SINGAPORE: The republic attracted S$12.7bil (US$9.48bil) in fixed assets investments in 2023 amid a challenging global environment that impacted business and investor sentiment, the Economic Development Board (EDB) says.
This marked a decrease from S$22.5bil in 2022, which can be attributed to the slowdown in demand for semiconductors.
In 2023, the chemicals sector took the lead in fixed asset investment commitments at about 35%, followed by electronics at 24.2%, and research and development at 16.6%.
In all, the projects secured in 2023 are expected to create 20,045 new jobs when they are fully implemented in the next few years.
Of the jobs created, 58% are in services, 26% in research and development (R&D) and innovation, and the remaining 16% in manufacturing.
EDB managing director Jacqueline Poh said the return of industrial policy in other countries led to increased competition for investment, while elevated interest rates also raised the barriers for investment and affected the fundraising environment for startups.
“These factors weigh on our investments commitments, but Singapore’s position as a trusted hub for business, innovation, and talent remains a key factor of our attractiveness,” she said at a briefing held at EDB’s office in Raffles City Tower yesterday.
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Total business expenditure came to S$8.9bil in 2023, in line with EDB’s medium to long-term goals, with the headquarters and professional services sector accounting for nearly 70% of such commitments as more global businesses used Singapore as a hub for their operations and to access other markets.
Total business expenditure refers to a company’s incremental annual operating expenditure in Singapore, excluding depreciation. Major components include wages and rental.
Singapore captured quality investments from various regions, including the United States, Europe and Asia, said EDB.
While investments from China and India declined compared with 2022, the republic saw increased interest from Japanese businesses.
EDB noted that investment commitments related to R&D and innovation activities in 2023 also increased over the previous year, as multinational companies continue to deepen their presence in Singapore and more foreign startups base themselves here.
It added that multinational companies have been expanding their partnerships with the local research, innovation and enterprise ecosystem to develop products from Singapore.
EDB has been promoting innovation through corporate venture-building, with a S$10mil Corporate Venture Launchpad programme rolled out in 2021.
It enables companies to create new, globally competitive products, services and business ventures.
Since its introduction, the programme has helped 25 large companies nurture new venture concepts in Singapore. Out of these companies, 15 have plans to launch or have launched new ventures in areas such as artificial intelligence, data services, climate technology and agricultural technology.
EDB said that the business and investment outlook for 2024 remains challenging, due to ongoing geopolitical tensions, policy uncertainty created by electoral contests in many jurisdictions, increased competition for investments, and macroeconomic uncertainty.
EDB chairman Png Cheong Boon noted the heightened competition for investments, as an increasing number of countries intensify their efforts to attract foreign direct investments.
These countries include those with abundant resources and significantly larger domestic markets as compared to Singapore.
“Rising business costs and resource constraints in Singapore have impacted our competitiveness for investments,” he said.
“While we have built a good pipeline of projects for the future, we are cognisant of needing to stay ahead of the competition so that Singapore remains attractive to both global and Asian corporates and startups.” — The Straits Times/ANN