Response to Singapore's Drop in 2025 World Talent Ranking

11 Ms Denise Phua Lay Peng asked the Prime Minister and Minister for Finance what is the Government's response to Singapore's recent drop in ranking in the International Institute for Management Development's World Talent Ranking 2025, which assesses the three pillars of investment and development, appeal and readiness.

The Second Minister for Finance (Ms Indranee Rajah) (for the Prime Minister and Minister for Finance): Mr Speaker, the International Institute for Management Development (IMD) World Talent Ranking measures how economies perform in developing home-grown talent, attracting and retaining overseas talent and building the skills and competencies of their labour force. It provides a perspective of how Singapore is perceived vis-a-vis the other economies as a global talent hub.

One key driver behind the change in Singapore's ranking in 2025 was in perception-based factors or indicators. In particular, how business executives viewed adequacy of apprenticeships, their perceptions of companies' prioritisation of employee training and their confidence in Singapore's ability to avoid brain drain. We will analyse these findings as well as other relevant data carefully, to better understand the underlying causes and see where and how we can do better.

Singapore's performance should also be seen in context. For example, demographic realities limit how much we can grow our workforce. As such, our slowing labour force growth in 2024 resulted in a fall in the related indicator. On the other hand, although we were ranked 63rd in terms of our public expenditure on education as a share of gross domestic product (GDP), we were second in the same survey on education outcomes, that is, the Programme for International Student Assessment (PISA) score. This is a testament to our cost-effective public spending on education.

Singapore will continue to welcome talent who complement our own capabilities. We will, at the same time, press on with our priority in developing our local workforce. By investing in our people, enhancing our business environment, strengthening our connectivity and fostering a vibrant tech and innovation ecosystem, we are confident that Singapore will remain a leading global talent hub.

Mr Speaker: Ms Phua.

Ms Denise Phua Lay Peng (Jalan Besar): I thank the Minister for her response and for mentioning that the survey findings are based on perceptions.

Indeed, perception, sometimes, they say, is reality unless we clarify or correct them. So, I have two supplementary questions and based on the remarks that are made by the directors from IMD. One is under the pillar of investments and development. I am baffled why the report cites that we have low education investment, when education is actually known to be one of the highest items in our Annual Budget. And especially, I wonder if the report has considered factors, like the hefty investments that we have made in adults' continued training and education in SkillsFuture, and so forth. And also, at the same time, a director from IMD mentioned that Singapore has done more than enough, despite the so-called "relatively low" education investment. So, that is one.

The second supplementary question pertains to the pillar of appeal. The report also cited that, because organisations are relocating to relatively low-cost countries in, especially near our neighbouring countries, it claims that companies, therefore, could get a similar quality workforce for a much lower price in these countries. And I would like to hear the Minister's comment on this, whether that is, indeed, true or is it just a comment on Singapore?

Ms Indranee Rajah: Sir, I thank the Member for her supplementary questions and if I may, just before I address the specific questions, set out a bit of a better understanding of the IMD report.

The first thing that I wanted to say was that it measures competitiveness across different countries and economies, and on this, although our ranking had dropped, we are actually still in the top 10. So, in other words, Singapore is still in this report, ranked the seventh most talent-competitive economy in 2025 out of 69 economies in 2025. And whilst this is a drop from second place in 2024, our general ranking has been on the uptrend over the last decade.

So, in 2016, for example, we were 15; then in 2017, 13; in 2018, 13. We have been climbing up steadily. And then, in 2024 it was second, and now it is 2025. So, we have had a few ups and downs, but, overall, the trend has been upwards and we are still in the top 10. That is the first point I want to make.

Then, the second point to make is how do they measure this competitiveness? It assesses the 69 economies using the following three factors. First, investment and development that evaluates the investment in and the development of homegrown talent; then it looks at appeal, which measures the ability to attract and retain overseas talent; and third, it looks at readiness, which assesses whether the existing talent pool meets current and future needs. So, you have got those three factors.

And then, let us look and see how we did on these three factors, which whilst addressing this, will also address the Member's supplementary question. The first on investment and development in local talent, our weaker performance in the report on this factor was contributed by perception factors, decline in perception-based indicators on employee training and apprenticeships; and also, the second one was low public expenditure on education as a percentage of gross domestic product (GDP) – we went from 63rd to 65th and pupil-teacher ratio. [Please refer to "Clarification by Minister, Prime Minister's Office", Official Report, 06 November 2025, Vol 96, Issue 11, Clarification section.]

On the expenditure on education, actually, that is not very different from last year's report. So, that has not been much of a shift. These indicators, the part on education as a percentage of GDP, have traditionally weighed down our rankings across the years. And that seems to be because they look to see how much you put in. Whereas for us, it is not only just how much we put in. It is also the outcomes. So, it does not seem to give enough weight to the value-for-money part.

And also, the indicator that is used in the IMD report on education investment is on public expenditure on education as a percentage of GDP. So, given Singapore's relatively high GDP, the percentage figure will naturally appear lower compared to other countries.

But this does not mean that our actual investment in education is small. Singapore consistently allocates one of the largest portions of our Annual Budget to education, as the Member has pointed out, including substantial investments through initiatives, such as SkillsFuture. In fact, our total public expenditure on education per student, rather than as a percentage of GDP, remains relatively high.

In the same IMD report, we were ranked 17th this year on this indicator, and our pupil-teacher ratio is still comparable to the Organisation for Economic Cooperation and Development (OECD) averages and to that of countries like, the United States, United Kingdom, Germany, Korea and Japan.

So, I think these indicators do not fully capture the strength of our education system. Our outcomes remain strong in education, as reflected in the international benchmarks.

On this first factor, it is more the perception-based indicators on employee training and apprenticeships that pulled the ranking down.

The second factor on appeal, on many of the traditional considerations, we remain largely the same. That is, for management, fair administration of justice. Those continued to be pull factors. The things that weighed us down on appeal were perception-based indicators on worker retention. There was a fall in executives' perception for indicators, such as worker motivation in companies; and secondly, a high cost of living. That one did not move that much though; it was from 63rd to 65th. Singapore ranked 65th, which is comparable to other overall top performers, like Switzerland and the United Arab Emirates (UAE), and ahead of Hong Kong. And so, this indicator has traditionally weighed down our overall ranking over the years, but it is not a key factor pulling down the ranking in 2025.

The third factor, readiness. Our performance in the readiness factor was relatively steady, and for this one, it reflected our strong education system serving as a notable strength. Singapore ranked highly in PISA, as well as the proportion of science, technology, engineering or mathematics (STEM) graduates. And the surveys also affirmed that our primary and secondary and university education meets the needs of the competitive economy. In fact, those improved. [Please refer to "Clarification by Minister, Prime Minister's Office", Official Report, 06 November 2025, Vol 96, Issue 11, Clarification section.]

But the areas of decline, under readiness, was labour force growth, I addressed that earlier, and perception indicators on availability of skilled labour and specific skillsets and expertise.

In summary, the things which affected our ranking this year was perception on employee training and apprenticeships, labour force growth and the perception of the availability of skilled labour. I think education remains largely the same.