Top marks for Asia’s premier wealth centres
Singapore and Hong Kong have developed into centres of global economic excellence that support innovation and wealth creation
Insead’s annual Global Innovation Index shows Switzerland, Singapore and Hong Kong leading the world as centres of business and wealth creation opportunity.
Switzerland has jumped into the top slot from fourth place last year. Singapore also shot four places up the rankings from seventh to third, leap frogging Hong Kong which fell from third to fourth place this year.
The index, which broadly measures how well an economy supports innovation, ranked 125 countries this year. It measures a host of political, regulatory, business, infrastructure, human resource and technology factors to judge if a country has the necessary “inputs” for innovation. It also considers scientific and creative “outputs” as a measure of innovation. In other words, the index provides a good guide to whether an economy has what it takes to support wealth growth.
Switzerland this year proved a good all-rounder, with solid results for both input and output factors (see Figure 1). Singapore, meanwhile, shot the lights out for all of the headline input factors – ranking first in all categories – but had weaker performance in the output categories. By contrast, the US and the UK reached only seventh and tenth position respectively in the overall innovation rankings.
The results are useful to compare not just how different economies are performing to support home-grown wealth creation. They are also a notable indicator for their effectiveness as international financial centres.
Indeed, among the many sub-variables, investment factors and regulatory factors feature as specific sub-categories of overall innovation.
The investment factors taken into consideration are the strength of investor protection, market capitalisation, the total value of stocks trade and the number of venture capital deals.
The regulatory environment, meanwhile, is judged according to regulatory quality, the rule of law and the rigidity of employment.
Based on these two sub-categories alone, Singapore, Hong Kong, the US, the UK and Switzerland dominate the top slots – with the pack led notably by Singapore and Hong Kong (see Figure 2).
Indeed, these findings point squarely to the successful efforts by Singapore in particular, but also Hong Kong, to develop not just as international financial centres, but as centres of global economic excellence.
Cath Tillotson is managing partner at wealth management think-tank Scorpio Partnership
