Once a mere tiny red dot on the world map, the city-state of Singapore has, over the years, morphed itself into a leading world-class financial and technology hub in Asia. Literally a powerhouse of Southeast Asia, Singapore has gone on to become the preferred and chosen destination for global firms aiming to propel themselves into the region’s growing markets.
According to a recent report from the Economic Development Board (EDB) of Singapore, 80 out of the 100 top tech firms in the world not only have operations in this country, but they are also looking to bolster their presence and increase their investments. Not quite surprising, seeing how Singapore came in sixth in the 2017 Bloomberg Innovation global ranking position, just ahead of Japan and the United States, while China secured 21 positions. In another study conducted by real estate advisory firm Jones Lang LaSalle, Singapore grabbed pole position as the top foreign investment destination for several Chinese tech giants, including Tencent, Baidu and Alibaba.
Today, we give you an insight into the very factors that have contributed to Singapore’s allure, both as a technological innovation centre and financial hub for regional operations.
The great city-state of Singapore is geographically located in the heart of Asia and conveniently connects it to almost every trading corner of the globe — from East to West. According to a study by research company JLL, it showed that the cities in China, for instance, were most connected to Singapore, with New York and Sydney trailing closely behind. The former fishing village has successfully managed to ensnare itself into the globe’s most complex of value chain because its rulers have strived to firmly establish transparency and consistency in their governance of the law and its highly-competent policymakers have efficaciously implemented befitting rules and regulations, and in return, earned the trust of non-profit organisations (NGOs), small and medium enterprise (SMEs) and multinational businesses alike.
Over the years, Singapore has aptly maintained this virtuous cycle and has seen governmental institutions ramping up their efforts to engage in mutually beneficial and open-sourced public-private business partnerships. This is evident in the routine invitations dished out from the State’s policymakers to foreign firms in welcoming them to participate in capacity building and problem-solving exercises.
Talent and Innovation
Talent is another major factor and a huge driving force behind the world’s top tech firms setting up base in Singapore. It is apparent that the vast marketing and tech talent in Singapore proves to be one of the vital selling points that attract the top tech conglomerates, and this can be attributed to the country’s cash-flush policymakers that have fruitfully turned the city’s labour pool into one of the world’s leading tech-savvy workforces.
It was reported that the government has set aside a sum of $19 billion under the Research, Innovation and Enterprise (RIE) 2020 Plan, which sole purpose is to foster and promote an emphasis on health and biomedical sciences, digital economy and services, advanced manufacturing and engineering, as well as urban, sustainable solutions. These well-funded efforts are set to involve a string of robust collaborative networks, which include leading MNCs, local universities and the rapidly growing ecosystem of business incubators, start-ups and venture capitalists.
In addition to talent, an innovative environment is also an integral attraction magnet for tech companies to enter into this fast-growing country. Here in Singapore, it is a common sight for start-ups and established businesses to come together and team up on high profile projects and this practice has not gone unnoticed. In 2017, Singapore has been graded as the most innovative country in Asia by Global Innovation Index, with major tech players in the industry such as IBM and Amazon tapping on Singapore to pilot new endeavours and pioneering ventures before having them rolled out globally.
Free Trade Arrangements (FTA)
Do not even for a second be fooled by Singapore’s tiny market size with a local population of just over five million. To date, this tiny powerhouse of Asia has successfully initiated 22 regional and bilateral FTAs and has just penned two mega-FTAs including the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and the European Union-Singapore Free Trade Agreement (EUSFTA), both of which have great standards for promoting the platform and digital trade economy.
These two mega deals essentially opened the doors of all the world’s major market players to Singapore-based enterprises. To be eligible for these FTAs, regional value chains must be rerouted to Singapore, where there exist a critical mass of strategic partners and service providers, as well as a robust supplier of networks.