S'pore must take bold, risky bets on new areas of growth to secure economic expansion, committee says

SINGAPORE - Singapore can secure future economic expansion by taking bold, forward-looking bets in new and emerging areas of growth, even if it entails risk of possible failure.

The final recommendations of the Economic Strategy Review (ESR), released on May 13, said Singapore must continue to take bold, forward-looking bets to ensure growth, good jobs, and remain competitive in a fast changing world.

While Singapore is already a trusted base for high-value manufacturing and modern services, it must further deepen capabilities, move up the value chain, and extend lead in areas of existing strengths.

“Not every investment will succeed, but we must persist - because the cost of inaction and missed opportunities will be far greater over time,” said the ESR in its final recommendations.

Hence, the first of the eight thrusts to achieve the goals set out in the ESR was on how to build global leadership in areas of strength, and take bold bets for future growth.

This would require Singapore to sharpen its ability to attract and anchor leading industries, and refresh its investment promotion approach to attract cutting-edge activities and capabilities.

Mr Jeffrey Siow, Acting Minister for Transport and Senior Minister of State for Finance, said: “The aim is simple. We don’t just want to be in the supply chain. We want to be the part of the supply chain nobody can afford to take out.”

He added: “An economy is healthy not because firms never fail, but because new ones keep rising. Our work here is to make sure capital, talent, and second chances all keep flowing.”

Beyond attracting new investments, the ESR believes Singapore must ensure that firms already based here continue to upgrade and transform.

“We should support companies to integrate digital, data and physical technologies, and to build best-in-class production systems that improve productivity, quality, operational resilience and sustainability. This will enable firms in Singapore to remain globally competitive even as cost pressures rise,” it said.

Singapore should also entrench new investments deep into the existing ecosystem by fostering partnerships with public research institutions, building dense local supplier ecosystems, and developing strong pipelines of skilled talent.

“Over time, these linkages will make Singapore a critical node in the companies’ global operations, increasing the stickiness of such investments.”

Invest in emerging technologies will create new growth engines.

Singapore should therefore invest early to develop capabilities in technologies with the potential to unlock breakthroughs across multiple sectors.

Promising areas include quantum technologies, which build on Singapore’s strengths in semiconductors and advanced manufacturing, as well as space technologies, which leverage capabilities in aerospace and satellite systems.

A new area of growth can be high-value trust-based services, such as cybersecurity, AI governance, audits and assurance, compliance and risk management.

That is because as global systems become more complex and sensitive to risk, demand for trusted, high-quality services, will increase.

These services complement Singapore’s industrial base and reinforce the Republic’s role as a reliable platform for global business.  

The ESR said that Singapore’s real competition is not within Singapore, but with other major hubs around the world.

Therefore, Singapore must remain open to professionals with deep expertise and experience.

“We must continue attracting and developing strong teams in Singapore to stay competitive. At the same time, we should continue refining our foreign workforce strategy to ensure it complements and strengthens opportunities for Singaporeans sustain our future competitiveness and expand our economic frontier.”

One of the companies that exemplify this mindset is Quantinuum - a leading quantum computing firm that announced in March 2026 a new research and development and operations centre in Singapore.

The centre will bring together Quantinuum staff with local researchers and industry partners to co-develop commercially relevant quantum computing applications that address real-world challenges in pharmaceuticals, materials science and finance.

Mr Brian Tan, Southeast Asia regional president of semiconductor equipment maker Applied Materials, who was also a member of the ESR committee on global competitiveness, said: “Our goal is not simply to ‘pick winners’, but to create the environment and the ecosystem that allow our firms to thrive both in Singapore and globally.”

Another member of the same committee, Ms Tan Su Shan, chief executive of DBS Bank, said: “Amid geopolitical uncertainties and market volatility, investors are increasingly seeking stable and trusted jurisdictions to diversify their asset allocations. Singapore is well-positioned to attract these capital inflows into Asia.”

To ensure Singapore remains attractive to investments, the ESR recommends that Singapore strengthens its role as a connected and trusted hub that has helped anchor a wide range of high-value activities and created well-paying jobs for Singaporeans in areas such as maritime, aviation and finance.

However, in a more fragmented world, connectivity alone is not enough.

The movement of goods, people, capital and data is increasingly shaped by security, resilience and trust considerations. Competition among hubs is also intensifying.

“To stay relevant, we must move beyond being a hub through which flows pass, to one where flows are orchestrated, financed, governed, and translated into economic value. We must also position ourselves to capture new and emerging flows so that we are not bypassed as the global economy evolves,” said the ESR.

To achieve that goal, the ESR recommends Singapore to build next-generation physical and digital connectivity in an integrated manner.

“We are making major investments to expand our port and airport capacity. But infrastructure alone will not be sufficient. We must also develop next-generation sea and air hubs that integrate physical infrastructure with digital and AI-enabled systems, invest in specialised handling and logistics capabilities, and deepen air-sea-land connectivity to enable seamless movement of goods.”

The goal is to offer the fastest, most reliable and best-coordinated end-to-end flow of goods in the region, making Singapore the preferred choice for shippers and manufacturers.

Also, as supply chains become more digital and distributed, more value will accrue to the orchestration and management of flows.

The ESR said Singapore should capture this value through activities like supply chain management, global procurement, demand planning and standard-setting to govern and facilitate trusted flows, even if the underlying trade does not pass through Singapore.

The Republic can also deepen its asset management ecosystem, strengthen its role as a centre for growth capital, and building next-generation financial infrastructure.

Cross-border data flows will also become a critical layer of economic infrastructure in a digital and AI-driven world.

Hence, Singapore should strengthen how it governs data and facilitate the sharing of data securely across borders, and more actively shape international standards for data and AI systems.

“This will position Singapore as a trusted hub for data-driven economic activity, and a rule-setter for secure and energy-efficient digital infrastructure,” it added.

Singapore should also reinforce and extend its role as an energy hub.

The ongoing Middle East crisis underscores the importance of Singapore as a reliable and well-connected energy hub, built on earlier investments such as Jurong Island.

Singapore should plan the next phase of energy infrastructure to sustain and strengthen this role, and build capabilities in liquefied natural gas (LNG) trading, hydrogen and ammonia, and sustainable aviation fuels. The Republic should also develop Jurong Island as a premier test bed for low-carbon technologies.

Another thrust in the final recommendations is to foster a more dynamic enterprise ecosystem so that more Singapore-based companies can start, scale and succeed globally.

“New ideas, firms, and business models must be able to emerge and grow quickly, while less competitive ones can restructure or exit. This allows capital, talent and resources to be recycled into higher-value ventures, strengthening overall economic vitality,” said the ESR.

While Singapore’s startup ecosystem has developed significantly over the past decade, companies still find it difficult to secure growth-stage capital.

To close this gap, Singapore should promote the development of different forms of private capital such as venture debt and private credit, alongside venture capital.

Singapore should also strengthen its public equities market, building on the momentum from the Monetary Authority of Singapore’s (MAS) Equities Market Review, to support promising companies that are ready to list and raise capital.

The Republic must also actively support the next generation of high-potential enterprises - both global and home-grown - that have the potential to become future industry leaders.

This will require new investment and partnership tools.

“Not all of these bets will succeed. But for those that do, we would have rooted them - and likely their founders - in Singapore,” said the ESR.

Software firm AvePoint is a good example of how global technology companies can anchor, grow and innovate from Singapore.

Founded in the US, AvePoint has grown into a global leader in data security, governance, and collaboration software.

Drawn by Singapore’s strong tech ecosystem, business‑friendly environment and deep talent pool, Singapore has become central to AvePoint’s journey, serving as its Asia headquarters, a major R&D base, and a launchpad for new ventures.

Looking ahead, AvePoint sees sustained growth opportunities in data governance and security, particularly as AI adoption increases.

Mr Tianyi Jiang, the company’s co-founder and chief executive, said: “Singapore’s stability, high trust, and tech-forward posture create the ideal environment for AI diffusion across its global industries. A steadfast commitment to lifelong learning ensures a highly adaptable domestic workforce, reinforcing an ecosystem that attracts the world’s best talent to innovate at scale.”  

At the same time, Singapore must continue to support Singapore-based firms to internationalise.

When Singapore-based firms expand abroad, they will establish and grow high-value functions - such as headquarters, strategy and decision-making - in Singapore, creating good jobs for locals.

However, internationalisation has become more complex and riskier in a more uncertain global environment.

Hence, stronger support should be provided for ambitious overseas ventures that involve larger capital outlays and higher risks, especially when they can generate positive spillovers to the broader economy.

To drive this endeavour, the ESR recommends setting up set an ambitious target to significantly increase the number of Singapore-headquartered companies with more than $1 billion in revenue.

The ESR believes that all Singapore firms should be able to restructure and transition more smoothly. Therefore, Government support should go beyond helping businesses grow.

It should also help firms assess their position early and pursue suitable transition pathways - including restructuring operations, offshoring parts of their business, or pursuing mergers and acquisitions.

At the same time, regulations should be reviewed to reduce friction in business transitions.

For example, land reinstatement costs have been cited as a barrier to timely exit and resource reallocation. By lowering such frictions, we can ensure that capital, talent and resources flow more quickly to more productive uses.

The last of the eight thrusts is to build economic resilience as a core capability.

Firms can no longer optimise for efficiency and cost alone - they must also build resilience, said the ESR. Many global firms have already adapted, redesigning supply chains and absorbing higher costs.

As a small and open economy, Singapore must do the same to boost economic resilience. Some ways to approach this include diversifying risks, building buffers, preparing for a low-carbon future, mitigate critical supply chain vulnerabilities and expand Singapore’s network of trusted partnerships.

“The ability to combine resilience with efficiency will be a key competitive advantage,” it added.