Singapore must capture opportunities in technology, the green transition and regional growth to counter protectionism and resource constraints
[SINGAPORE] Singapore aims for economic growth of between 3 and 4 per cent – or higher in “very good years” – despite challenges ahead, said Deputy Prime Minister Gan Kim Yong in Parliament on Monday (Sep 22).
There are opportunities to raise productivity through technology, and grow higher value-added industries such as precision medicine and artificial intelligence (AI), said DPM Gan, who is also Minister for Trade and Industry.
At the ministry’s Economic Dialogue in August, he had said that Singapore should use the current window of opportunity to achieve faster growth before it stabilises to the longer-term trend rate of 2 to 3 per cent.
On Monday, in the debate on the President’s Address, he reiterated this point, saying that a higher rate of growth in “the next few years” would leave the economy stronger when it settles to trend.
Singapore faces challenges of rising global protectionism, disruptive technological change, and domestic constraints on land, carbon and manpower, he said.
But there are opportunities for new investments as global companies look to diversify. The region also has high growth potential from its young population, rising middle class and strong physical and digital connectivity.
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Opportunities will also come from technology driving innovation, creating new products and new industries, he said, adding that the transition to a low-carbon economy would catalyse the growth of the green economy as well..
New economic blueprint
DPM Gan gave a recap of the new economic blueprint being developed in the Economic Strategy Review.
First, Singapore must strengthen its position in existing growth sectors and establish a strong foothold in new ones.
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Advanced manufacturing is one existing area, he said, noting that Singapore has become a global node in sectors such as semiconductors, healthcare, specialty chemicals and aerospace.
It has also strengthened its position as a hub in commodities trading, digital industries, financial services and professional services.
“We will build on this foundation to further reinforce Singapore’s status as a services hub for the region, especially with the fast-growing digital economy.”
Meanwhile, emerging areas include precision medicine – projected to expand 11 per cent annually to US$300 billion (S$385.3 billion) globally by 2035 – as well as AI and deep tech, the green economy, autonomous vehicles and space.
Second, Singapore must be “a home for leading firms”, attracting industry leaders and nurturing future ones.
Singapore already has “a strong base of industry leaders in key sectors” and will work with them to grow their businesses further and anchor high value-added activities here, he said.
Local leaders will get help to expand further. The government is looking into how it can give better support to local start-ups and entrepreneurs “from initial stages to scale-up and growth”.
Third, Singapore must stay competitive by strengthening its fundamentals: the capacity to deploy new technologies, its skilled workforce, and long-term planning.
The first two areas include accelerating the adoption of AI and training workers accordingly, and the third involves investments in infrastructure and climate efforts.
Expanding Singapore’s economic space
Highlighting the importance of trade to Singapore, DPM Gan said: “We must double down on our efforts to preserve and expand our economic space.”
This involves greater bilateral and regional cooperation, as well as working with partners to strengthen the rules-based trading system.
