After a strong showing in investment commitments last year, Singapore expects more moderate numbers this year.

This means that while the Republic does not expect investors to commit anything like the $17.2 billion they did last year, it is confident of meeting its medium-term goal of $8 billion to $10 billion in fixed asset investment pledges.

Economic Development Board (EDB) chairman Beh Swan Gin told reporters yesterday that the numbers for last year could, in fact, have been even higher, if not for the Covid-19 impact on the energy and chemicals sector.

Some projects which were in the works have been delayed as a result, but the EDB remains confident that these projects will go ahead when the demand picture is more stable.

Speaking at the EDB's year-in-review briefing, Dr Beh noted that every eight to 10 years, there tends to be a surge in fixed asset investments in Singapore, as a result of a wave in investments from the semiconductor and energy and chemicals industries to increase their capacity to meet the growing demand. The current wave started in 2019 and carried on through last year, he added.

Singapore saw a surge in investment commitments from local companies, which accounted for 17.3 per cent of capital investments last year, higher than the 8.2 per cent in the previous year.

The US was the Republic's largest investor region, with 53.4 per cent of Singapore's fixed asset commitments last year.

Trade and Industry Minister Chan Chun Sing told the media that Singapore's portfolio of investments has become more diversified both in sectors and the region over the past few years, which adds to the resilience of its economy.

Furthermore, the Covid-19 pandemic has also given rise to a greater appreciation of supply chain resilience in making investment decisions. Singapore's robust supply chain system has made it more competitive over the past year.

Many logistics companies have strengthened their investments here for this reason and more high-value products and time-sensitive products are coming through Singapore, said Mr Chan.

He also spelt out several challenges which lie ahead, including persistent geopolitical tensions between the United States and China, as well as the competition for jobs.

Mr Chan cited research from McKinsey which found that the average lifespan of a major company has gone from 61 years in the past to less than 18 years today, and also pointed out how the consultancy predicts that 75 per cent of the world's top 500 companies will cease to exist in 2027.

This means that jobs will change significantly and workers' skills will need to be constantly upgraded and re-learnt, he said.

As a small and open economy, Singapore will feel these pressures earlier than its global peers, and more so than any other country, he added.

In its report, the EDB highlighted that digital capabilities were built across sectors to facilitate the development of new technologies and the adoption of advanced manufacturing last year.

It also made progress in promoting innovation and the creation of new businesses and products and in the development of growth sectors such as agri-food and mobility.

EDB managing director Chng Kai Fong said that Singapore always has to keep up with the latest trends to retain investor interest, given its trade exposure and investment-driven nature.

One new area that it has pivoted towards recently is innovation, to create products and services out of Singapore, he said, and the EDB is doing so in ways such as nurturing a large local enterprise ecosystem.

"We think that when you start new ventures out of Singapore, that's when the IP is created here, that's where jobs are created around product lines, and we're very happy that today... we have many product lines and services that are headquartered out of Singapore," Mr Chng said.

EDB executive vice-president Tan Kong Hwee, speaking to The Straits Times on talk show The Big Story, said that Singapore has to be aware of companies' difficulties, needs and future plans to ensure it continues to draw these investments, especially as companies make adjustments to their businesses amid the pandemic.

"It's not a given that companies will always choose Singapore. So you know, we have to remain open and welcoming."