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Singapore’s digital financial system – from e-commerce to social media – practically doubled in 5 years


Vistors to Marina Bay stroll on a bridge with a view of the Central Enterprise District in Singapore on Sunday, 18 June 2023. (Picture by Joseph Nair/NurPhoto by way of Getty Photographs) (Picture by Joseph Nair/NurPhoto by way of Getty Photographs)

Joseph Nair | Nurphoto | Getty Photographs

SINGAPORE — Singapore’s digital financial system contributed to greater than 17% of its gross home product in 2022 — greater than the 13% logged in 2017, in line with a report by the nation’s Infocomm Media Growth Authority.

The examine, printed Friday, revealed that the financial contribution of the digital financial system to Singapore’s GDP practically doubled to 106 billion Singapore {dollars} ($77.5 billion) in 2022, up from SG$58 billion in 2017, in line with CNBC’s calculations.

The digital financial system is split into two components: the data and communications sector; and digitalization in the remainder of the financial system.

One-third of the digital financial system was pushed by the data and communications sector and two-thirds by digitalization in the remainder of the financial system.

The I&C sector drove digitalization offering providers equivalent to telecommunications, pc programming & IT consultancy, cloud computing and software program improvement.

Digitalization in the remainder of the financial system measures the worth generated from investments and spending in digital capital throughout all sectors excluding these from the I&C sector. They embody financial outcomes because of companies investing in digital applied sciences that construct worth equivalent to attain clients higher, optimize enterprise processes in addition to innovate services and products.

“The enlargement of the digital financial system has come on the again of accelerating adoption of digital applied sciences by enterprises, which in flip contributed to the sturdy development of tech manpower,” IMDA mentioned within the report.

Primarily based on the newest obtainable information, the digital economies of Estonia, Sweden and the UK accounted for 16.6%, 15% and 16.1% of their respective GDPs in 2020. Comparatively, Singapore’s digital financial system carried out higher, contributing to 16.7% of its GDP in 2020.

The important thing sub-sectors driving double-digit development within the info and communications sector — at a fee of as excessive as 70% — have been video games, on-line providers, and e-commerce, in line with IMDA. They have been pushed by elevated adoption throughout the Covid-19 pandemic.

The worth-add from digitalization in the remainder of the financial system elevated from SG$38.6 billion in 2017 to SG$72.8 billion in 2022, pushed primarily by sectors in finance and insurance coverage, wholesale commerce, and manufacturing.

Consequently, the value-add from digitalization as a share of the financial system rose steadily from 8.7% in 2017 to 11.9% in 2022, the report mentioned.

That is equal to an annual compound development fee of 13.5%, which is quicker than the three.8% development of Singapore’s GDP in 2022. CAGR is a measure of funding returns, which takes under consideration what an funding yields at an annual fee over a specified interval.

Extra companies utilizing digital applied sciences

The expansion of digitalization in the remainder of the financial system is pushed by extra companies stepping up on their use of digital applied sciences.

The know-how adoption fee of companies grew from 74% in 2018 to 94% in 2022, in line with IMDA’s annual survey.

Consequently, extra tech professionals have been deployed throughout all sectors, with the variety of tech jobs rising from about 155,500 in 2017 to 201,100 in 2022.

“Regardless of the current tech sector lay-offs, the demand for tech jobs is more likely to stay resilient, because the digitalization of the financial system deepens,” mentioned IMDA.

“Total, Singapore’s digital financial system has been rising strongly and its longer-term outlook stays constructive. The Singapore authorities continues to be dedicated to rising a aggressive digital financial system and fostering a technology-skilled workforce,” mentioned IMDA.

Deputy Prime Minister Lawrence Wong mentioned in his finances proposal for 2022 that the federal government will make investments SG$200 million over the following few years into tasks that construct digital capabilities in companies and staff.

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