Despite the pandemic gloom, Singapore secured S$17.2 billion in Fixed Asset Investments (FAI) and S$6.8 billion in Total Business Expenditure last year (2020), Trade and Industry Minister Chan Chun Sing said.
This is a strong performance in an exceptionally challenging year, the minister said.
The FAI secured in 2020 significantly exceeded the medium to long-term investment commitment goals of S$8 billion to S$10 billion that EDB has set for itself. The investments committed in 2020 are expected to create more than 19,000 jobs over the next five years.
Reasons Singapore continue to attract investments
There are several reasons why Singapore remains an attractive investment destination despite the uncertainties brought about by the pandemic, Mr Chan said.
1. Keeping our borders open: our efforts to keep our borders open, maintain external connectivity and ensure business continuity have given global companies the confidence to continue to site their projects in Singapore.
2. Trust: our regulatory system and intellectual property (IP) regime undergird our “trust premium”. This is highly valued by global companies especially those dealing with high-value and knowledge-intensive products.
3. Skilled workforce: our skilled local workforce and the ability to aggregate global talent here allows companies based in Singapore to access the manpower they require to help them grow.
4. Competent and trusted governance.
The road ahead and the challenges
Mr Chan said the road ahead remains challenging as the global situation continues to be plagued by uncertainties. The pandemic is still surging in many countries. Geopolitical tensions remain and the rollout of vaccination in most countries has been slow and uneven, Mr Chan said.
Key strategies to drive economic recovery and growth
To drive economic recovery and position ourselves strongly for continued growth, Mr Chan said the government will focus on four key strategies in 2021.
1. Strengthen our position as a critical node that cannot be easily bypassed in the global value chain
Singapore will build a strong ecosystem to support new areas of growth such as agritech, biomedical sciences electronics, and Infocomm and media, to entrench ourselves in the global value chain.
“Last year, we concluded digital economy agreements with Australia and separately with Chile and New Zealand,” Mr Chan said. “We have also launched negotiations with Korea and will launch negotiations with the UK soon.”
“These DEAs will allow us to accelerate efforts to develop our digital economy and set high standards in digital trade rules globally,” he added.
3. Pursue an innovation-led and sustainable economy
Conventional arbitrage and lowering the costs of production are no longer sufficient. Last year, the Government announced that they would sustain the RIE (Research, Investment and Enterprise) investments over the next 5 years at about $25 billion.
Mr Chan said, “This is no mean feat and a signal of our determination to invest for the future. We will strengthen our research networks with companies at the cutting-edge of new technologies and developments while supporting our smaller companies to close the innovation and enterprise loop. We will also encourage companies to undertake innovation and develop new products and solutions to serve the wider regional and global markets.”
4. Double down on transformation efforts to help our companies and workers stay resilient and competitive in a Covid and post Covid-world
We are not returning to a pre-Covid world and the earlier we make the necessary adjustments, the faster and stronger we will emerge.
– Chan Chun Sing –
“Our targeted help will focus on building up corporate capabilities and helping our companies to access additional platforms to innovate and new markets beyond Singapore,” said Mr Chan.
Workers must also keep an open mind to the new possibilities that are emerging.
Globally, the average lifespan of a major company has gone from 61 years to less than 18 years today. McKinsey’s research predicts that in 2027, only six years from now, 75% of the world’s top 500 companies will cease to exist.
In conclusion, Trade and Industry Minister Chan Chun Sing said:
We head into 2021 with cautious optimism of our economic prospects for the rest of the year. EDB’s figures today are promising and encouraging, and if things go well, we can expect to see some recovery in the global economy in the second half of this year. However, we should not think that the road ahead will be a walk in the park because we have managed to do well even up till now.
Many uncertainties lie before us, including how the Covid situation will continue to pan out. Companies will take a much longer time to decide upon their investments over the next one to two years because of the uncertainties at the local and global levels. Countries will compete even harder for their investment dollars and jobs. While Singapore continues to be an attractive investment destination, we also need to be mindful that things can change very quickly. In order to stay resilient, we must continue to be flexible and adaptable – government, companies and workers included.