2023 in Review: Singapore’s incentives and schemes for global businesses and local enterprises

From AI to supply chain to talent, innovation and sustainability, Singapore announced new incentives and schemes this year to support global businesses and local enterprises as they position themselves for growth. Here are the highlights:

INNOVATION

In Budget 2023, Finance Minister Lawrence Wong announced a new Enterprise Innovation Scheme (EIS) that enhances tax deductions for businesses working on five key activities that boost innovation. The tax deductions will be raised on qualifying expenditure for activities such as R&D conducted in Singapore, registration of intellectual property and innovation carried out with polytechnics and Institutes of Technical Education.

Besides the EIS, Singapore has other incentives and schemes to encourage businesses to upgrade their capabilities or expand the scope of their business operations here. EDB’s Corporate Venture Launchpad programme helps companies incubate innovative business ideas that have the potential to grow into globally competitive businesses from Singapore.

Global companies can also partner with Singapore government agencies to drive their innovation mandate in the region. This year, Johnson & Johnson International inked a first of its kind collaboration with EDB to boost life sciences innovation in the region. US biotech venture creation company Flagship Pioneering, best known for its role in backing Moderna, opened its regional hub in Singapore, seeking to boost new collaborations with the healthcare and life sciences industry in APAC.

SUPPLY CHAIN MANAGEMENT

Singapore is emerging as a preferred supply chain management (SCM) hub for manufacturers and brand owners to orchestrate regional and global supply chains, and build new capabilities for more efficient and resilient supply chain operations. As such, there is a growing demand for talent with advanced digital knowledge and skills in SCM.

In 2023, EDB and SkillsFuture Singapore launched the Supply Chain Management (SCM) Skills Plan - a one-stop reference document on the trends shaping new SCM jobs and the available reskilling support offered in Singapore. Click here to learn how businesses are futureproofing their supply chains from Singapore, and read more about trends in APAC supply chain networks, a report by consulting firm Gartner.
 

ARTIFICIAL INTELLIGENCE

Generative artificial intelligence (AI) is impacting existing industries and reshaping how business is done. Singapore is supporting companies in finance, e-commerce, healthcare, and professional services to develop technical prototypes for new AI applications through generative AI models.

Singapore continues to invest in AI research and development efforts, having already invested over $500 million in the last five years. On December 4, Singapore launched a renewed AI strategy that will see it:

• More than triple the number of AI practitioners, including machine-learning scientists and engineers to 15,000. This will be done by training locals and hiring from overseas
• Establish a dedicated site to nurture the country’s AI community
• Increase government incentives for the AI sector, including by backing accelerator programmes for AI startups and encouraging companies to set up AI “centres of excellence”

The “AI Trailblazers” initiative, launched by government agencies including Digital Industry Singapore, and Google Cloud, allows Singapore-based businesses to tap on Google Cloud’s AI toolsets to create generative AI products, hence accelerating the development and adoption of AI solutions.

“Our top priority is to be quite AI-forward as a nation, to establish Singapore as a thriving hub for AI innovation. To achieve this, we will continue to invest in the key enablers that support this vision,” said Jacqueline Poh, Managing Director of the Economic Development Board, at the Amazon Web Services (AWS) Public Sector Day conference in October 2023.

TALENT

Singapore has enhanced its workpass framework to attract complementary global talent, including those with skills in high demand. Take a look at the different hiring schemes and passes here.

In 2023, Singapore rolled out a new points-based Complementarity Assessment Framework (COMPASS) to assess Employment Pass (EP) applications for non-local employees. This is aimed at giving businesses greater clarity and certainty for manpower planning. New EP applicants will need to score 40 points to pass COMPASS, which considers several firm and employee-related attributes, such as the firm’s nationality diversity and the individual’s qualifications. Those in occupations requiring specialised skills that are currently in shortage are eligible for bonus points.

Singapore’s policies to attract global talent are in addition to efforts to develop and strengthen its local talent pool through training and upskilling programmes. There is also the Singapore Leaders Network (SGLN), which was formed to increase the global and regional exposure of Singaporean talent so that they can take up leadership positions in global firms.
 

SUSTAINABILITY

Singapore boosted its transition to clean energy this year, with three major initiatives around the use of hydrogen as a fuel source, clean energy imports and centralised procurement of natural gas announced at the Singapore International Energy Week 2023.

By 2035, businesses will be able to connect to up to 4GW of imported low-carbon electricity (making up 30 per cent of projected electricity supply) from regional power grids by 2035, alongside efforts to expand solar, energy storage and low-carbon alternatives.

Clean energy imports
Singapore’s energy regulator, the Energy Market Authority, granted six conditional approvals to import low-carbon electricity this year. In March, Keppel Energy was given conditional approval to import 1GW of low-carbon electricity from Cambodia. In September, EMA granted conditional approvals to five projects to import a total of 2GW of low-carbon electricity from Indonesia into Singapore. There are also plans for an ASEAN power grid to integrate the national power systems of the 10 member countries.

Solar, energy storage and low-carbon alternatives (including hydrogen)
Singapore intends to have at least 2GWp of solar capacity installed by 2030, allowing it to meet the annual electricity needs of about 350,000 households. As of end-2022, Singapore has a solar capacity of over 820 megawatt-peak and there is a collective effort to boost solar deployment across the public and private sectors, and individual households.

In February, SembCorp announced it had built a new, large-scale battery storage system on Jurong Island that can store excess solar energy generated in the day to be used at times of higher electricity demand. In July, Keppel held a groundbreaking ceremony for its new hydrogen-ready power plant, which will have a lower carbon footprint than conventional power plants and can operate on fuels with 30 per cent hydrogen content. In November, Tuas Power said it had signed an agreement with an Indonesian renewable energy company to import solar energy generated on Batam to Singapore.

Carbon services
EDB welcomes companies providing services such as carbon advisory, project development, trading and more to set up headquarters in Singapore. Close to 100 organisations here provide carbon services, and the International Emissions Trading Association launched its Asia hub in Singapore in June. That same month, Singapore-based carbon exchange Climate Impact X (CIX) launched its global spot trading platform to boost the liquidity of carbon offset trading and set a benchmark price for nature-based carbon credits. Singapore has also published a list of eligible host countries, programmes and methodologies under its International Carbon Credit framework, which will allow companies to offset up to five per cent of their taxable emissions beginning in 2024.

At COP28, Singapore and organisations based here announced new initiatives to support and accelerate the green transition in our region and beyond. Check out what these were here.