When it comes to investments, location is a crucial factor that everyone should consider, especially for entrepreneurs looking to plant their first seed or multinational corporations (MNCs) seeking to expand across borders. While we take pride in Malaysia’s progress over the years in attracting foreign businesses, it is also prudent to examine other successful nations and learn from their strategies in remaining one of the most competitive countries for business worldwide.
Metrics for Business Competitiveness
Before we begin, it’s essential to look into how Business Competitiveness is measured. Thankfully, the World Competitiveness Ranking report outlines four metrics that are used for this purpose, which are:
- Economic Performance: This metric examines the country’s domestic economy, international trade, international investment, employment, and prices.
- Government Efficiency: This category assesses public finance, tax policy, institutional framework, business legislation, and societal framework.
- Business Efficiency: This criterion focuses on productivity and efficiency, the labor market, finance, management practices, attitudes, and values.
- Infrastructure: This metric includes basic infrastructure, technological infrastructure, scientific infrastructure, health and environment, and education.
As a company passionate about empowering entrepreneurs and investors, PEGH acknowledges the importance of understanding these metrics in determining the most competitive countries for business. By leveraging our expertise, we can provide valuable insights and support to those seeking to make strategic investment decisions.
So, based on those factors, which are the best countries for business?
Unveiling the Top-Ranked Business Destinations
At nearly 10,000 kilometres away, the number one spot goes to Denmark, which has held the top position for two consecutive years and has remained in the top 3 for four years since 2020. This is likely due to its excellent scores in business, government, and infrastructure efficiency metrics. Another factor worth considering is that Denmark also offers competitive tax conditions, resulting in low business costs for entrepreneurs and the lowest employer costs and social security rates among all EU nations.
While Ireland and Switzerland take the second and third spots, respectively, our close neighbour Singapore is ranked fourth in 2023. Interestingly, Singapore has maintained its position in the top 4 for the past five years, even claiming the number 1 spot from Hong Kong and Denmark in 2019 and 2020, respectively. This incredible consistency is largely due to a robust economy with high government revenue, zero foreign debt, and year-upon-year positive surplus. The World Economic Forum ranks it as the most open economy in the world.
Going back to the aforementioned metrics, anyone who has been to Singapore as of late can certainly attest to the island nation’s impressive infrastructure, as well as its high economic performance and government and business efficiency. Geographically speaking, Singapore’s strategic location also provides businesses with access to a market of 2.8 billion people within a few hours of flight.
How about the performance of the two big dogs in the world right now, which are the United States and China? How are they faring?
For the United States, the world superpower has remained in the top 10 rankings for the past five years, thanks to its unsurpassed economic might. Unfortunately, a challenging business landscape and turbulent government have prevented it from climbing higher in the rankings.
As for China, the Sleeping Giant has consistently been in the top 20 rankings until recently when it slipped to the 23rd spot for 2023. That being said, it is also worth noting that China is the only country with a GDP per capita of less than $20,000. Besides that, countries with large populations tend to rank comparatively lower, so these rankings ought to be taken with a grain of salt.
When it comes to Malaysia, we have largely hovered in the top 30 rankings, taking the 27th spot in 2023 and being just two spots shy of breaking into the top 20 in 2019. While that is no small feat, there is clearly room for improvement, especially in the areas of infrastructure and government efficiency if we are to realize our true potential and claim our rightful spot alongside nations like Denmark and Singapore.