With digital transformation at its core, Singapore’s digital economy now rivals its manufacturing industry, bolstering GDP growth and enhancing job prospects despite global tech challenges.

Key Highlights:  

– Digital Economy Growth: Contributed 17.7% to Singapore’s GDP in 2023, surpassing finance and insurance.

– Significant Sector Contributions: Digitalisation across various industries drives nearly two-thirds of the digital economy’s growth.

– Job Creation Amidst Challenges: Steady demand for tech talent with locals holding over 70% of tech jobs, despite a dip in salaries.

– SME Digital Adoption: 95% of SMEs digitalized in areas like cybersecurity, e-commerce, and data analytics.

Singapore’s digital economy has rapidly expanded, contributing an impressive 17.7% to the nation’s GDP in 2023 and overtaking the finance and insurance sectors, per recent data from the Infocomm Media Development Authority (IMDA). Valued at S$113 billion (US$85.3 billion), the digital economy is now comparable to the country’s manufacturing sector, Singapore’s largest industry. IMDA notes that about S$1 (US$0.76) out of every S$6 in Singapore’s economy is now generated through digital activities.

The growth rate of Singapore’s digital economy has far outpaced its overall GDP, with an annual compound growth of 11.2% from 2018 to 2023, highlighting the sustained drive toward digitalisation across sectors. According to IMDA’s data, the information and communications sector alone accounts for about one-third of the digital economy, with the remaining growth fueled by digitalisation in non-tech sectors like finance, professional services, and wholesale trade.

As a result of this digital push, tech jobs have flourished, with over 208,000 positions recorded in 2023—a 3.4% year-on-year increase. More than 70% of these roles are occupied by Singaporeans and permanent residents, reflecting the strong local foothold in the sector. However, despite rising employment opportunities, median monthly salaries for tech roles dropped from S$7,376 in 2022 to S$7,000, likely due to a softer global tech market outlook.

The IMDA remains optimistic, expecting the digital economy to be a long-term structural driver for growth, even amid recent layoffs from global tech giants such as Dyson, Samsung, and Lazada. Lew Chuen Hong, IMDA’s chief executive, commented that while macroeconomic challenges will continue to create global uncertainties, technology’s role as an economic catalyst remains firm.

Digital adoption among small and medium-sized enterprises (SMEs) has also surged. Nearly 95% of SMEs now utilize digital tools in areas like cybersecurity, e-commerce, and data analytics, with over 85% implementing sector-specific digital solutions. This adoption reflects a significant increase from 2021 and demonstrates how Singapore’s SME landscape is becoming more tech-savvy.

IMDA is committed to enhancing Singapore’s digital skills pipeline, ensuring that citizens acquire the expertise needed to thrive in a tech-centric future. The authority aims to continue supporting Singapore’s “cautiously optimistic” tech sector by equipping locals with in-demand skills, positioning Singapore as a leader in digital transformation and innovation.