Singapore Economy in 2023: Manufacturing and Services as the Driving Force

As the year 2023 begins, Singapore is facing numerous challenges in its quest to maintain its position as a dynamic economic center. In response, the government has identified manufacturing and services as the key sectors that will drive economic growth and consolidation.

The Vision 2030 plan, announced in 2021, places great emphasis on these two industries. The goal is to create a favorable environment for event organizers and business leaders to flourish while maintaining Singapore’s international position. The success of these industries is critical to the nation’s future economic growth.

In recent years, Singapore has continued to make strides in becoming a world-class economic center. The country has achieved steady growth, continually innovated business solutions, and implemented advanced production methods. The government hopes that the new open policies and production platforms will make the country an attractive destination for event organizers and businesses to expand their network of relationships and exchange knowledge.

The government envisions Singapore as a future gathering place for modern factories equipped with a range of cutting-edge technologies, catering to business events. These technologies include robotics, artificial intelligence (AI), 3D printing, intelligent sensor intelligence, and the internet of things (IoT).

Despite the challenges faced in 2022, Singapore has made significant progress towards achieving the goals set out in the Singapore Manufacturing 2030 plan. In that year, the manufacturing sector recorded a decline of 3% compared to the same period in 2021. However, the electronics sector played a crucial role, and foreign investment capital recorded a prosperous record. These are positive signs for the last dismal economic year.

Singapore has been successful in attracting marginal investment from semiconductor giants such as GlobalFoundries and UMC. These companies aim to set up operations in Singapore, creating thousands of jobs for domestic workers.

GlobalFoundries, for example, plans to create around 1,000 jobs for personnel in Singapore. The company is constructing a new factory with a total area of more than 23,200 m2, with equipment installation and construction beginning in June 2022. The head office is expected to start operations in 2023, and the new facility will produce 450,000 wafers per year, bringing the total capacity of GlobalFoundries’ Singapore facility to approximately 1.5 million panels.

UMC also plays a critical role in plans to turn Singapore into one of the world’s leading semiconductor suppliers. The government aims to attract more foreign currency investment capital, strengthening Singapore’s role in the global semiconductor supply chain.

In the biomedical, health, and medical technology (MedTech) sector, Singapore has attracted global pharmaceutical companies to expand their operations. These companies have opened regional headquarters, such as Olympus’ Evident, and manufacturing plants, such as ResMed and MSD.

The government has supported this growth by providing funding for biomedical research and development and related sciences. A*STAR, the Science, Technology and Research Authority of Singapore’s Ministry of Trade and Industry, has embarked on a joint venture to boost the island nation’s bio-manufacturing capacity. The unit aims to enhance Singapore’s international standing while promoting new products and production technologies researched and used in Singapore.

In addition, the Grow Digital program was expanded by adding approved digital platforms, allowing small and medium-sized enterprises (SMEs) to establish effective access to new markets.

In terms of sustainable development, Singapore has announced plans to increase carbon tax rates gradually. The rates will rise from 5 USD/tonne to 25 USD/tonne in 2024, 45 USD/tonne in 2026, and 50-80 USD/tonne in 2030. This project sets higher standards for Singapore’s Asian counterparts, enhancing the island’s position as the dominant investment center in