Alarm bells might be ringing now that Singapore has slipped one spot to No. 4 in this year's global competitiveness ranking by Switzerland's IMD World Competitiveness Centre, after two straight years at No. 3.

The Republic has always prided itself on being an open economy and an attractive place for doing business. And the sting of falling one spot may be sharper for the fact that Hong Kong, one of Singapore's closest rivals, has taken the No. 1 spot, up from No. 2 last year.

Is this a cause for concern? On the surface, it appears so as almost everyone else in the top five improved in the ranking, apart from the United States, which fell two spots from No. 1 last year.

OCBC economist Selena Ling said the fact that another small open Asian economy - Hong Kong - has outdone the US and Switzerland, means Singapore's slide was not entirely driven by external factors such as the softer global economy.

There are deeper issues suggesting the Republic cannot tackle structural challenges that the economy faces, including high business costs and manpower woes. Those are matters the Committee on the Future Economy will look into.

Observers, however, note that Singapore retains an enviably high competitiveness ranking, and it continues to be ranked favourably across different surveys.

CIMB Private Banking economist Song Seng Wun said: "These rankings by various organisations normally see Singapore and Hong Kong at the top, as far as competitiveness goes.

"The governments on both sides continue to see where they can improve. The competition will never go away, and the two city-states have their own strengths - it's about what areas and business people want to focus on."

All told, Singapore remains in the ranking's top four most competitive economies, and the committee is already looking at ways to steer our future in the best direction.

With smart planning, this ranking slide will be no more than a blip.