Singapore has a highly developed, open, and appealing free-market economy with several sectors thriving due to government incentives, lack of red tape and transparent business environment offering robust opportunities at low investor risk.
Government support and a streamlined business setup process
The Singapore government provides various support measures to make it easier for companies to do business in the city-state. Apart from the fiscal and non-fiscal incentives, the country offers a stable socio-political environment, easy business setup, an attractive tax regime, and a plethora of free trade agreements to take advantage of.
Singapore’s efficient business environment is further demonstrated by the ease with which foreign investors can incorporate a business in the country. Registering a company can take as little as one day provided all the files are in order.
The private company limited by shares, commonly known as a private limited company, is the most preferred type of entity among foreign investors in Singapore. This entity is the most flexible, advanced, and scalable type of business form. Further, the Companies Act of Singapore allows for 100 percent ownership of Singapore companies by foreign persons or companies.
There are certain sectors in Singapore that are considered crucial for national security, such as telecommunications, broadcasting, domestic news media, financial services, legal and accounting services, ports, airports, and property ownership. In these sectors, Singapore has implemented some restrictions on foreign investment. According to Singaporean law, the articles of incorporation for businesses in these sectors can specify limits on the shares that foreign individuals or entities can own.
Further, Singapore has legal distinctions between foreign and local banks and the type of license they may get (i.e., full service, wholesale, and offshore banks).
Top industries in Singapore and the role of Industry 4.0
Singapore is well-positioned to face the challenges and reap the benefits of Industry 4.0. As an established regional powerhouse for advanced manufacturing, the country has already embraced Industry 4.0 and is steadily moving its production base up the value chain in various sectors.
Manufacturing
Singapore’s largest industry by far is manufacturing – contributing between 20 and 25 percent to the country’s annual GDP. Electronics manufacturing is the bedrock of Singapore’s manufacturing sector, contributing to approximately eight percent of the GDP and 20 percent of total manufacturing jobs. From its modest beginning as the only TV assembly plant in Southeast Asia, Singapore has become a vital manufacturing hub for higher value-added electronic components.
|
Singapore’s High-Value Manufacturing Capabilities at a Glance |
|
|
Biomedical sciences |
60 percent of the world’s micro-arrays are produced in Singapore. One-third of the world’s mass spectrometers and thermal cyclers are also produced in the country. |
|
Pharmaceuticals |
Four out of the 10 drugs by global revenue are manufactured in Singapore. |
|
Energy |
Singapore is the fifth largest exporters of refined oil in the world. |
|
Chemicals |
Singapore is ranked in the top 10 globally for chemical exports by volume. |
Industry 4.0 will impact operational processes and technologies used in Singapore’s manufacturing sector. This includes everything from automation and the application of the Internet of Things (IoT) to robotics and 3D printing. Manufacturers that can embrace Industry 4.0 stand to benefit from higher efficiency, cost savings, and a boost to bottom line growth. We explore key sub-sectors within Singapore’s manufacturing sector that can implement or have already implemented Industry 4.0 practices.
Medical devices
Singapore’s medical devices industry is expected to be worth US$1.3 billion by 2023 due to increasing government spending, an ageing local population, as well as demand from the region. More than 60 multinational medical technology (medtech) companies are leveraging the country’s strong engineering capabilities and high-quality assurance to manufacture high-value products, ranging from life science instruments to contact lenses.
The use of Industry 4.0 technology in the healthcare industry can deliver better care to patients. For example, AI can screen enormous amounts of data to recognize specific medical conditions that human diagnosis could easily miss. Moreover, AI tools can assist in running hospitals more efficiently, such as by identifying how staff and equipment can be better utilized.
Pharmaceutical and biomedical sectors
Singapore’s pharmaceutical and biomedical sectors are fast-becoming leading drivers of economic growth, showcasing both improved healthcare and manufacturing capabilities. The country’s deep base of skilled talents, probusiness environment, advanced infrastructure, and thriving research and development landscape has attracted some of the largest pharma firms in the world. This has resulted in Singapore being one of the few countries able to export more pharmaceutical products (approx. US$369 billion in 2020) than it imports (US$8.92 billion in 2020).
There are currently more than 50 manufacturing facilities in the country, with eight of the world’s 10 largest pharmaceutical firms owning plants in Singapore. Some of the major players include Abbott, GlaxoSmithKline, Novartis, and Pfizer, who account for more than 40 percent of Singapore’s regional market. German biotechnology company BioNTech, who developed the COVID-19 vaccine —BNT162b2 — with American pharmaceutical firm Pfizer, has established its Asia-Pacific regional headquarters in Singapore, where it will also set up an mRNA manufacturing facility.
The global pharmaceutical industry has already begun implementing Industry 4.0 practices with many pharmaceutical manufacturers switching from batch manufacturing to continuous manufacturing.
