Inaugural report signals continued opportunities for enterprises and tech professionals
SINGAPORE – 06 OCT 2023
- Singapore’s digital economy is significant and has experienced strong growth in recent years. It contributed an estimated 17.3% of Singapore’s gross domestic product (GDP) in 2022, up from 13% in 2017. This represents an almost doubling of its value-added1 (VA), or economic contribution, from S$58 billion to S$106 billion over the five-year period.
- These are among several key findings published in the inaugural Singapore Digital Economy (SGDE) report, developed by the Infocomm Media Development Authority (IMDA) in partnership with the Lee Kuan Yew School of Public Policy. The report allows IMDA to assess the state of Singapore’s Digital Economy and better monitor its direction and pace of change over time.
- There is currently no internationally agreed standard on how to define and measure the digital economy. Some studies focus on digital industries as a representation of the overall digital economy, while few studies look at digitalisation across the entire economy. Based on our estimates using available data and using our definition and methodology in the report, Singapore’s digital economy has compared favourably with that of other similar open economies2.
- The inaugural SGDE report takes a holistic definition of Singapore’s digital economy that comprises two components.
- The first component captures the VA of the Information & Communications (I&C) sector3 as a producer of digital services. The I&C sector is one of the key drivers of Singapore’s economy, having accounted for S$33 billion and 5.4% of the overall GDP in 2022, up from S$19 billion and 4.3% of GDP in 2017. It was the fastest growing sector between 2017 and 2022.
- Beyond the I&C sector, the digital domain is also an enabler for the other sectors. The second component therefore considers the VA from digitalisation across the rest of the economy4, measured using an established economics technique known as the growth accounting method5. We found that digitalisation across the rest of the economy progressed at a robust rate, with this digitalisation contributing S$73 billion or 11.9% of Singapore’s GDP in 2022, up from S$39 billion or 8.7% of GDP in 2017, outpacing the growth of the overall economy.
- The rising VA from digitalisation across the rest of economy comes on the back of more firms embracing digital technologies and solutions. In particular, the technology adoption rate6 among Small and Medium Enterprises (SMEs) rose from 74% in 2018 to 94% in 2022. The average technology adoption intensity7 by SMEs has also increased from 1.7 to 2.1 over the same period.
- Furthermore, the demand for tech professionals in Singapore is healthy and has risen over the years. Between 2017 and 2022, the number of tech jobs grew from approximately 155,500 to around 201,100, accounting for an increased share of total employment from 4.2% to 5.2%. In addition, more than half of the tech jobs in 2022 – around 57% – came from the rest of the economy beyond the I&C sector. This strong demand for tech professionals continues to benefit the locals, with more than 70% of tech jobs held by Singaporeans and Permanent Residents. In general, tech professionals command a good and competitive wage, with a resident median monthly wage8 of S$7,376, compared to the overall residents' median wage9 of S$4,500.
- “Singapore’s digital economy is significant and has seen remarkable growth over the years, underscoring how IMDA’s efforts in driving Singapore’s digital transformation are bearing fruit,” said Mr Lew Chuen Hong, Chief Executive, IMDA. “We will continue to develop our I&C sector and drive digitalisation across the rest of the sectors to ensure our enterprises and workforce remain competitive amid an increasingly digital world. In the digital domain where many of the constraints that bind us as a small country do not exist, there is much scope for Singapore to punch above our weight and be a much bigger digital red dot.”