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Slight slip in Global Dynamism Index

Released at: 12:21, 07/10/2015

Slight slip in Global Dynamism Index

Vietnam drops one place among advanced Asia-Pacific economies in Grant Thornton Global Dynamism Index 2015.

by Linh San

The Grant Thornton Global Dynamism Index (GDI) 2015 reported that the Asia-Pacific region scores well in terms of business operating environment, financing environment, labor market and technology, although it lags behind in market growth. Dynamism refers to the changes in an economy that are likely to lead to a fast future rate of growth. The GDI - which combines 22 indicators across five growth areas to identify the best business growth environments in the world - identifies Singapore as the most dynamic market globally.

Though some Asia-Pacific peers rank in the Top 30, some have slipped in the rankings, such as Malaysia (from 13 to 16) and Australia (from 1 to 3) and Vietnam to 28 (down one place).

“Advanced Asia-Pacific economies offer a good blend of sound growth fundamentals, alongside a productive labor force and a culture of investment in R&D,” said Mr. Kenneth Atkinson, Executive Chairman of Grant Thornton Vietnam.

“Market entry decisions are some of the toughest a business leader ever has to face. There are so many factors - both known and unknown - to consider. Uncertainty about what lies ahead can make it hard to make the case for action to colleagues and funding partners and to manage risk effectively,” he said.

If considering the financing environment - which includes the financial regulatory system, access to capital, inward M&A deals, private sector indebtedness, inward direct investment, and corporate tax burden - Vietnam ranks 29th globally, a fall of three positions, according to the GDI. Malaysia slid from the 16th to 27th and Australia from 11th to 16th. Japan, at 36th, is the lowest ranking economy in the region and is in the bottom five in financing environment and market growth. On the other hand, Singapore ranks first globally and no lower than 25th in any growth area, highlighting its robust, broad-based offer to dynamic businesses.

The overview improves significantly for Vietnam when referring to labor and human capital, which analyses labor productivity growth, unemployment, time spent in education, and population, and where Vietnam ranks seventh in the global rankings and fifth in Asia-Pacific.

Lastly, Asia-Pacific countries rank surprisingly high in economics and growth, which includes real GDP growth, private consumption growth, and stock market growth, holding Top 10 positions in the global rankings. Malaysia ranks third, Vietnam rose to fifth, the Philippines was sixth, and Indonesia eighth.

“The GDI cannot replace engaging with an advisor with a deep understanding of international expansion and the countries being considered,” said Mr. Nguyen Chi Trung, Managing Partner of Grant Thornton Vietnam.

“But it can be used as a tool to help identify countries of interest by drawing on 22 indicators that have each been assigned an importance through a survey of business leaders, adding that vital human perspective,” he said.

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