Credit By: CNBC
Singapore’s digital economy has continued its impressive growth trajectory, contributing over 17% to the country’s Gross Domestic Product (GDP) in 2022, a substantial increase from the 13% reported in 2017. This expansion is attributed to a comprehensive study conducted by Singapore’s Infocomm Media Development Authority (IMDA). The report, published recently, outlines the substantial economic impact of the digital sector, with contributions reaching SGD 106 billion ($77.5 billion) in 2022, up from SGD 58 billion in 2017.
The Digital Economy’s Two Pillars
Information and Communications Sector:
A significant portion of Singapore’s digital economy, approximately one-third, is driven by the information and communications (I&C) sector. This sector plays a pivotal role in providing crucial services, including telecommunications, computer programming, IT consultancy, cloud computing, and software development. These services have experienced significant demand, fueled by the dynamic tech landscape and evolving business needs.
Digitalization Across Industries:
The remaining two-thirds of Singapore’s digital economy is powered by digitalization across various industries. This facet measures the value generated from investments and spending in digital capital across all sectors, except the I&C sector. This includes economic outcomes stemming from firms investing in digital technologies to enhance customer outreach, optimize business processes, and innovate products and services.
Tech Manpower Growth and Enterprise Adoption
The report highlighted that the expansion of Singapore’s digital economy is intrinsically linked to the increasing adoption of digital technologies by enterprises. This adoption, in turn, contributed to the robust growth of tech manpower in the country.
The number of tech professionals employed across all sectors saw significant growth, rising from approximately 155,500 in 2017 to 201,100 in 2022. Despite some fluctuations in the tech sector job market, the demand for tech jobs is projected to remain resilient as Singapore’s digital economy continues to evolve.
Singapore’s thriving digital economy is a result of more firms embracing and implementing digital technologies. The technology adoption rate among businesses surged from 74% in 2018 to an impressive 94% in 2022, according to IMDA’s annual survey.
Key Sub-Sectors Driving Growth
The information and communications sector has been a driving force, with certain sub-sectors experiencing double-digit growth rates, as high as 70%. This surge was largely fueled by increased adoption during the Covid-19 pandemic.
The gaming industry witnessed significant growth, with more individuals turning to digital entertainment during lockdowns and remote work.
2. Online Services:
The demand for online services, including streaming, e-learning, and telemedicine, soared, leading to substantial growth in this sub-sector.
E-commerce experienced a substantial boost, with consumers increasingly relying on online shopping during the pandemic, leading to an impressive growth rate.
Digitalization’s Impact on the Broader Economy
The value-add resulting from digitalization in various sectors, such as finance and insurance, wholesale trade, and manufacturing, surged from SGD 38.6 billion in 2017 to SGD 72.8 billion in 2022. Consequently, the value-add from digitalization as a share of the economy saw a steady increase from 8.7% in 2017 to 11.9% in 2022. This growth rate equates to a remarkable annual compound growth rate (CAGR) of 13.5%, far surpassing the 3.8% GDP growth rate in 2022. This positive development showcases the promising investment returns offered by Singapore’s digital economy.
Singapore’s Commitment to a Tech-Savvy Workforce
The Singapore government is fully dedicated to fostering a competitive digital economy and nurturing a technology-skilled workforce. Deputy Prime Minister Lawrence Wong, in his budget proposal for 2022, committed SGD 200 million over the next few years to projects aimed at enhancing digital capabilities among businesses and workers.
Singapore’s digital economy has not only weathered the challenges presented by the Covid-19 pandemic but has thrived. With a strong emphasis on technology adoption, a tech-savvy workforce, and a government committed to digital transformation, Singapore is poised to continue its impressive growth in the digital sphere, contributing substantially to its GDP.
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