Reinforcing technology activities is key to Singapore’s economic renaissance: MAS

The city-state is entering a new production frontier.

A paradigm shift towards high-tech products is sweeping the continent, and nations are left with no other choices but to innovate or be left out. Singapore is on the forefront of this shift, contributing high-tech and high-value goods and services anchored on its strong technology and innovation cluster.

Now, the city-state now turns its focus on intellectual capital as its next area of development.

According to the bi-annual macroeconomic review of the Monetary Authority of Singapore, the island nation’s labour force would need an engineered brew of technical expertise and soft skills in order to keep up with the demands of the frontier industries.

“The next phase of Singapore’s economic development will be characterised by a knowledge- and skills-based economy, with the associated productivity gains overcoming Singapore’s supply-side constraints,” MAS said.

Meanwhile, MAS says the steady development of Singapore’s technology and innovation is the cornerstone of the state’s long-term economic growth.

“EPG estimates show that technology and innovation activities, taken together, already accounted for around 18% of Singapore’s real GDP in 2014,” MAS said.

MAS also highlighted that while Singapore has been undergoing reconfigurations in the domestic electronics industry, it still has a long way to go in terms of improving R&D activities and cutting-edge technology compared to other advanced economies.

“For example, Singapore’s R&D intensity in the electronics space averaged 9.5% in 2009–13, lower than Korea’s 25%. 2 However, electronics accounted for a relatively higher share of nominal manufacturing value added in Singapore (28%) as compared to Korea (19%),” the review said.

However, MAS pointed out that generating a vibrant R&D ecosystem requires the coexistence of both the public and private sectors.

“For its part, the Singapore government has pledged to enable the development of R&D and innovation capabilities under the Research, Innovation & Enterprise (RIE) plans. Such consistent and firm support has resulted in steady growth in domestic R&D activities over the past decade, as measured by total expenditure, manpower employed and the number of organisations performing R&D,” the review said.