Strengthening Singapore’s growth in the post-pandemic future – unlocking SGD65.3 billion worth of annual economic opportunity from digital transformation by 2030
Singapore is a destination of choice for technology and innovative businesses today. 80 of the world’s top 100 technology firms have a presence in Singapore. This is attributed to a combination of factors, including modern physical and digital infrastructure, a strong digital talent base, and robust Intellectual Property (IP) regulations. The country has also been ranked second globally out of 63 countries in the 2020 IMD World Digital Competitiveness Index, second only to the United States. Singapore also has a flourishing digital economy. Recent research by Google and Temasek has found that Singapore’s Internet economy is worth USD9 billion in 2020, but could grow further at 19 percent annually to reach USD22 billion by 2025.
However, the country currently faces several barriers to unlocking the full benefits of digital transformation. One such barrier is the limited adoption of advanced digital technologies. While most businesses in Singapore have Internet access and an online presence, adoption rates for advanced technologies such as the Internet of Things (IoT) are considerably lower. In particular, small and medium sized enterprises (SMEs) face greater challenges in adopting such technologies. Another barrier is the lack of specific digital skills that have become more in demand, particularly with the COVID-19 pandemic. For example, a survey in 2020 found that although 94 percent of employers were using data to make business decisions more often than a year ago, 93 percent of them felt that their staff lacked adequate data skills.
Digital transformation will be important for Singapore to “build back better” from the pandemic, and gain long-term resilience. This notion is well reflected in recent government strategies to build Singapore’s resilience in the post-pandemic future. This includes accelerating digital transformation and innovation by increasing the adoption of technology-enabled alternatives as well as intensifying research and development (R&D). There is also a call to focus on sustainability with the Singapore Green Plan 2030 which aims to harness technology-driven solutions to “secure a green, liveable, and sustainable home for generations of Singaporeans”.
Access Partnership’s Economic Strategy team’s latest report (commissioned by Google) examines the economic significance of digital technologies in Singapore, especially in non-technology sectors. This study finds that if leveraged fully by 2030, digital technologies could create up to SGD65.3 billion (USD47.4 billion) in economic value.
Key messages from the research include:
- There is a significant economic prize attached to accelerating Singapore’s digital transformation. If fully leveraged by 2030, digital technologies could create up to SGD65.3 billion (USD47.4 billion) in economic value. This is equivalent to about 13 percent of the country’s gross domestic product (GDP) in 2020. Of the total digital opportunity, a substantial 66 percent could be driven by technologies that help businesses and workers mitigate the economic impacts of COVID-19. Beyond managing the immediate impacts of the pandemic, digital transformation will also be important to boost resilience in the post-pandemic future – the use of automation and digital technologies for off-site working, for example, will be crucial to boosting Singapore’s manufacturing and hospitality sectors.
- There are three areas of action required for Singapore to fully capture its digital opportunity: i) facilitate digital adoption, particularly for SMEs; ii) digitally upskill the nation in emerging technologies; and iii) position the country as a regional hub for digital trade. While a range of policies is already introduced to accelerate digital transformation such as the “Emerging Technology Programme” and “National Digital Literacy Programme”, there is scope for Singapore to further develop its efforts. These include addressing barriers to adoption of advanced digital technologies by SMEs (e.g., Finland’s Artificial Intelligence Accelerator (FAIA) facilitates the pilots of AI applications amongst companies), developing more digital skilling programmes to train workers in advanced digital skillsets such as cloud (e.g., Australia is embarking on industry-academia partnerships to develop courses on cloud computing), and further championing digital trade at international forums.
- Through its programmes and products, Google has been instrumental in advancing Singapore’s digital transformation and supports benefits to businesses, consumers and the broader society. Google supports SMEs in their digital adoption journeys, through programmes such as the “Google-UOB SME Leadership Academy” which facilitates SME digital adoption through online courses. Google also digitally skills Singapore’s workers and students through skilling programmes developed in collaboration with the government and educational institutions, such as “Skills Ignition SG” – a “Grow with Google” programme. To support Singapore’s digital interconnectedness in the region, the company has also been investing in regional network infrastructure, including three subsea cable systems and a third data centre launching in 2021, which brings Google’s investment into Singapore’s data centres to USD850 million. Google also facilitates job creation in the country. For instance, through Google Ads and AdSense, Google supports the creation of around 6,600 jobs in Singapore. These jobs are created through the use of Google products that lead to businesses expanding their customer bases and increasing revenue, and subsequently hiring more staff to meet the additional demand. Furthermore, it has been estimated that more than 49,500 were employed in jobs that were linked to Android in 2020.