Singapore’s Digital Economy Contributes Over 17% to GDP in 2022
Singapore’s digital economy made up more than 17% of its gross domestic product (GDP) in 2022, surpassing the 13% recorded in 2017, according to a report by the country’s Infocomm Media Development Authority.
The report, published on Friday, revealed that the digital economy contributed around 106 billion Singapore dollars ($77.5 billion) to Singapore’s GDP in 2022, almost double the 58 billion Singapore dollars recorded in 2017.
The digital economy can be divided into two parts: the information and communications sector, and digitalization in other sectors of the economy.
About one-third of the digital economy was driven by the information and communications sector, while the remaining two-thirds stemmed from digitalization in other sectors.
The information and communications sector played a significant role in driving digitalization by offering services such as telecommunications, computer programming, IT consultancy, cloud computing, and software development.
Digitalization in other sectors measured the value generated through investments and spending on digital technologies, leading to better customer reach, optimized business processes, and product and service innovation.
“The expansion of the digital economy has been fueled by the increasing adoption of digital technologies by businesses, which has also contributed to the growth of the tech workforce,” stated the report from the Infocomm Media Development Authority.
In comparison to other countries, Estonia, Sweden, and the United Kingdom had digital economies accounting for 16.6%, 15%, and 16.1% of their respective GDPs in 2020. Singapore’s digital economy performed better, contributing to 16.7% of its GDP in 2020.
Key Sub-Sectors Driving Double-Digit Growth
The information and communications sector experienced double-digit growth rates, reaching as high as 70%, in sub-sectors such as games, online services, and e-commerce. These sectors saw increased adoption during the Covid-19 pandemic.
The value-add from digitalization in other sectors of the economy increased from 38.6 billion Singapore dollars in 2017 to 72.8 billion Singapore dollars in 2022, primarily driven by the finance and insurance, wholesale trade, and manufacturing sectors.
Consequently, the value-add from digitalization as a share of the economy steadily rose from 8.7% in 2017 to 11.9% in 2022, surpassing Singapore’s GDP growth rate of 3.8% in 2022. This indicates a compound annual growth rate (CAGR) of 13.5%, which measures investment returns over a specified period.
Increasing Adoption of Digital Technologies
The growth of digitalization in sectors outside of information and communications is driven by more businesses embracing digital technologies.
According to a survey conducted by the Infocomm Media Development Authority, the technology adoption rate among businesses increased from 74% in 2018 to 94% in 2022.
This increased adoption has led to a higher demand for tech professionals across all sectors, with the number of tech jobs growing from approximately 155,500 in 2017 to 201,100 in 2022.
“Despite recent layoffs in the tech sector, the demand for tech jobs is expected to remain resilient as the economy continues to digitalize,” stated the Infocomm Media Development Authority.
The overall outlook for Singapore’s digital economy remains positive, with the government committed to fostering a competitive digital economy and developing a technology-skilled workforce,” said the Infocomm Media Development Authority.
In his 2022 budget proposal, Deputy Prime Minister Lawrence Wong announced that the government will invest 200 million Singapore dollars over the next few years into projects that enhance digital capabilities in businesses and workers.
