A silver-linings playbook for creating growth and good jobs in Singapore

Isdiyanah Dulkifli, 28, works at French multinational company (MNC) Schneider Electric in a role that cuts across the digital and green economies.

A graduate of NUS Business School, she bolstered her skills with on-the-job training and courses in analytics and automation. From Schneider Electric’s East Asia headquarters in Singapore, she uses digital tools to improve efficiency and sustainability at smart and sustainable factories across Asia.

At Swiss healthcare manufacturer Lonza, Soundararajan Selvaraj, 64, oversees operational excellence at its Tuas site.

He chose to make a mid-career switch from electronics about 20 years ago and devoted personal time to attain a Workforce Skills Qualification (WSQ) certification. This allowed him to join pharmaceuticals, an industry set to keep expanding in Singapore.

With the launch of Hyundai Motor Group Innovation Center Singapore last year, Neo Chin Chye, 45, is adapting his past skills and experience as a 3D artist and digital animation lecturer to contribute to a new industry. He is developing a Meta Factory, or a digital twin of an actual factory that will allow robots and humans to cooperate on the factory floor in new ways, furthering innovation in future mobility solutions, including electric vehicles, from Singapore.

These career stories show how Singapore has secured a place in global value chains, offering Singaporeans opportunities to secure good jobs and continue or embark on new careers, even as the economy evolves, restructures and grows.

As at 2022, there were 60,300 majority foreign-owned companies registered in Singapore, employing 1.2 million Singaporeans. Surveys indicate that most Singaporeans want to work for MNCs, due to the international exposure and the experience of performing at a globally-competitive level. Those with extensive MNC experience have been sought after for leadership roles in local enterprises, government entities and startups.

There is a good pipeline of investment projects here. In 2023, EDB secured investment commitments expected to create over 20,000 new jobs within the next five years.

The majority will be jobs for professionals, managers, executives and technicians for locals – with over half in services industries, more than a quarter in R&D and the rest in manufacturing.

But Singapore’s external operating environment is becoming more challenging. With Base Erosion and Profit-Shifting (BEPS 2.0) rules and the rise of industrial policies in many economies, tax incentives will become less effective, making competition to anchor high-quality investments stiffer.

We are refining our playbook to stay ahead of the competition. This means doubling down on what has worked well for us, strengthening Singapore’s industry capabilities to enhance our overall competitiveness and developing new growth sectors.

The good news is that we are doing this from a strong position. Budget 2024 measures will boost our toolkit and help businesses alleviate near-term cost concerns.

As interest rate rises moderate and demand for key exports improves, I am also cautiously optimistic that 2024 will yield positive investment and economic outcomes, barring any major shocks.
 

Growth by design

Many factors have worked in our favour. As an investment destination, Singapore remains unique in offering businesses a combination of stability, innovation, a skilled workforce and connectivity to a fast-growing regional market. Many hubs have one or two of these attributes but rarely a combination of four.

Stability is critical to anchoring Fixed Asset Investments (FAI) in physical facilities, equipment and machinery. The FAI commitments secured by EDB in 2023 were spread out across 10 sectors, with strong showings in chemicals, electronics, and biomedical manufacturing reinforcing Singapore’s value as a global manufacturing site for high-value products and a critical node in global supply chains.

Companies here account for more than 10 per cent of the global semiconductor market and 20 per cent of semiconductor equipment in the world. In 2023, British biopharma giant GSK – which employs over 1,500 people here - broke ground on a S$343 million expansion which will be its most advanced facility globally for the production and supply of drug substances for Hepatitis B vaccines worldwide. Japanese chemicals firm Mitsui expanded production of high-performance polymers used in solar cell components, sports shoes and automotive parts.

Our connectivity and location in the heart of Asia is why many MNCs – from US hypermarket chain Meijer to Indian tech leader InMobi - choose to put their regional or international headquarters here, locating decision-making and managerial control functions that are responsible for meeting business targets. In 2023, Total Business Expenditure figures (operating expenditure on wages, rentals and other services in Singapore) rose to S$8.9 billion. MNC projects involving HQs in 2023 doubled over 2022.

Innovation accounted for the larger 2023 investment commitments in R&D activities, which support product development here and help companies to stay competitive. Projects came from a mix of different industries. For example, Finnish energy company Neste, which has the world’s largest production facility for Sustainable Aviation Fuel in Singapore, is conducting research into renewable and circular solutions here to support its growth in APAC.

This shows how MNCs and foreign startups here find our research ecosystem and talent pool – made up of highly-skilled, technically proficient local and global talent - valuable in developing higher-value offerings for customers worldwide.
 

Doubling down on our priorities

With manufacturing making up a sizable one-fifth of GDP today, strengthening Singapore’s position as an advanced manufacturing hub will be a priority. Our focus will be on key sectors like semiconductors, biopharma & medtech, complex equipment and aerospace. Our strategy is to attract investments that make Singapore an indispensable part of global supply chains that have shifted and evolved in this new era of volatility.

Through expanding Singapore’s connectivity, logistics and supply chain management capabilities, we will attract more MNCs to use us as a base to serve Southeast Asia, and partner Asian conglomerates that want a springboard for international growth.

We will also attract more innovation projects here and anchor these through further developing the ecosystem, while growing new sectors like the digital economy, including AI, healthcare and the green economy.

Budget 2024 measures to catalyse AI activities, drive R&D, improve productivity and enhance energy efficiency and security will strengthen EDB’s investment promotion capabilities.

Specifically, the new Refundable Investment Credit (RIC) – essentially a tax credit with a refundable cash feature – gives us an additional tool to encourage companies to make sizeable investments in Singapore in key economic activities such as the expansion of manufacturing, new innovation and R&D and activities in support of the transition.

Enhancements to the Partnerships for Capability Transformation (PACT) scheme will help our local SMEs raise their capabilities to be suppliers and innovation partners of MNCs, making our ecosystem more competitive and attractive.

Since PACT was introduced in 2010, it has benefited more than 2,500 Singapore companies. Besides improving productivity and acquiring new technologies, SMEs have become qualified suppliers of a broader range of MNCs in growth sectors like healthcare and aerospace.
 

Preparing for the future of work

EDB looks for leading companies across the world in growing industries to invest in Singapore and create jobs.

Securing these investments has required the collective effort of government, industry and society to ensure the right policies, infrastructure, ecosystem and manpower capabilities are in place. As investments land, additional work goes into strengthening the ecosystem to further anchor companies already here, and to attract future investments.

With more countries stepping up efforts to attract Foreign Direct Investment, the collective will of Singaporeans – to seize opportunities that have presented themselves, work hard and give each other a helping hand – is crucial in ensuring Singapore retains its sweet spot with investors in the long-term.

From our conversations with globally-leading companies, we know the availability of talent and a quality workforce with up-to-date skillsets are among the key deciding factors in locating investments.

Besides traditional corporate functions, new jobs created by 2023 investment commitments were shaped by trends in sustainability, strengthening procurement and supply chain resilience, rising digitalisation and automation. Amid the rapid pace of technological change, we should expect the need for continuous upskilling and reskilling to accelerate across all industries.

This requires workers taking charge of refreshing and updating our own skills to stay relevant in the changing world of work in order to fully benefit from the new roles and opportunities in our midst. Enhancements to the SkillsFuture ecosystem for mid-career workers will offer additional pathways to level up and acquire skills to take on jobs of the future. For young ITE graduates, there will now be increased government support for them to upskill via a diploma course while being part of the workforce.

EDB will continue to work with companies, training partners and industry associations on different upskilling options so that any worker keen to upgrade themselves – regardless of background – will find that support is available. Online resources by e2i, SkillsFuture Singapore and Workforce Singapore and Institutes of Higher Learning offer a starting point to see what skills are in demand and where these can be acquired.

With more MNCs anchoring their regional operations here, they will need to build up their “A-teams” here, meaning more opportunities for Singaporeans to take up leadership roles.

Beyond stepping up efforts to develop capabilities for key sectors and new growth areas, EDB is also working to build a stronger Singaporean leadership pipeline. One ongoing initiative is the Singapore Leaders Network (SGLN), which is run by the Human Capital Leadership Institute to prepare up-and-coming Singaporeans for global corporate leadership roles. Since its launch in July 2022, it has grown to over 1,000 members, including established corporate leaders who are paying it forward as mentors.

These efforts will complement the facilitative talent policies that many MNCs appreciate – such as the Overseas Networks and Expertise (ONE) Pass and Tech.Pass for top talent - and the ease with which key personnel adapt to living in a safe and enjoyable city.

Ultimately, for Singapore to stay ahead of the competition and for Singaporeans to grow their careers by harnessing new opportunities, we will need to embrace a mindset of continuous upgrading and to develop “career resilience”.

This will entail continuous learning; making good use of available government programmes to upskill and improve employability; maintaining our openness to global business and talent flows; and leaving’s one comfort zone for overseas stints to build career capital for corporate leadership roles. In a more complicated global environment, let’s work together to capitalise on the silver linings and build a vibrant economy for Singapore and Singaporeans.

A version of this commentary was first published in The Straits Times on 25 February 2024.