 per cent.'
Over the same period, Singapore increased its level of corporate investment in research and development by more than a third, compared with a decrease of 5 per cent for the US. The Republic also has the second-highest level of government investment in R&D.
When it comes to the level of venture capital, an important source of financing for young firms, the report says generally the US is still ahead of Asia.
But it adds: 'Two exceptions are South Korea and Singapore, with investments 35 per cent more than in the US.'
It is a similar story with entrepreneurship, 'a benchmark of economic dynamism'.
As measured by the percentage of new firms among the total, Singapore and South Korea lead the world with 19 per cent, partly reflecting 'both nations' commitment to spur high-technology development'.
And the US is clearly slipping in this area, with just 5.3 per cent growth of new firms over the period studied compared with Singapore's blistering 47.1 per cent.
The report threw up what its authors say was a surprise when they looked at corporate investment in IT, 'the principal driver of productivity growth in most nations', and found that China led the world, with the US coming in a close second.
'Japan, South Korea and Singapore - nations with explicit national digital transformation strategies - rank right behind the United States,' they add.
Meanwhile, Singapore remains well ahead of the pack when it comes to ease of doing business, scoring 38.8 compared with second-placed America's 29.2.
It also recorded the second-highest level of foreign direct investment, was the world No. 2 in terms of gross domestic product per working-age adult, at US$77,523 (S$118,400) compared with America's US$83,422, and is among a number of Asian nations making 'rapid progress' in increasing productivity.
One area in which Singapore did not do so well was e-government, which the study says is important as it makes it easier for citizens and businesses to get things done.
In this area, Singapore received an average score, coming in far behind the US, and actually registered a 6 per cent decline between 2005 and last year.
