Singapore, which had claimed the top ranking in the 2013 and 2015 editions of KPMG’s Change Readiness Index, has been replaced by Switzerland and is now in fourth place.
The 2017 KPMG CRI ranks 136 countries for their capacity to respond and adapt to significant change, resulting from short-term events, such as natural disasters, and longer-term demographic, economic, social and technological trends.
The CRI provides deep insights into where countries can focus and invest in order to be prepared for the increasing pace of change worldwide—breaking down each country’s capacity across three key “pillars” of capability: enterprise, government and people & civil society.
“More than ever, the welfare of a country’s citizens depends on the ability to cope with and take advantage of change,” says Timothy Stiles, Global Chair of the International Development Assistance Services (IDAS) practice at KPMG. “The CRI offers an eye-opening view of which countries are best positioned to weather and potentially benefit from inevitable change, and the factors behind their preparedness.”
Europe dominates top 10, US steps up its change readiness
European countries captured seven of the top 10 places in the 2017 CRI, demonstrating strong capacity to handle the region’s challenges.
Switzerland took the number-one ranking for the first time, replacing Singapore, which had claimed the top ranking in the 2013 and 2015 CRIs.
The UK entered the top 10 for the first time, strengthening its change readiness at an especially critical time as the country prepares for Brexit.
The US also significantly improved its ranking since the previous CRI, rising eight places to 12th from 20th in 2015.
The highest-ranked countries (with change in ranking from 2015):
- Switzerland (+1)
- Sweden (+7)
- United Arab Emirates (+2)
- Singapore (-3)
- Denmark (+3)
- New Zealand (+0)
- Netherlands (+4)
- Finland (+2)
- Germany (+3)
- United Kingdom (+3)
- Norway (-7)
- United States (+8)
- Hong Kong (-10)
- Australia (+2)
- Ireland (--)*
- Austria (+1)
- Canada (-3)
- Belgium (+0)
- Qatar (-12)
- France (+6)
Why some countries are more change ready than others
Focusing on GDP or business outputs alone is not the answer to a country becoming more change ready. The CRI shows that improving capabilities in areas of government and people & civil society, as well as in enterprise, or business environment, are often key to why some countries are able to climb up the rankings. No single factor underlies change readiness.
In 2017, every top-ten country, with the exception of Singapore, increased its government and people & civil society capability scores over 2015. Just four of the top 20 ranked countries saw a decline in people & civil society scores, whereas 25 of the bottom 30 countries in the rankings declined in this capability.
Rwanda proves lower-income countries can strengthen change readiness
High-income countries are generally better positioned to respond to change, but Rwanda demonstrates that lower-income countries can significantly improve their change readiness. Rwanda rose to 46 in the 2017 rankings, making it the only low-income country in the top 50. Rwanda benefited from strong performance in government capability, where it ranked 21st.
“Rwanda’s progress can offer lessons for other countries as to how strengthening fundamental institutions and achieving political stability can lay the foundation for much greater change readiness,” according to Trevor Davies, Global Head of the IDAS Institute at KPMG.
The impact of change readiness on migration
Migration is a significant driver of change for many countries. Those that are most change ready have a better capacity to meet the challenges and potentially benefit from increasing migration. It is not a coincidence that countries with high CRI scores–including Sweden, Germany, the Netherlands and the UK–have greater shares of migrant population.
“These countries have the combination of social services, safety nets, education and economic opportunity needed to host and integrate migrant populations,” says Timothy Stiles. “Ultimately, they have the potential to use migration to their advantage in growing their economies and providing a net gain to society.”