Given the ongoing threat of trade wars between the United States and China, there is one nation that is quietly going about its business with the aim of fulfilling its potential as the world’s next technology hub. The city-state of Singapore may be minuscule in comparison with the superpowers of the U.S. and China, but it is rapidly becoming a destination that provides the talent, finance, and infrastructure for the world’s next tech startups to thrive.
There is a genuine desire in Singapore to recreate the vibrancy and innovation of America’s Silicon Valley. This was the environment that fostered the growth of today’s tech giants such as Apple and Google. The CEO of Hewlett Packard Enterprise, Meg Whitman, already believes Singapore has become a “miniature Silicon Valley,” with four-fifths (80%) of the world’s top 100 tech businesses now having a base in Singapore.
The country’s government has already had a big hand in Singapore’s evolution as a global tech hub. It has committed to a five-year plan to invest $19 billion into science and technology research and development (R&D). This, in turn, has helped Singapore become a knowledge-based, innovative society, which has also worked to futureproof the Singaporean economy.
So, why has Singapore become an instant attraction for well-established global tech conglomerates as well as those looking to disrupt the tech scene? On the face of it, there appears to be a quintet of benefits to working and innovating in Singapore.
A strong Singaporean dollar
Taking a long-term view, the Singaporean dollar has remained strong and stable against the most influential global currencies such as the US dollar. Over the last five years, the US dollar has fallen from highs of $0.80 per Singaporean dollar to around $0.74 today. The beginning of 2019 was also encouraging for the Singaporean dollar against other leading economies in Oceania. The Australian dollar has recently been outperformed by its Singaporean counterpart, with the Singapore dollar now worth $1.02 Australian dollars, up from $0.85 in 2014.
In the 2018 Global Innovation Index, Singapore moved up two places into the fifth spot globally, while cementing its position as the most innovative country in Asia. The city-state is still streets ahead of Japan and South Korea, which were ranked 13th and 12th globally. China is regarded as the 17th most innovative nation.
The Global Innovation Index is a report carried out by the World Intellectual Property Organization (WIPO), Insead, and Cornell University. It measures 126 of the world’s most influential countries based on 80 criteria. Singapore was ranked top of the class in terms of foreign direct investment inflows, as well as it’s high and medium-high-tech manufacturing and high-tech net exports. Much of this success is underpinned by the fact that Singapore is also ranked number one in the index for regulatory quality, fostering high-end output, and optimal protection for consumers.
The city-state’s business climate is an integral reason why tech giants such as Amazon and Apple have made their move into southeast Asia, becoming one of the leading tech employers in Singapore. Amazon has rapidly onboard new employees in Singapore to assist in the launch of its Prime and AmazonFresh services. The e-commerce market in south-east Asia as a whole is expected to be worth $200 billion by 2025.
Meanwhile, Apple has long been the most popular employer for Singapore’s university graduates, with its young talent citing the brand’s mindshare and its coolness as two key reasons why working for Apple in Singapore has been such a big goal for local graduates.
Despite the drop in share price following the release of each of Apple’s recent flagship smartphones, as can be seen above, Apple remains perhaps the biggest name in mobile tech. It is then perhaps surprising to see this drop. However, the release of each device is often accompanied by widespread praise, meaning anyone looking to trade on changes in share price through contracts for difference (CFD) can often take advantage of this early skepticism.
Well-enforced IP protection
In the fast-moving tech sector, intellectual property (IP) is everything to startups and conglomerates alike. Singapore’s IP legislation is exceptionally watertight, and it is enforced to the letter. In fact, the World Economic Forum regards Singapore’s IP regulatory framework as the fourth best on the planet and the most dependable throughout Asia. This is vital for innovative tech startups looking for a hub that is committed to protecting startups’ collective investments in R&D.
Singapore boasts one of the most technologically advanced IT infrastructures on the planet. Not only does its infrastructure connect with all four corners of the globe via the city-state’s numerous bilateral and regional free trade deals, but its lightning-quick connectivity is a major boon for tech start-ups. New tech innovators that land in Singapore can immediately avail themselves of state-of-the-art IT that was recently regarded as the best digital infrastructure by the Economist Intelligence Unit’s Asian Digital Transformation Index.
Singapore isn’t resting on its laurels either. It is working hard to maintain its position as a world leader in connectivity. The much-vaunted rollout of the city-state’s new 5G network could cement its mobile future for decades ahead. It promises to bring yet another tech revolution both in terms of connectivity speeds and the development of new applications.
A broad pool of talent
The fifth and final attribute that Singapore boasts, making it suitable to become a global tech hub, is its extensive pool of highly-skilled talent. Without an army of talent, dynamism, and flair, technology can only get businesses so far, which is why even the biggest conglomerates such as Apple and Amazon, have become key employers in Singapore. Dyson’s recent decision to relocate its headquarters from the UK to Singapore to “futureproof” its operations is further proof that the city-state is now a key strategic region for global innovators.
In fact, Singapore is the only Asian nation in the top ten of the Global Talent Competitiveness Index, with it’s melting pot of cultures, creating a hugely inspiring city within which to live and work.
In fact, there is an argument to suggest that Singapore isn’t the next global tech hub: It is already a global tech hub, one which intends to continue to push the boundaries of what’s technologically possible. Given its safe haven in geopolitical terms compared with the U.S. and China, Singapore’s ambition and existing framework of licensing protocols and export controls make the island a perfect fit for overseas tech startups to land and expand.