In the context of the global economy, Singapore holds a significant position despite its lack of natural resources and small geographic size.
According to the World Economic Forum, the city-state has one of the most open and competitive economies in the world, contributing to consistent economic growth over the years.
The lion city, being a global financial hub, has consistently attracted foreign direct investment, which has been a crucial factor in its economic success.
The robustness of Singapore's economy is reflected in its GDP. Singapore's GDP per capita is among the highest globally, netting $82,807 USD in 2023. This can be accredited to its strong human capital, sound fiscal policies, and strategic location.
Its use of the Singapore Dollar, a highly stable and reliable currency, also contributes to its economic prowess.
Key Competitive Industries in Singapore
1. Financial Services
Singapore is known worldwide for its financial services industry, which contributes around 13% to the nation's GDP.
It is home to over 200 banks, with the top ones being DBS Bank, United Overseas Bank (UOB), and Overseas-Chinese Banking Corporation (OCBC). These banks provide a wide range of services from consumer banking to treasury and markets.
DBS Bank, for instance, has gained recognition as the "World’s Best Bank" by Euromoney, underlining its digital innovation and commitment to delivering a comprehensive range of financial services. Similarly, OCBC is working on enhancing its wealth management services and digital banking solutions, focusing on Southeast Asia's burgeoning middle-class market.
2. Manufacturing
Singapore's manufacturing sector is a significant contributor to the GDP, with a focus on electronics, chemicals, biomedical sciences, and precision engineering.
Global companies like Seagate, Micron, and Western Digital have their manufacturing bases here, taking advantage of the highly skilled workforce and advanced infrastructure.
Local company Flextronics, now known as Flex, is a leading electronics manufacturing services provider serving global brands in sectors like automotive, medical, and telecommunications. They continue to innovate, currently focusing on smart and connected devices, cloud solutions, and more sustainable manufacturing processes.
3. Biomedical Sciences
Singapore's biomedical sciences sector is gaining global attention, bolstered by the presence of pharmaceutical giants such as GlaxoSmithKline (GSK) and Pfizer, which have extensive manufacturing and research facilities here.
Local firms also make a significant impact. For example, Esco Group, a home-grown leader in the life sciences sector, provides highly specialized equipment and services for IVF clinics and biomedical labs.
Amid the COVID-19 pandemic, they've been focusing on vaccine-related technologies, particularly in vaccine development and distribution.
4. Information and Communications Technology (ICT)
With the government's Smart Nation initiative, Singapore's ICT sector has grown exponentially. Sea Group, the parent company of Shopee, Garena, and SeaMoney, is a shining example of a local company making its mark on the global stage.
Shopee has become one of the leading e-commerce platforms in Southeast Asia and Taiwan, and Garena is a global online gaming developer and publisher.
The variety of ICT companies is also diverse. Ranging from AI imaging technology to blockchain companies — Singapore has every investment opportunity for the discerning digital investor.
5. Maritime and Logistics
The Maritime and Logistics sector in Singapore benefits from its strategic location in the heart of Southeast Asia. The Port of Singapore is one of the busiest in the world, with over 37.49 million TEU flowing through its port in 2021.
PSA International operates the biggest transhipment hub in the region. To remain competitive, PSA has been investing in digital technologies to enhance port operations and logistics services. Many incumbent maritime companies and startups, such as Portcast, have been vying for a slice of Singapore's massive trade infrastructure.
Senior Minister of State for Transport Chee Hong Tat mentioned how he wants to transform Singapore into the silicon valley of marine technology, with the goal of cultivating 150 Marine technology startups by 2025.
6. Clean Energy
Finally, Singapore is positioning itself as a clean energy hub, even amidst limited natural resources. Companies such as Sunseap, the largest clean energy solutions provider in Singapore, are leading the charge. Sunseap is currently working on several photovoltaic projects across the city-state and beyond, including floating solar systems, furthering Singapore's goal to be a green energy leader in the region.
In conclusion, these industries demonstrate Singapore's competitiveness and innovative spirit on the global stage, further enhancing its appeal to investors and high-net-worth individuals. The city-state's dedication to creating a business-friendly environment and its constant push towards diversification and innovation ensures it remains a top choice for investment and business operations.
Keys to Success
Tax System and Economic Policies
One of the reasons why Singapore is attractive to foreign businesses and millionaire investors is its friendly tax system. Singapore has one of the most competitive corporate tax rates in the world, capping at 17%. The country also does not levy capital gains tax, which is particularly beneficial for investors. Moreover, the Singapore government has a reputation for its pro-business policies and stable political environment, which further enhances the ease of doing business here.
Workforce and Talent
Singapore's competitive edge also lies in its skilled workforce. The country has a strong emphasis on education and lifelong learning, resulting in a pool of highly educated and adaptable professionals. The high level of proficiency in English, the main language of business and administration, also facilitates communication and business operations on a global scale.
Strategic Location
Strategically located in the heart of Southeast Asia, Singapore serves as a gateway to the region's emerging markets. The country's state-of-the-art infrastructure and its status as a global logistics and maritime hub further enable seamless trade and operations across borders.
Government Support
The Singapore government actively nurtures growth and competitiveness across various industries through various grants and schemes. For instance, the Singapore Economic Development Board (EDB) offers a variety of programs and initiatives that help businesses build capabilities, innovate and internationalize.
Foreign Direct Investment (FDI)
Singapore continues to attract a significant amount of foreign direct investment. The country's robust legal framework, absence of corruption, and efficient bureaucracy have helped create an investment-friendly environment that is attractive to multinational corporations.
Looking Forward
As we move into the future, Singapore continues to innovate and adapt to global economic changes. The government is investing heavily in digital transformation and artificial intelligence to remain at the forefront of technological advancements.
Initiatives such as the Smart Nation programme will further boost the competitiveness of Singapore's industries globally.
These additional considerations provide a well-rounded perspective on why Singapore's industries remain globally competitive, making the city-state a top choice for millionaire investors and businesses alike.
Investors on the global stage are handed a golden opportunity to invest in Singaporean companies, while also becoming a permanent resident through the global investor's programme (GIP).
By consistently adapting to changing global dynamics and prioritizing economic growth, Singapore is poised to maintain its leading position on the world stage.