Singapore moved up from 5th place to become the world’s 3rd most competitive economy in 2021, according to the latest Institute for Management Development (IMD) World Competitiveness Ranking.
IMD attributed Singapore’s ranking to its strong economic performance and gross domestic product growth, with “substantial improvements in the domestic economy, employment, public finance and productivity and efficiency.”
The Republic rebounded from the worst recession since independence, growing by 7.6 percent in 2021. Strong growth was recorded in the manufacturing, information and communications, finance and insurance, and wholesale trade sectors.
In 2021, Singapore attracted global investors who ploughed in $11.8 billion in Fixed Asset Investment, and $5.2 billion in Total Business Expenditure. These projects are expected to create more than 17,300 jobs, and close to $17 billion in value-added per annum.
Singapore Economy 2030 Vision
Against the backdrop of an uncertain global economic environment, brought about by the COVID-19 pandemic and exacerbated by the conflict in Ukraine, Singapore unveiled its plan to boost exports to at least S$1 trillion by 2030, from $805 billion in 2020, while doubling offshore trade to US$2 trillion (S$2.7 trillion) in the same period.
Trade and Industry Minister Gan Kim Yong described the plan as a “collective vision for the economy”.
The Singapore Economy 2030 vision for the four key pillars, services, manufacturing, trade and enterprises, “will put our industries, enterprises, and workers on a firmer footing for long-term, sustainable growth over the next decade”.
Waves of opportunities in services sector
Singapore’s large and diversified services sector represents more than 70 percent of its economy, comprising industries such as finance and insurance, information and communications, professional services, and logistics.
Sustainability and digitalisation are two major waves of opportunities.
The Government’s four pronged Green Economy Strategy focuses on decarbonising the industries, including the energy sector; driving new areas of growth in the green economy; investing in the development of new low-carbon solutions; and deepening the workforce capabilities. Undoubtedly, Singapore’s sustainability efforts will bring exciting new green business opportunities.
Digitalisation is set to disrupt all industries. At the 2022 IoT Asia+ Virtual Conference, Minister of State Alvin Tan pointed out that the IoT market size in Singapore alone is expected to grow from US$643 million in 2019 to US$1.1 billion this year, driven by the increased adoption of facial recognition, remote working, and the deployment of 5G.
“This proliferation of IoT devices will be a game changer for many industries,” he said.
In the Business Times article, Singapore’s industrial champions are rewriting their playbook, it was reported that the government has been “pumping billions in recent years into transforming 23 industries including manufacturing, financial services and real estate to meet the challenges of digitalisation. At the same time, Singapore has created a 2030 roadmap to become a regional hub for carbon trading and green finance.”
“It has also set aside about $25 billion up to end-2025 for research in areas such as health and biomedical sciences, climate change and artificial intelligence. And a series of industry-led groups have been set up to explore opportunities in areas such as robotics, e-commerce and supply-chain digitalisation, with government support.”
Building a vibrant ecosystem of Singapore enterprises
The Enterprise 2030 strategy is Singapore’s response to ensure that the nation can build and sustain a vibrant ecosystem of Singapore enterprises that are future-ready and possess deep capabilities to compete globally.
According to Second Minister for Trade and Industry Dr Tan See Leng, the strategy will support the growth of high potential companies and strengthen core capabilities of local enterprises in industry transformation.
A “new generation of local champions” has emerged in the last few years, with 22 Singaporean startups reaching unicorn status. Companies like Secretlab, Hegen and Nanofilm have made a name for themselves internationally.
The government announced a host of initiatives to enhance its support for high potential companies in four ways: developing global-ready executives; creating new corporate ventures; facilitating Mergers & Acquisitions; and creating enhanced access to financing.
“The last two years of COVID-19 have been challenging for our local enterprises, including those that have the ambition to grow to become global champions. As we emerge from COVID-19, EnterpriseSG is focused on supporting these high potential enterprises to resume their growth trajectories,” Mr Peter Ong, Chairman of EnterpriseSG was quoted as saying in the media release .
“We will intensify our efforts to identify and partner more of such companies through Scale-up SG to build the next generation of Singapore Global Enterprises, so as to continue to grow our economy and create good jobs for our people.”
To strengthen the core capabilities of Singapore’s local enterprises, efforts will be stepped up in key areas on Capabilities Development, Internationalisation, Digitalisation, and Innovation.
Enlarging manufacturing sector by 50 percent
The vision for Manufacturing 2030 is for Singapore to become a global business innovation and talent hub for advanced manufacturing.
Manufacturing 2030 was launched with the aim of growing the sector by 50 percent in 10 years and maintaining its share of about 20 percent of gross domestic product (GDP).
In 2021, the sector grew significantly by 13.2 percent, and received $8.5 billion in total Fixed Asset Investment. Over 6,000 jobs will be created when these projects are completed.
MOS Alvin Tan at the SSIA Semiconductor Business Connect 2022 reported that Singapore accounts for 11 percent of the global semiconductor market, and 20 percent of global semiconductor equipment is manufactured in Singapore.
“Our semiconductor industry is poised for further growth, with around 2,000 more jobs expected to be created in the next 3 to 5 years,” he said.
The green transformation also offers lucrative economic opportunities for semiconductor companies.
Growing the trading volume
The trading sector is one of Singapore’s largest employers with over 300,000 employees in 2020, of which around 80 percent are locals and close to 70 percent are PMET jobs.
The Trade 2030 strategy aims to grow the Republic’s trading volume, widen the types of trading activities in Singapore, and expand trade with other parts of the world.
To facilitate trade, Singapore continues to proactively strengthen regional economic integration through ASEAN and other platforms and play a leading role in key regional Free Trade Agreements. New agreements, such as Digital Economy Agreements and Green Economy agreements, have been inked with UK, South Korea, Australia, New Zealand, and others.
There will be an acceleration of efforts to grow a strong core of Singapore Global Traders, which are locally-grown traders that command global scale and are highly innovative.
Singapore offers businesses many exciting and promising developments in key sectors across its economy.
As Mr Gan said at the MTI Firefly Symposium, the success of the strategies and trade deals will depend on “how aggressively Singapore businesses pursue the opportunities presented by them.”
