As small states seek ways to compete globally, island nation Taiwan has recorded its highest-ever ranking in the World Competitiveness Ranking, climbing to fourth place worldwide.
The 2026 ranking, released by the Switzerland-based International Institute for Management Development (IMD), placed Taiwan behind only Singapore, Hong Kong and Switzerland among 70 economies assessed.
According to the report, competitiveness is increasingly determined not by the size of an economy, but by factors such as institutional credibility, predictable rules and the ability to withstand economic shocks.
For small economies, including island states such as Saint Lucia, the report’s findings highlight the growing importance of building strong institutions, creating an environment that supports business activity, and developing the capacity to adapt to global economic changes.
Taiwan’s rise from sixth place last year was driven by strong GDP and export growth, while the economy improved across all four pillars measured by the IMD: economic performance, government efficiency, business efficiency and infrastructure.
Taiwan’s representative to Switzerland, Wang Szu-wei, attributed the improvement to the return of Taiwanese businesses, talent and capital, as well as growth in manufacturing, research and development, and artificial intelligence.
The IMD report noted that economies with mature legal systems and credible institutions are gaining an advantage as geopolitical tensions and global fragmentation increase.
It also stated that competitiveness in 2026 depends less on costs, size or even innovation alone than on institutional credibility and the capacity to absorb economic shocks.
Taiwan was one of the smaller economies by population among the top 10, outperforming much larger countries including the United States, which ranked 10th.
Singapore topped the rankings, followed by Hong Kong and Switzerland, while the remainder of the top 10 included the United Arab Emirates, Denmark, Ireland, the Netherlands and Sweden.
(Report adapted from CNA)
