Singapore’s digital economy contributed $106 billion or 17.3% of the country’s gross domestic product (GDP) in 2022. This was nearly two times higher than $58 billion in 2017, which came up to 13% of the country’s GDP then.
The figure was part of several key findings that were published in the inaugural Singapore Digital Economy (SGDE) report. The report, which looks at the digital economy in Singapore from 2017 to 2022, was developed by the Infocomm Media Development Authority (IMDA) in partnership with the Lee Kuan Yew School of Public Policy. According to IMDA, the report allows it to monitor the state of Singapore’s digital economy and look at its direction and pace of change over time.
That said, the agency noted that there is currently no internationally agreed standard on how to define and measure a country’s 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 economies,” says IMDA in its Oct 6 statement.
The report takes a look at two components within Singapore’s digital economy. The first captures the value-added (VA) – or economic contribution – of the information and communications sector as a producer of digital services.
The sector is one of the key drivers of Singapore’s economy, accounting for $33 billion or 5.4% of the country’s 2022 GDP. This is the fastest growing sector, having risen from $19 billion or 4.3% of the country’s GDP in 2017. Within the sector, the key sub-sectors that were driving growth were games, online services and e-commerce, which saw a compound annual growth rate (CAGR) of up to 70% per annum (p.a.). This was due to the boost in digitalisation and the emergence of new technology trends such as the shift to clouds, especially during the Covid-19 pandemic.
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The second component looks at the VA from digitalisation and compares it to the rest of the country’s economy. This is measured using the growth accounting technique, which is used to estimate the portion of the value-added in other non-information and communications sectors such as finance and insurance and manufacturing that is contributed by digital capital.
The report also found that the demand for tech professionals remains healthy with the number of tech jobs growing to 201,100 in 2022 from 155,500 in 2017. In 2022, tech jobs accounted for 5.2% of total employment in Singapore, up from 4.2% in 2017. In addition, more than half of the tech jobs in 2022 – around 57% – came from the rest of the economy beyond the information and communications sector.
According to the report, over 70% of overall tech jobs in Singapore are held by Singaporeans and permanent residents with tech professionals commanding a resident median monthly wage of $7,376, compared to the overall residents’ median wage of $4,500. The report added that tech professionals will likely remain in demand as the economy digitalises despite the recent spate of tech layoffs in 2022 and 2023.
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“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,” says Lew Chuen Hong, Chief Executive, IMDA.
“We will continue to develop our information and communications 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,” he adds.
