An overview of Singapore’s manufacturing landscape
Singapore’s manufacturing sector contributes more than 20 percent to its gross domestic product (GDP). However, just around a tenth of all employed residents in Singapore work in the manufacturing sector. Its manufacturing industry focuses on products higher in the value chain, with the key segments being electronics and precision engineering, chemicals, and biomedical manufacturing. Much of the manufacturing industries in Singapore rely on automation and technology-driven processes. The country ranked second worldwide for industry-related robot density in manufacturing.With its emphasis on automation, innovation, and research and development in manufacturing, along with the quality of its infrastructure, Singapore has attracted leading global manufacturers to establish a presence in the country. These include pure-play semiconductor foundries such GlobalFoundries and United Microelectronics Corp and global pharmaceutical giants GlaxoSmithKlein, Novartis, and Pfizer. However, Singapore still faces limitations in its capacity for larger manufacturing plants, with business park space being the lowest among all commercial and industrial real estate supply.
The focus on high-value electronics and biomedical products has worked to Singapore’s benefit. In 2021, Singapore’s manufacturing output was at a ten-year high, despite the ongoing COVID-19 pandemic. This was bolstered by the high demand for semiconductors due to the global chip shortage, as well as increased demand for biomedical and pharmaceutical products to meet pandemic demand.
Digital transformation and upskilling in the manufacturing sector
In early 2022, Singapore announced its ‘Manufacturing 2030‘ plan to grow the manufacturing sector by 50 percent by 2030. With its limited land, resources, and labor, Singapore’s manufacturing sector would not be able to compete in cost-based manufacturing. While the unit business cost index for manufacturing decreased during the COVID-19 pandemic, it is expected to rise again in 2022 on the back of sustained wage growth and higher rentals and utility costs. Therefore, to achieve the Manufacturing 2030 goal and for the industry to remain competitive, the sector has instead set its sights on Industry 4.0 adoption. This would include digital transformation in the manufacturing industries, the adoption of the latest technologies, and upskilling and training of the workforce.
