Singapore has topped a list of 90 nations in a KPMG study evaluating the capacity of countries to respond to changes such as natural disasters, global competition, economic shocks and demographic trends.
KPMG’s 2013 Change Readiness Index (CRI), produced in partnership with global advisory firm Oxford Economics, measures countries across 26 components to compare capabilities to respond to changes in three areas.
These areas are enterprise or the capability of private and state-owned enterprises to manage change and generate growth, government, as well as people and civil society.
In its second edition, the CRI is unprecedented in scope- it expanded the country coverage by 50 percent compared to the inaugural study last year and now includes developed markets such as Singapore, Australia and the United Kingdom.
Top 10 CRI Rankings
4. New Zealand
8. Saudi Arabia
10. United Kingdom
Singapore was ranked first in the areas of enterprise and government capability to respond to changes, and came in fifth for the people and civil society component.
“Countries are being exposed to a vast array of changes – globalisation, automation and rising costs among others – and these create both opportunities and risks," says Satyanarayan R (Satya), KPMG’s head for Government & Infrastructure in the Asia Pacific. "We cannot underestimate the importance of a nation’s ability to respond to change as this capability is vital to a country’s success in building a sustainable economy and equitable society.”
The CRI serves as a useful tool for governments and businesses to make more informed decisions, whether on potential reforms or policy changes, managing risks, or making investments.
Wealth does not automatically translate to change readiness
Among other key findings, the CRI revealed that a country’s wealth is not always a determining indicator of its ability to respond to and manage change. A number of lower income countries have been ranked as having greater change readiness capability compared to some of their more developed counterparts.
For example, Chile, categorised as an upper-middle income country, ranked as high or higher in the index than many high-income countries, including the United States of America and France.
Several lower-middle income countries, including Panama and the Philippines, outperformed some higher-income countries in the rankings, placing above Italy, Poland, Brazil and China.
“Wealth and high per capita income closely correlate to change readiness, but income is not an insurmountable barrier to enhanced economic and social resilience,” says Satya. “This is an encouraging message for lower income countries. Strong institutions and governance can provide stability in stressful periods and potentially open the door to new opportunities.”
The Index also supports a finding that change readiness can be maintained, and perhaps even strengthened in the face of short-term shocks, such as natural disasters. Japan notably ranked seventh in the CRI, showing particular strength in its enterprise capability.