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Innovation key to attracting real estate investment, talent: JLL
IN today's technology-driven world, innovation-oriented cities with highly talented workforces have a competitive advantage. It's not just about having the latest technology. These cities are where investors want to be.
That's good news for Singapore, which is one of the most innovative cities in the world, according to JLL's latest Innovation Geographies Research. We found that the top nine global cities for innovation and talent concentration pulled in a third of all global real estate investment in the last 10 years. In Asia-Pacific, just seven cities accounted for over half of real estate investment volumes in the last decade.
Clearly, having an innovative culture has never been more important, and cities around the world are making rapid progress towards developing sophisticated, future-looking economies. The competition is heating up. Looking at things like foreign direct investment (FDI) in innovative industries, venture capital (VC), R&D expenditure and the number of international patent applications, our Index showed Singapore ranked third in the world for innovation, behind global leaders San Francisco and Tokyo.
Singapore's world-class infrastructure, business-friendly culture and efficient government were big supportive factors.
Singapore fares exceptionally well in attracting high-tech FDI. It ranks first globally for the dollar volume of high-tech FDI and second for the number of high-tech FDI projects, based on 2015-18 figures. Software & IT and semiconductors are two industries that do very well on this.
Singapore also fares well when it comes to attracting venture capital funding for its startups, with investment having grown at a CAGR of 84 per cent within the 2008-2018 period, topping US$6 billion in the past year. The number of startups attracting VC funding over the past three years was 555, compared to a global average of just 187.
These strengths put Singapore firmly in the "Innovation-centric" cluster of cities, alongside Toronto, Chicago, Amsterdam and Frankfurt. As well as Innovation, the city-state is also above the global average in our Talent Concentration Index, which measures the quality of domestic higher-education institutions, the demographic profile and employment in the innovation economy.
Singapore has three world-class universities that produce quality research in STEM subjects (Science, Technology, Engineering and Maths). As much as 45 per cent of its workforce holds an undergraduate degree, far higher than the global average of 34 per cent and above global cities such as New York and Tokyo, although trailing frontrunner London.
Only in demographics does Singapore not perform in the top tier, due to slow population growth of those between the age of 20 and 40 years old, also known as the "engine room" cohort. According to our data, the proportion of the population aged 20 to 40 years old is at 27.1 per cent, slightly below the global average of 29 per cent.
As Singapore goes all out to woo investors, it is in a strong position to maintain its competitiveness as a global knowledge hub and ensure its continued attraction for MNCs and businesses. The office market is robust, with demand growing 2.5 per cent year-on-year in 2018 and almost half of large technology multinational companies basing their regional headquarters here, more than any other city in Asia.
We believe Singapore can stay ahead of the competition by continuing to nurture its culture of innovation and entrepreneurship, which will ensure continued acquisition of global talent. In turn, this structural strength will ensure future growth and continued real estate investment.
- The writer is CEO, Singapore and South-east Asia, JLL