Five reasons why the world’s technology giants have moved to Singapore
Singapore has become a world-class technology center in Asia, and has become the best springboard for world companies to enter Asia, a growing market.
According to data from the Singapore Economic Development Board (EDB), 80 of the top 100 technology companies in the world have operations in Singapore and are increasing investment.
In 2017, the Bloomberg Innovation Index ranked Singapore 6th in the world, second only to Japan and the United States, while China ranked 21st.
A study conducted by the real estate consulting firm Jones Lang LaSalle Group listed Singapore as the preferred overseas headquarters destination for Chinese technology giants Alibaba, Baidu and Tencent.
Similarly, Google, Amazon and Facebook have established solid regional operations in Singapore.
The trade war is playing an increasing role in Singapore.
Just this week, the Trump administration announced an additional US$200 billion in tariffs on Chinese products. Companies that have a lot of trade between the two countries are looking for ways to avoid these tariffs. The most reasonable way is to move the fragile assembly and production operations from China (and the United States) to safer business clusters and ecosystems.
The forward-looking policies here are waiting for the giants with open arms.
There are five key factors in Singapore’s attractiveness as an innovation center and regional operations hub.
Open and connected
Singapore is located in the center of Asia, and its infrastructure connects every corner of the world, including East and West.
For example, Jones Lang LaSalle’s research shows that Chinese cities are the closest to Singapore, followed by New York and Sydney.
This city-state is able to integrate into the global complex value chain because Singapore’s institutions promote a transparent and consistent rule of law, and Singapore’s policymakers have successfully won the trust of multinational corporations, NGOs and governments.
This has become a virtuous circle, especially as Singapore government agencies continue to participate in open-source, mutually beneficial public-private partnerships. Singapore’s policymakers often invite foreign companies to participate in problem solving and government building activities.
Free trade agreement
Although Singapore’s market is small and has a population of just over 5 million, it has implemented 22 bilateral and regional free trade agreements, and recently signed two large free trade agreements, including the EU-Singapore Free Trade Agreement (EUSFTA) and Comprehensive Progressive Trans-Pacific Strategic Economic Partnership Agreement (CPTPP).
Both the EU Free Trade Agreement and the CPTPP multilateral agreement have high standards for promoting digital trade and platform economy.
This has actually opened up all major markets in the world for Singaporean companies, which is even more noticeable because the US-China trade war shows no signs of abating.
In order to qualify for these free trade agreements, the regional value chain can be transferred to Singapore, where there is a strong supplier network and a large number of strategic partners and service providers.
The friendliness of digital trade and data security
Some regions require foreign companies to store data on local servers, thereby giving full data access to government officials, while Singapore does not have such restrictions.
Within ASEAN, when other countries set up more barriers to cross-border data flows, Singapore has become a driving force for the ASEAN-Australia Digital Trade Framework Initiative, which aims to establish a framework for e-commerce, digital currency, intellectual property protection, and data management. Formal legal framework and standards.
Singapore’s current National Trade Platform has provided a world-class platform for related companies by connecting importers, exporters, banks, logistics companies, customs, shipping agents, and other stakeholders. Innovative economic model prototype.
Human capital and talent
Singapore’s cash-rich policymakers are turning the city’s workers into the world’s most tech-savvy workforce.
The government has allocated $19 billion under the 2020 annual plan for research, innovation, and enterprise, which aims to promote advanced manufacturing engineering, digital economy and services, health, life sciences, and sustainable urban solutions.
These well-funded policies involve a strong collaborative network, including Singapore’s world-class higher education, leading multinational corporations, and fast-growing startups, business incubators, and venture capitalist ecosystems. The world’s top consulting, legal, accounting and information technology companies are also rooted in these networks. They constitute Singapore’s thriving international business community and are indispensable for capacity building.
Geopolitical Safe Harbor
In addition to the risks of tariff wars, there is a bigger overarching reality: increasing international geopolitical competition.
For example, cooperating with a U.S. blacklisted entity company may expose a company to major risks such as rejection of commercial transactions, enhanced export controls, technology licenses and sanctions-all of which will cause serious damage to daily supply chain activities .
Therefore, multinational companies must increasingly protect the strategic technology ecosystem to comply with sanctions and national security regulations.
Singapore has established its own export control framework and license agreement based on the Western regulatory framework, providing a good opportunity for foreign companies wishing to manage export controls.