Singapore is one of the world’s most prosperous nations, with a business-friendly regulatory environment and a very low unemployment rate. The government has always actively promoted industrialization for economic diversity. Singapore has an excellent port, and it was used to ferry goods between China and India, and between China and Europe. Today the growth of Singapore per capita income is at par with that of an Organization for Economic Co-operation and Development (OECD) country. The Singapore economy has undergone significant changes since the 1960?s. It has grown from a regional port and distribution centre in the 1960?s to an international manufacturing and service centre starting from the late 1980s, thanks to the policies adopted by the Singapore government. Singapore realized early on that it had limited natural resources, and that it had to concentrate more on manufacturing, technology and finance in order to thrive. Singapore has a history of technology enabled transformations as it has relied primarily on its workforce to produce exportable goods and services and attract foreign direct investments through multinational corporations. Its emphasis has been on educating its workforce through vocational and technical institutes to fulfill the demand for these skills by local and multinational businesses. Rapid industrialization was made possible by industrial policies of the government that were designed to change the industrial structure away from primary economic activities towards advanced industries that ensure further growth of the economy with an ultimate aim of enhancing the welfare of the nation. Singapore has contributed to positive growth and productivity increases especially after 1990, thanks mainly due to its focus on technology and prudent government policies. Recognizing the need to transform itself into a vibrant economy, the government of Singapore paid attention to efficient infrastructure that encouraged industry, and liberalization to attract foreign talent and investment. The year 1985 marked a demarcation in Singapore’s industrial policies. Prior to the recession in 1985, the emphasis of Singapore government was mainly on the attraction of foreign investment, technology absorption, and infrastructure development. At this time, the small economy of Singapore was traditionally dependent on trade. The recession made the Singapore government recognize the necessity to transform the country into a free port for manufacturers, which required penetration into overseas markets since the domestic market was extremely small to stimulate such a drive. Accordingly, the government emphasized the promotion of labour intensive manufacturing exports, such as shipbuilding, textiles, clothing, footwear, and leather industries. After the 1985 recession and especially after 1990, the government’s industrialization vision evolved with new initiatives and the integration of the opportunities brought about by globalization into industrial policies, in order to turn Singapore into what the government called a “total business center.” The experiment proved to be a success story, with Singapore transforming into a highly developed economy. In 2017, Singapore was ranked as the world’s second most open economy by the Heritage Foundation’s Index of Economic Freedom. As of 2020, it has improved its position to being the No. 1 free economy in the world. Doing business in Singapore is very easy, as the government encourages foreign participation, especially in technology sectors. Today, the Singapore economy is one of the most stable in the world, with no foreign debt, high government revenue and a consistently positive surplus. As a country, Singapore is best known for its ideal location, politically stable environment, business friendly policies and as the gateway to other parts of ASEAN.
Key Drivers of Singapore Economy
Singapore is located at the southern tip of Malaysia. Population wise, it has about one third the people of Delhi, India. Singapore has almost no indigenous hydrocarbon resources, but more than makes up for it by being one of Asia's major petrochemical and refining hubs. Like other ASEAN countries, Singapore too started to compete in labor-intensive manufactures. The changes in the external economic environment led the government of Singapore to revise its industrial policies and consider the promotion of industries with higher value-added such as electronics, chemicals, biotechnology, and precision equipment. New initiatives were put in place to improve the technological capabilities of Singapore based firms. Key technology upgrades that included extensive use of product design, development and manufacturing technologies such as CAD, CAE, 3D Printing. CAD and CAE were undertaken in collaboration with local and foreign firms,and academic institutions. Today, Singapore’s largest industry by far is the manufacturing sector, which contributes 20%-25% of the country’s annual GDP.
Key industry clusters in Singapore’s manufacturing include electronics, chemicals, biomedical sciences, logistics and transport engineering. The refining and petrochemicals industry too is critical to Singapore's economy, which continues to benefit from strong growth in regional demand for petroleum products. Almost 90 percent of Singapore's primary energy consumption comes from petroleum use, mostly for refining.
Close behind Singapore’s manufacturing industry is its financial services industry, which has enjoyed stable growth due to Singapore’s pro-business environment and political stability. Home to over 200 banks and a regional hub of choice for many global financial services firms, Singapore’s financial services marketplace facilitates the transfer of knowledge, processes, technology and skills between global, regional and domestic markets. Other emerging industries that are making significant contributions to Singapore’s economy include medical technology, aerospace engineering, clean energy, healthcare, and content development.
Over the past few years, some of the biggest technology companies have made Singapore a key base. Major key companies either have a presence in Singapore or have plans to do so. Singapore is also a hub for pharma companies and aerospace engineering. Global engineering software majors like Altair and 3D printer manufacturers like Stratasys have their teams in Singapore. Singapore is host to giant aerospace companies. These companies require professional engineering software for product design & modelling, analysis & simulation, design validation & 3D Printing that is developed by global leaders such as PTC, Altair & Stratasys.
CAD, data analytics, simulation, Altair provides, and 3D printers that Stratasys is famous for. The manufacturing sector of Singapore (pharma and electronic companies, the aviation sector and the oil refining industry) rely on CAD, CAE 3D printing, artificial intelligence (AI), virtual reality (VR), Internet of Things (IoT) and augmented reality (AR) solutions to retain their competitive edge. These technologies are part and parcel of Industry 4.0, which countries like Singapore and India have embraced wholeheartedly. Industry leaders in this field like Altair and Stratasys 3D printers have therefore made a base in Singapore. As the country is determined to retain its position as one of the top economic power in Asia, the leading manufacturers in Singapore will continue to rely on CAD and CAE solutions to propel its growth.