Singapore must sharpen its distinctiveness to secure future in ‘a very different world’

FOR some time, Singapore has conscientiously positioned itself as a location for regional headquarters, riding on its strategic location, robust and stable infrastructure, business-friendly environment and skilled workforce. 

There has been considerable success. Foreign direct investment into Singapore reached S$192 billion in 2024, an increase of 5.6 per cent year on year. Notably, global multinational corporations have been using Singapore as a hub for research and development and regional HQs, while deploying operations across neighbouring Asean countries.

Yet, amid the “Navi” (nonlinear, accelerated, volatile and interconnected) state of affairs today, this proven approach could be challenged for its long-term relevance. 

Shifting equilibrium in global geopolitics, uncertainty in trade and tariffs and the rapid rise of emerging technologies and climate risks are bringing swift impacts at all levels – from the country’s economy to business ecosystems and right down to individuals. The intersection of these trends, such as the weaponisation of trade and technology, creates further far-reaching complexities. 

How can we refresh what has worked, or reimagine the possibilities, as comfort zones narrow, competition widens, and socioeconomic pressures intensify?

As Prime Minister Lawrence Wong pointed out at the National Day Rally, a “new economic blueprint” is needed to “secure Singapore’s future in a very different world”. The recently unveiled Economic Strategy Review, with new committees to address global competitiveness, technology and innovation, entrepreneurship, human capital, and impact of restructuring, is expected to help chart the path forward.

Competitiveness today is no longer just about efficiency or cost. It is about value creation. To continue to shine and secure its position as a key node in global value chains, Singapore must double down on its strategic capabilities.

Three key aspects have distinguished Singapore – and must be honed to make it even more distinctive. 

Investment in deep tech

First, in the digital-led and artificial intelligence (AI)-powered future, it pays to lead in developing deep tech infrastructure. If deep tech is to be the engine of the new value chains, Singapore must vie to be one of the high-performance hubs. 

Investments in deep tech infrastructure are fundamental to supporting and catalysing the economic opportunities in AI, biotechnology and advanced manufacturing. Singapore is currently home to global R&D centres and a vibrant semiconductor ecosystem. We have also been actively growing capabilities in AI and quantum technology. 

To entrench our position in deep tech, it is crucial to scale up our national compute capacity, effectiveness and governance. Core to this is nurturing the talent pool and pipeline in this fast-evolving field. 

The potential lag in talent development is a real and present risk. Past experience in implementing Industry Transformation Maps (ITMs), which provides clear frameworks for local enterprises embarking on digitalisation, green transition and upskilling, shows that moving enterprises and workforce up the curve can take time and significant change management. 

These ITMs will now need to evolve for next-generation capabilities in AI and sustainability, to enable every firm, big and small, to not just digitalise but transform at its core – sustainably and with AI. Equally important is to invest in nurturing bold, homegrown deep-tech ventures. Public-private capital must go further upstream to fund these ventures before they turn bankable. 

Agile policies and regulations 

Singapore is known for its transparent, stable regulatory environment – but what sets it apart is the ability to regulate responsively and anticipatively. Today, rules cannot just keep up; they must lean in. Keeping regulatory and intellectual property (IP) frameworks robust and agile will be important enablers.

Public-private testbeds and regulatory sandboxes in fintech, health tech and AI have allowed innovation to be tested safely in Singapore. This latitude for innovation must continue for technology diffusion to happen – and quicker – across our business ecosystems. Regulatory frameworks must enable innovation, manage risks early and evolve fast.

In addition, the country’s data protection trust mark, cross-border data agreements and IP protection regime are already among the strongest globally.

In the AI age, Singapore can aspire to be the place where digital trust frameworks are tested and regional data governance models are pioneered. In other words, be the trusted hub where innovations of the future can be safely prototyped, funded and scaled across borders.

A critical node

To create enduring value, Singapore must be more than a hub for goods and capital. It must be the critical node where goods, capital, data, people and ideas converge, amplifying the power and upsides of their intersection. 

Our strong connectivity – both physical and digital – with the world is an enduring attribute. The country’s world-class ports and airports, as well as well-established institutional and digital connectivity enabled by free trade arrangements and digital economy agreements, underpin this advantage. It continues to be highly relevant for Singapore to expand more digital corridors beyond Asean to India, Japan, Middle East and Africa. 

At the same time, the country should press on with its dual-pronged strategy of attracting multinational companies, hyperscalers and startups to anchor their regional and high-value activities locally, while serving as a springboard for them to internationalise and tap into regional neighbours for cost advantages.

Towards inclusive growth

Beyond that, can Singapore be the hub that forges future-ready talent and champions the diffusion of knowledge and skills across the region to help uplift extended business ecosystems? 

I believe we can. Our inimitable value lies in combining in-demand technical expertise with qualities like critical thinking, ethics, acumen and entrepreneurial courage.

With sharpened focus in these areas, Singapore can set itself up to confidently punch above its weight and secure success in its next chapter of growth. This pursuit will arguably be no less challenging than the first 60 years of nation-building. But if Singapore and its people can commit to a “we-first” and inclusive growth mindset, then success will be sweeter when shared.

The writer is EY Asia East deputy regional managing partner, Asean managing partner and Singapore and Brunei country managing partner at Ernst & Young. The views here belong to the author and do not necessarily reflect the views of the global EY organisation or its member firms.