For six years running, Singapore was ranked the second-most competitive economy in the world by the World Economic Forum (WEF), right behind Switzerland.
But the Republic took a tumble in the leaderboards in a new report released today that measures how inclusive and equal countries' economic performance is. Switzerland fell to third place behind Norway and Luxembourg among 30 advanced economies.
While the traditional rankings prized performance in categories Singapore gets top marks in - such as higher education and training, and goods market efficiency - the new index has indicators that measure how well economic performance translates into social inclusion, such as asset building and entrepreneurship, employment and labour compensation, and fiscal transfers.
The new yardsticks come a day before world leaders converge in Davos for an annual meeting in the Swiss town, and are part of the WEF's call to governments to shift their economic policy priorities to respond more effectively to the insecurity and inequality that accompany technological change and globalisation. This means countries that prioritise widespread enjoyment of the fruits of economic growth rank higher than under the old gross domestic product-prioritising competitiveness model.
Rounding out the top five are Iceland and Denmark, which were ranked 27th and 12th respectively under the old model.
Singapore did not receive an overall rank because of missing data, said the WEF, although average scores put it around eighth place.
It topped two of the 15 categories judged: health services and infrastructure, and how easy it is for businesses to raise capital. But it scored near the bottom in three areas: access to education and skills, how concentrated wealth is, and social welfare.
While it did well in primary enrolment and has no gender gap in education, the island scored poorly relative to other advanced economies in the average number of years of schooling that Singaporeans get.
Its score was equally dismal in the numbers enrolled in technical and vocational schools.
The issues are inter-related, said National University of Singapore (NUS) sociologist Paulin Straughan, who noted that aspirations and test scores have risen faster than the number of university places here.
Historical reasons have also led to a large gap in wages between white- and blue-collar jobs that push people away from becoming plumbers and carpenters, she added.
"Over time, our society has developed a hierarchy of jobs and of pay, where we underpay the skills-oriented kind of vocation and overpay the other segments," she said.
Singapore also lagged behind in a category that measures how far a country is from becoming a rentier society, through yardsticks such as the gini coefficient, competitiveness of local markets, and whether there is a banking monopoly. In this area, Singapore ranked 22nd out of the 30 advanced economies.
But a low ranking here is not necessarily trouble as what matters is that small and medium-sized enterprises can survive and wage earners can make a decent living, said NUS sociologist Tan Ern Ser. "There is a need to ensure social justice without harming the incentive for work and doing business," he said.
The WEF also proposed a set of key performance indicators that it said gives "a more complete picture of national economic performance" than from GDP alone, particularly if the ultimate goal of development is sustained and well-rounded advancement of living standards rather than just greater production of goods and services.
In this Inclusive Development Index, a country's GDP per capita is just one of 12 indicators alongside others such as the dependency ratio, poverty rate and adjusted net savings. Countries that scored much better on this index include Cambodia, the Czech Republic, New Zealand, South Korea and Vietnam.
Those that fared badly include traditional economic powerhouses such as the US and Japan, as well as Brazil, Ireland and South Africa.
The report noted that while the past few years have seen a worldwide consensus emerge on the need for more inclusive growth, there is still more talk than action.
"This report seeks to help countries and the wider international community practise inclusive growth and development by offering a new policy framework and corresponding set of policy and performance indicators for this purpose," it said.