In 2010, San Francisco-based investor Paul Bragiel called Singapore’s chances of becoming a leading Asia tech hub, “bleak.”
But there was promise, mainly in the generous terms given by government agencies. Recently, Singapore has been putting even more effort into luring tech firms and investors, including global players like Facebook, Google and Dyson. The focus now though is on shifting toward attracting talent - targeting the rising stars within tech, to come to Singapore to lead the way.
The secretive nature of the deals means it is unclear how much the country spends to attract such companies and whether it pays off. Manufacturing, finance and insurance made up more than a third of Singapore’s $356 billion economy in 2018. The information-communications sector, into which tech firms would largely fall, was about 4%. But now tech is expanding at an impressive rate. Info-comm expanded at an annualised 6.6% in the first quarter of this year, while the next fastest sectors tracked (finance and insurance) grew just 3.2%.
There are still blockers to the exponential growth though. Some tech companies have shown some worry about a recently granted fake news law in Singapore, which critics say could damage the right of free speech. Google said it was worried the law would stifle innovation and the growth of the digital information ecosystem. And, Singapore only has one real shining star start-up, the $1 billion ride-hailing firm Grab. Neighboring Indonesia has four: taxi app Go-Jek, travel site Traveloka, and market places Bukalapak and Tokopedia. Hong Kong has two, in online travel agency Klook and logistics firm Lalamove.
Lengthy tax holidays, big grants for development and experimentation, co-funding for and land and rents deals are among the incentives coming from different agencies. Such deals have attracted some of the world’s brightest tech companies. Google, for instance, now has more than 1,000 employees in Singapore. Starting in 2007 with 24 people. Facebook opened a new Singapore hub that can accommodate 3,000 people last year, up from 10 employees in 2010, and unveiled a $1 billion investment in its first Asian data centre. Dyson has moved its headquarters to Singapore in evasion of Brexit, and announced plans to build an electric car.
The EDB has six offices in the United States, six in Europe, and locations in China, India, Japan, South Korea and Indonesia. It says 80 of the world’s top 100 tech firms have operations in Singapore. So things are definitely moving in the right direction in the city-state and Paul Bragiel’s appraisal of its trajectory in tech is beginning to look a little pessimistic. Watch this space.