Increasing Global Hub Importance
The first pillar of Singapore’s expected growth is its ability to foster its status as a global hub. The nation’s public and private sectors are introducing initiatives to continue attracting talent and businesses, building on its well-known public safety, educated workforce, high standard of living, extensive network of free trade agreements and solid infrastructure.
As a financial hub, Singapore is already globally relevant in currency, regional insurance, financing and asset-gathering.
In commodities trading, the local market, which already accounts for 20% of the world’s energy and metals trade, could develop itself into a leading hub for liquid natural gas and carbon trading.
“Singapore has the opportunity to become Asia's leading global financial hub over the next decade and can begin to close the gap with London in terms of global significance,” Lord says.
In transportation and tourism, the country continues to improve air transportation options and infrastructure, while also hosting global events and creating well-designed attractions. Tourism contributes to about 4% of Singapore’s GDP.
Finally, the country is heavily investing in technology infrastructure to become a data and AI inference hub. Singapore, Malaysia and Japan are likely to get a majority of the tech sector’s $100 billion in investments in Asia data centers and GenAI this decade.
A Plan to Reinvigorate the Equity Market
Despite Singapore’s vibrant economy, many investors consider it an illiquid safe haven, with just a few investable bank and real-estate stocks.
That is about to change. The government introduced this year new policies to reinvigorate the local stock market and attract new listings as the second pillar of Singapore’s growth. The measures already included tax incentives, policy changes and an unprecedented capital injection of $4 billion from the Monetary Authority of Singapore (MAS) to provide liquidity, especially for small- and mid-cap stocks.
Regulators are also considering a program to encourage listed companies to more actively engage shareholders on their business plans and value propositions.
“These initiatives demonstrate that there is political will to reinforce Singapore's position as a global financial center,” Lord says. “New rules and support for the local stock market should ignite investor interest and confidence in Singapore, and potentially boost valuations for many years.”
The equity market reform could lead to an increase in the local price-to-book value rate from 1.7 to 2.3 by 2030, raising Singapore to the level of higher-rated markets like Taiwan and Australia.
Gains From Early Adoption of Technology
A third pillar to Singapore’s economic development comes from its early adoption of new technologies. The country already ranks among the top 10 AI markets worldwide and is home to more than 80 AI research faculties, 150 AI R&D and product teams, and more than 1,000 AI start-ups.
AI, humanoids and autonomous vehicles are likely to lead to wealth creation through productivity gains, higher company valuations and IPOs.
In autonomous vehicles, Singapore is one of the leaders in the region. It released a provisional national standard in 2019 and since then has authorized 13 AVs for public road trials.
Humanoids, one of the main bets to increase productivity in the future, are already seen in operation at Changi Airport in such tasks as cleaning, transport and security. The government has invested about $400 million into the National Robotics Programme (NRP).
“Humanoids will make it easier for mature Singaporean workers to fully embrace robots and reap the benefits of working alongside them,” Lord says.
