Is the biotechnology industry successful in Singapore

Economic structure - Singapore

Economic key data Singapore *)

indicator 2017
GDP (nominal, billion US $) 324,6
.Gross added value 292,2
GDP per capita (nominal, US $) 57.861
Population (million) 5,61

*) Exchange rate: 1 US $ = 1.378 S $, annual average rate 2017

Source: Singapore Department of Statistics

You can find further key economic data at http://www.gtai.de/wirtschaftsdaten-singapur.

Sectors: To the top with modern services and high-tech

The island nation of Singapore has developed into a modern service location over the past 20 years. The manufacturing industry is also very important, but now only accounts for less than 20 percent of gross domestic product (GDP) - with a downward trend. And the structural change is not yet over.

Singapore's area roughly corresponds to that of Hamburg. Due to the geographical limitation, the state therefore has no raw materials. Around 40 percent of the water requirement is met from neighboring Malaysia. The sand for land reclamation projects also comes from neighbors Indonesia and Malaysia. Thus Singapore has neither a raw material extraction nor an appreciable agriculture. The processing of raw materials does not play a major role either.

In the relatively short time since independence from Malaysia in 1965, the island nation has transformed from a developing country with a very low per capita income to a highly developed country with a GDP per capita of almost US $ 58,000 (for comparison in According to the International Monetary Fund, GDP per capita in Germany was around US $ 45,000 in 2017).

After rapid industrialization in the 1960s, Singapore reached full employment in the early 1970s. However, production at that time was still dominated by the low-wage sector. International corporations were mainly producing textiles, clothing and simple electronic items.

Just ten years later, the country was already one of the so-called tiger states alongside South Korea, Hong Kong and Taiwan. The manufacturing industry had changed drastically as early as the 1990s: Instead of wage-intensive manufacturing, Singapore has since relied on highly specialized, highly automated production of, among other things, semiconductors, pharmaceuticals and aerospace technology.

Importance of the economic sectors in Singapore (2017; shares in%)

Sectors Share of GDP Share of employees in 2017
Agriculture, forestry, fishing 0,0 -
Mining (including oil and gas production) 0,0 -
Manufacturing 19,2 9,9
Energy supply (including water supply) 1,3 1,0
construction industry 4,3 4,4
Services 75,2 84,7

Source: Singapore Department of Statistics

Manufacturing: focus on high quality and knowledge-based manufacturing

The existing industry focuses on technologically advanced products such as electronic products, precision and medical technology as well as pharmaceuticals. However, oil platforms and shipbuilding products are also manufactured. Another important branch of industry is the chemical industry, with the trend towards higher-quality products and specialty chemicals. Basic and petrochemicals are also available. For example, there is a world-class chemical cluster on Jurong Island that is being expanded further. The biotechnology sector is also becoming increasingly important - not least thanks to strong government funding.

Despite limited space and expensive labor, the government wants to keep manufacturing as a relevant branch of the economy. The city-state should not become a pure service center.

Unlike in Hong Kong, the factories in Singapore cannot migrate to the surrounding area, but have to relocate to neighboring Malaysia or Indonesia. This happens especially in the case of labor-intensive and space-intensive production. The relocation process abroad will continue as it is also subsidized by the state for tax purposes. The only condition is that the companies keep their headquarters in Singapore.

The government is picky about its industrial policy: wage and land-intensive industries are supposed to migrate to more cost-effective countries. However, the manufacture of high-quality, knowledge-based products is welcome. Examples are precision and medical technology, pharmaceutical and biotechnology, aerospace technology as well as high-tech electronics and IT technology.

But the government not only wants to attract investment in manufacturing facilities, but also increasingly research and development projects. For this purpose, she waves with attractive incentives - and not without success. The Economic Development Board (EDB) reports that foreign investors are increasingly involved in applied research and development.

Services: the dominance of the sector continues to grow

Over 75 percent of Singapore's GDP is generated in the service sector. At the same time, the branch of industry employs almost 85 percent of the labor force. The trend is clear. Despite the very efficient industrial sector, the dominance of the service industry will continue to increase. It is only a matter of time before its share of GDP hits 80 percent.

The most important areas are financial services, transport and logistics, tourism, and wholesaling and retailing. The city-state with its nearly 6 million inhabitants is home to over 200 banks. In addition, a number of international financial service providers have established their regional headquarters there. It is not for nothing that Singapore is also called "the Switzerland of Asia".

Singapore's port is one of the most important hubs in the world, ahead of Hong Kong and Rotterdam. In terms of pure tonnage, according to the Lloyd's List One Hundred Ports 2017, it was in second place with 31 million twenty-foot equivalent units, behind Shanghai with 37 million twenty-foot equivalent units.

The island nation is visited by around 10 million tourists every year. The growing flow of tourists is having a positive impact on retail. In addition to pure vacationers, there is also a steadily growing number of medical tourists. They come because of the well-trained doctors and the very well-equipped medical sector.