Introduction
Singapore needs little introduction to businesses. Since its independence in 1965, Singapore’s economic growth has made it a success story among Asian economies – and is the only Southeast Asian country among the “Four Asian Tigers” (with the remaining three “Tigers” from East Asia). Even to this day, within Southeast Asia, Singapore has topped economic metrics such as GDP per capita (see Figure 1).
Figure 1: Top 3 ASEAN countries by GDP per capita in USD (2021) 1
While other Southeast Asian countries (e.g., Indonesia, Vietnam) may have larger populations and trade volume than Singapore, the latter’s governmental support and highly skilled workforce have allowed (and will continue to allow) Singapore to remain competitive. By looking at Singapore’s economy in detail, we will be able to better understand the characteristics of the Singapore economy.
To that end, in the subsequent sections, we will discuss more about the top three industries that contribute to Singapore’s economy (see Figure 2): (1) manufacturing; (2) wholesale; and (3) finance/insurance.
Figure 2: Top 3 Industries in Singapore by contribution to GDP (2022) 2
Manufacturing in Singapore
With its small land size and population, Singapore may not appear to be a manufacturing powerhouse. But in truth, manufacturing is a significant industry to Singapore – contributing approximately 22% of the city-state’s GDP (i.e., 139 billion SGD). Based on data made available by Singapore’s Department of Statistics, there are 9,540 manufacturing companies and 358,000 workers in the manufacturing industry.
Most of Singapore’s manufacturing output efforts go to highly sophisticated products, such as semiconductors, refined petrochemicals, machinery etc. (see Figure 3). As opposed to the usual formula of manpower-driven manufacturing (utilised heavily by countries like China), Singapore’s manufacturing industry makes use of its educated population to operate automated and technology-driven processes required to assemble its manufactured goods.
Figure 3: Top 4 Manufacturing Subsectors by Output Value in billion SGD (2022) 3
Being the main industry driving Singapore’s economic growth, the Singapore Government has been supporting its manufacturing capabilities. The most recent initiative is called “Manufacturing 2030”, which is a 10-year of continued investment into the manufacturing industry and push towards Industry 4.0 (widely regarded as the next stage of manufacturing, driven by automation, data analytics etc.). According to then-Minister of Trade and Industry (MTI) Chan Chun Sing, Singapore will aim for a growth of 50% for its manufacturing industry and to maintain at least 20% of Singapore’s GDP (i.e., the status quo) in the coming years. 4
Wholesale in Singapore
Trailing behind manufacturing, wholesale trade is Singapore’s second largest contributor to the country’s GDP at around 19% (i.e., 119 billion SGD). Singapore prides itself as a transportation hub, featuring important trade hubs such as Changi Airport and the Port of Singapore. These hubs are part of the busy trade routes from Europe/Middle East to Asia, bringing a massive supply of goods across the world. According to Enterprise Singapore, Singapore is home to over 34,500 wholesale companies and over 300,000 workers are part of this industry.
While Singapore’s wholesale industry deals with a wide variety of goods, some of the main products distributed by Singapore include products related to shipping, petroleum and electronic components (e.g., bunker fuel, crude oil, semiconductors). These two subsectors have maintained positive sales scores for both domestic and foreign wholesale trade (see Figure 4). The overlap between the products manufactured and distributed by Singapore is evident of the city-state’s economic strategy – to focus on manufacturing and distributing high-tech electronics and refined petroleum goods for the global economy.
Figure 4: Top 3 Subsectors by YoY change in Wholesale Trade Index (as at Q4 2022) 5
Similar to the manufacturing industry, the Singapore Government is committed to the wholesale industry’s continued growth in the 21st century. Dubbed the “Wholesale Trade Industry Transformation Map 2025”, the initiative aims to further strengthen Singapore’s wholesale trade infrastructure. The initiative, according to Enterprise Singapore, consists of the following four strategies: 6
- Capture growth opportunities in new markets and sustainability (e.g., local export via e-commerce, market entry via global traders, Singapore as a carbon trading hub etc.)
- Anchor innovative activities by global traders (e.g., create opportunities for innovative partnership between Singapore companies and global traders)
- Grow globally competitive Singapore traders (via partnership with trade associations and SME Centres)
- Create new and exciting roles for Singaporeans (e.g., specialised roles such as data analysis and carbon footprint management)
Finance/Insurance in Singapore
With Singapore regularly dubbed as a major financial hub in Asia, it may be surprising to see the finance/insurance industry taking third place in terms of GDP contribution at around 13% (i.e., 86.9 billion SGD). As compared to the quantity of companies and workers in manufacturing or wholesale, the finance/insurance industry consists of around 1,200+ companies (e.g., banks, insurance agencies etc.) and 170,000 workers. Despite that, Singapore’s finance/insurance industry is involved in massive amounts of assets/premiums (see Figure 5).
| Subsector | No. of companies | Total assets/premium |
|---|---|---|
| Commercial banks 7 | 150 | 2 trillion USD |
| Life insurance 8, 9 | 217 | 6.5 billion SGD |
| General insurance 8, 9 | 217 | 16.7 billion SGD |
Similar to other major industries, the Singapore Government has developed its plan to enhance the country’s finance/insurance industry in the coming years. Called the “Financial Services Industry Transformation Map 2025”, the Monetary Authority of Singapore’s plan comprises of the following five strategies: 10
- Enhance asset class strength (e.g., strengthening foreign exchange, capital market, FinTech etc.)
- Digitalise financial infrastructure (e.g., development of digital infrastructure and platforms)
- Catalyse Asia’s net-zero transition (e.g., development of innovative and sustainable solutions)
- Shape the future of financial networks (e.g., development of digital payment solutions/network)
- Foster a skilled and adaptable workforce (e.g., training next-generation financial services professionals)
To Collaborate with Singapore
A common theme among the top three industries in Singapore is the Government’s involvement in their growth, which trickles downward to the industry and the workforce. Moving forward, digitalisation and sustainability are very likely the next steps for the Singapore market to remain competitive in the 21st century.
But of course, Singapore cannot accomplish its development alone. Singapore will certainly welcome contributions from foreign companies, provided that they can assist Singapore’s quest towards further growth. To that end, foreign investors and companies should take into consideration Singapore’s major industries and future trends when entering the Singapore market or working with Singapore companies.
As a consulting firm specialised in overseas business expansion, GPC has many experiences in helping our Japanese corporate clients with their business expansion in Singapore. Our track record includes (but is not limited to) market research and business matching targeting the Manufacturing and Wholesale/Retail sectors of Singapore.
If you would like to find out more on how we can support your company’s business expansion in Singapore, kindly contact us by clicking the “Contact Us” button below.
Sources
- ASEAN Statistics Yearbook 2022. Retrieved from: https://www.aseanstats.org/publication/asyb2022/
- Department of Statistics (DOS). “Singapore Economy”. Retrieved from: https://www.singstat.gov.sg/modules/infographics/economy
- DOS. “Manufacturing Output In Manufacturing By Industry, Annual”. Retrieved from: https://www.singstat.gov.sg/find-data/search-by-theme/industry/manufacturing/latest-data
- Economic Development Board. “Singapore seeking frontier firms for ‘Manufacturing 2030′”. Retrieved from: https://www.edb.gov.sg/en/business-insights/insights/singapore-seeking-frontier-firms-for-manufacturing-2030.html
- DOS. “Wholesale Trade Index – Fourth Quarter 2022”. Retrieved from: https://www.singstat.gov.sg/-/media/files/news/wti4q2022.ash.
- Enterprise Singapore. “Wholesale Trade Industry Transformation Map 2025 to grow globally competitive Singapore traders and expand Singapore’s trade”. Retrieved from: https://www.enterprisesg.gov.sg/-/media/esg/files/media-centre/media-releases/2023/january/mr00123_wholesale-trade-industry-transformation-map-2025-to-grow-globally-competitive-singapore-traders-and-expand-singapore-trade.pdf
- Monetary Authority of Singapore (MAS). “Banking”. Retrieved from: https://www.mas.gov.sg/regulation/banking
- Statista Research Department. “Number of insurance companies by type from 2014 to 2023”. Retrieved from: https://www.statista.com/statistics/1315827/singapore-number-of-insurance-companies-by-type
- Ministry of Trade and Industry. “Economic Survey of Singapore”. Chapter 6: Sectoral Performance. Finance and Insurance.
- MAS. “Financial Services Industry Transformation Map 2025”. Retrieved from: https://www.mas.gov.sg/development/financial-services-industry-transformation-map-2025
