Relevant Industries in Singapore in the Next Three Decades
Singapore is a leading business and financial hub in Asia today. Our economy is diverse, with a thriving internationalised services industry alongside an advanced manufacturing sector that excels in a number of key niches, including the production of electronics, petrochemicals, and biomedical products. New chances and challenges will both be present in the following decades.
The Shifting of the Global Economic Landscape
The developing economies of Asia are beginning to displace the developed economies as the centre of global economic gravity. Singapore will gain from this in two ways. A geographic advantage accounts for the first. Singapore is well-positioned to benefit from hosting high-value-added production activities, like design and R&D in Asia, due to economic integration, distributed manufacturing, and the increased sophistication of supply chains. The demographic dividend is the second factor. A larger and wealthier Asian middle class will increase demand, opening up new markets for companies. The need for exported commodities, as well as exportable services, like urban solutions and clean technologies, would increase due to growth in China, India, and the ASEAN.
But the expansion of these emerging economies also heralds an increase in rivalry. Over the past three decades, China’s economy remarkably transformed, with its businesses expanding their global reach. It also presents greater rivalry in the upcoming phase in high-tech manufacturing industries like the semiconductor sector. The newly-elected administration in India has also declared “Make in India” and “Smart Cities”, potentially establishing a new industrial hub in Asia. The establishment of the ASEAN Economic Community in 2015, which would have a market of 600 million people, will help ASEAN’s member states grow. In summary, the region will experience a period of great opportunities and increased competition for markets, resources, and talent as a result of Asia’s developing economies.
The Implications of Demographic Changes
The population of the world is ageing. Globally, one in five individuals will be at least 60 years old by 2050, effectively doubling the proportion of elderly to younger people. Singapore is no different; the ratio of working-age residents to each elderly citizen is anticipated to decrease from 5.9 in 2012 to 2.1 in 2030 at current birth rates and without immigration. Many Asian economies benefit from a population that is relatively young in profile. An ageing and dwindling labour force has adverse effects on our economy. Economic development will surely slow down if we are unsuccessful in expanding labour force participation rates and raising productivity.
Emergence of Disruptive Innovation
Aside from increasing the applications of automation to help reshape our industries, the emergence of disruptive innovative technologies strengthens our competitiveness and opens new capabilities. Apparently, it could pose a threat if our workforce are unable to keep up with technological advancements and other economies overtake ours by adopting and implementing the latest innovations.
The world keeps going through turns of depressions and recessions. As a result, the growth of many industries is diminishing. Fortunately, there have been some sectors that have consistently increased their revenue. Despite the economy-repressing global health crisis, some businesses are doing well thanks to continuous technological advancements. The following sectors are developing into fast-growing industries, considering their trend.
- Software & Technology
The hiring demands of all other industries are being driven significantly by the software and IT sector. According to the latest data, the need for software engineers has grown by 25% post-pandemic. That is because the demand for cutting-edge software and cybersecurity increases as technology develops and evolves. Most businesses nowadays have an online presence that needs to be secured and protected. The information technology industry is set to expand because of accelerated digitisation during the COVID crisis, pushing them to go cashless and digital. This industry is projected to flourish, with analysts in cybersecurity and ethical hacking becoming more significant in most firms.
- Banking & Finance
The financial sector continues to function regardless of how the global economy performs. Since the start of the pandemic, numerous organisations have had to hire external financial experts to rethink their budgets. Banking and financial literacy remain the key to assisting firms to continue operating when operations stall at the height of a crisis. In addition, the finance sector is seeing a lot of exciting developments because of the resilient property market and the issuance of digital banking licences.
Singapore is known for being a regional centre for healthcare. Patients from neighbouring countries, as well as from the Asia Pacific, United States, and Europe, are treated at its hospitals, nursing departments, and institutions. It is no surprise that this sector is expanding significantly. Additionally, the public health sectors and the industry as a whole are certain to grow with the addition of new community hospitals and polyclinics.
This sector contributes more than 20 percent to Singapore’s gross domestic product. However, the sector is facing increasing headwinds due to the slowdown in China, the United States, and European Union. Its output growth slowed to 0.5% year-on-year (2021-2022). The weakening growth momentum in the electronics industry, which accounts for 40% of total manufacturing sector output, has been a major reason for the slowdown of manufacturing output growth. Declining chemicals output also contributed to the weak outturn. This decline has been mitigated by significant growth in biomedical manufacturing and transport engineering. Overall, the total output growth during the first three quarters was up 4.4%. Even with the inflation pressures, it is expected to progressively but gradually increase year-on-year and remain relevant for the next decades.
Knowing the changes in the global economic landscape and its implications, the significance of emerging disruptive innovation, and the industries will help you decide to register a company that will remain relevant in the future.