[SINGAPORE] The data centre sector is making an “outsized” contribution to Singapore’s economy and has created several thousand jobs directly linked to this sector – with above-average wages, said a paper by the Asia-Pacific Data Centre Association (APDCA).
The paper, citing a 2023 study commissioned by Amazon Web Services, said that data centres add more than S$2 billion annually to Singapore’s economy – nearly half the size of the total retail sector and larger than the entire hospitality sector.
The report said that 25,000 jobs are linked to the physical presence of data centres, with 7,000 people employed within these facilities and a further 17,000 supported through the data centre supply chain.
These roles are both high-paying and high-productivity, with wages 35 per cent above the national average and labour productivity 2.6 times higher.
Looking ahead, data centres in Singapore are projected to drive a 2.8-fold increase in jobs and an 8.9-fold growth in economic contribution by 2030 compared with 2022 levels, said the report.
The paper found that given Singapore’s land constraints, data centres demonstrate remarkable efficiency – generating 85 per cent higher land productivity than the average land use in the country.
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On a per hectare basis, data centres deliver S$59.9 million in economic value, which is almost double the national average.
Data centres have helped reduce business costs, the report said, without giving details. As many as 4,200 multinational firms serve as regional headquarters largely dependent on local data centres.
Data centre industry in Singapore, Malaysia, India, Australia and Japan
The study spotlighted the economic contribution of data centres in five markets – Singapore, Malaysia, India, Australia and Japan.
It highlighted the robust growth of the data centre industry in Malaysia.
Revenues are projected to reach RM3.6 billion (S$1.1 billion) by 2025, up from RM2.1 billion in 2022. This momentum is supported by strong government backing, with the Malaysian Investment Development Authority approving 12 major data centre projects totalling US$20.9 billion.
The sector is valued at US$4 billion in 2024, and is forecast to surge to US$13.6 billion by 2030, growing at a strong annual rate of 22.4 per cent.
Across the Asia-Pacific region, APDCA outlines the economic contribution of data centres via job creation and economic opportunity, unlocking artificial intelligence (AI) potential and enhancing a country’s attractiveness for foreign direct investments.
Data centres enhance connectivity and Internet infrastructure, accelerating cloud adoption and enabling countries to fully realise their AI potential, said the paper. A study by Accenture estimates that generative AI alone could contribute an additional US$4.5 trillion in economic value to Asia-Pacific’s largest economies by 2038.
The paper cited that every US$1 invested in IT and information services yields a US$1.64 increase in gross domestic product, underlining the strong multiplier effect of data centre investments.
