Singapore Industry Sectors

Singapore is one of the original “Newly Industrialised Countries” (NICs) – a term coined in the 1970s to describe countries experiencing exceptionally fast industrial growth – alongside Hong Kong, South Korea and Taiwan. Between the 1960s to the 1980s, the manufacturing industry, in particular, was able to attract numerous Multi-National Companies (MNCs) and Foreign Direct Investment (FDIs) into the country.

Singapore is one of the original “Newly Industrialised Countries” (NICs) – a term coined in the 1970s to describe countries experiencing exceptionally fast industrial growth – alongside Hong Kong, South Korea and Taiwan. Between the 1960s to the 1980s, the manufacturing industry, in particular, was able to attract numerous Multi-National Companies (MNCs) and Foreign Direct Investment (FDIs) into the country. This in turn was the foundation for Singapore’s economic growth to become one of the most advanced and technologically driven economies in the world.

Today, Singapore is considered to be one of the most industry-friendly countries in the world. According to the 2011 Index of Economic Freedom, Singapore is the 2^nd freest economy in the world. Singapore’s business freedom score is exceptionally high – it takes three days to start a business in Singapore compared to the world’s average of thirty-four days. Apart from strong business and regulatory policies, other factors such as the country’s strategic geographic position, a vast natural seaport, a highly skilled workforce and a favourable tax regime, have created a conducive business environment for companies and industries.

Singapore’s Industry Sectors

Singapore’s agriculture is virtually non-existent. In 2010, it contributed to zero percent of the GDP. Although Singapore continues to retain a small agriculture base – the farming sector produces poultry, eggs, pork, some vegetables and fish – domestic demand for food far outstrips the local supply. As such, Singapore imports a vast amount of its food from overseas markets such as China, Indonesia, Thailand and Australia.

In 2010, industry was responsible for 27.2 percent of Singapore’s GDP. Since the country’s independence in 1965, manufacturing continues to be a key industry for Singapore. Electronics manufacturing in particular has been the cornerstone of the economy for more than forty years. In the past decade, digital technologies manufacturing has been the thriving industry for Singapore.

Despite being a world leader in digital and electronics manufacturing, the Singapore government has also diversified into other forms of manufacturing. Biomedical and pharmaceutical manufacturing promises to be the next evolution of the manufacturing industry in Singapore. Furthermore, new government initiatives have been introduced to spur new industries while maintaining and strengthening present industries through the use of advanced technology.

Petroleum and petrochemicals is another base of Singapore’s industrial and economic life. Singapore has the third largest oil refinery in the world, behind Rotterdam and Houston. The Singapore Petroleum Company (SPC) is a leading player in the petroleum industry and is engaged in exploration, production, refining and distribution. Remarkably, despite not having a single drop of proven oil reserves in the country, Singapore is a net exporter of oil – exporting 1.374 million barrels of oil/day and importing 1.195 million barrels/day. This makes Singapore the 18^th largest exporter of oil in the world.

Services though, remain the largest contributor to Singapore’s GDP. In 2010, services was responsible for 72.8 percent of the GDP. The banking and finance industry as well as tourism are the key components of the service industry.

Singapore is an important global financial centre. The financial centre is extremely diverse and includes services such as banking, the Asian dollar market, foreign exchange market, bond market, equity/derivatives markets, asset management and insurance. These services are in turn supported by an efficient regulatory system, a highly advanced infrastructure, a well-trained labour force, and a pro-business environment.

As such, Singapore’s finance industry has attained numerous international accolades. Singapore’s banking system is considered to be among the strongest in the world. Singapore also has the fourth largest foreign exchange market in the world after London, New York and Tokyo. The Singapore Government Securities is the only Asian market, besides Japan, to be part of the Citigroup World Bond Index. The Singapore Exchange (SGX) was also the first demutualised, integrated securities and derivatives exchange in Asia-Pacific. Singapore is also recognised as one of the premier asset management centres in Asia with more than 200 international asset management firms. Finally the Asian Dollar Market in Singapore has become an influential element to the economic development of the whole of Asia with assets of more than US$582 billion recording in 2004.

Tourism is the other major service industry available in Singapore. In 2010, tourist arrivals to Singapore hit a record high of 11.638 million visitors with tourist receipts of more than S$18.8 billion. Thanks to government initiatives, tourism is also diversifying into niche markets such as medical tourism, the gaming industry and the MICE (Meetings, Incentives, Conferencing and Exhibitions) industry. With the advent of the two new integrated resorts in 2010, tourism expenditure in sightseeing and entertainment grew by an astonishing 1,834 percent in 2010. [Note: that’s a comma and not a decimal place]

As such, after two years of negative industrial production growth due to the global financial crisis, Singapore’s industrial production growth rate for 2010 was the third highest in the world at 25 percent – behind Qatar and Taiwan. The list of industries in Singapore include electronics, chemicals, financial services, oil drilling equipment, petroleum refining, rubber processing and rubber products, processed food and beverages, ship repair, offshore platform construction, life sciences, and entrepot trade.