Singapore's 2022 GDP Bolstered by 17.3% Contribution from Digital Economy and Over 200,000 Tech Jobs

08 Oct, 2023

Singapore's 2022 GDP Bolstered by 17.3% Contribution from Digital Economy and Over 200,000 Tech Jobs

In 2022, Singapore's digital economy played a pivotal role in driving economic growth, contributing 17.3% to the GDP and creating over 200,000 technology-related jobs. This significant data, marking the first official measurement of Singapore's digital economy, was unveiled in a report jointly published by the Infocomm Media Development Authority (IMDA) and the Lee Kuan Yew School of Public Policy.

The report reveals substantial expansion in Singapore's digital economy from 2017 to 2022, with its contribution to GDP growth increasing from 13% to 17.3%, nearly doubling in nominal terms from S$58 billion to S$106 billion. This growth is deemed competitive when compared to similar open economies like Estonia, Sweden, and the United Kingdom, according to IMDA.

Over this five-year period, the digital economy exhibited a robust compound annual growth rate of 12.9%, surpassing overall economic growth. The number of technology-related jobs also surged from approximately 155,500 to 201,100, elevating the share of tech professionals in the total workforce from 4.2% to 5.2%.

IMDA highlights the benefit to local workers, with more than 70% of tech jobs held by Singaporeans and permanent residents, who receive competitive wages. Tech professionals now earn a resident median monthly wage of S$7,376, excluding employer Central Provident Fund (CPF) contributions and bonuses, up from S$5,512 in 2017. This figure significantly surpasses the overall resident median monthly wage, which rose from S$3,749 in 2017 to S$4,500, excluding employer CPF contributions.

The report indicates that roles in software and applications, such as software and developer engineers, accounted for most of the growth in tech jobs. Nevertheless, positions in cloud computing, network and infrastructure, management, and product development are also on the rise.

Despite tech industry layoffs in 2022/2023 affecting Singapore and other global tech hubs, the report anticipates continued demand for tech professionals as the economy continues to digitize.

Minister for Communications and Information Josephine Teo emphasizes the importance of understanding the digital economy's value to plan investments and policies. She underscores the potential for small countries like Singapore to compete effectively in the digital age.

The digital economy, as defined in the report, encompasses two components: value added from the information and communications sector and value-added from digitalization across other sectors. The information and communications sector, responsible for digital services such as telecommunications, computer programming & IT consultancy, cloud computing, software development, and content/media production and distribution, accounts for approximately one-third of the digital economy. It contributed S$33 billion or 5.4% of overall GDP, up from S$19 billion or 4.3% in 2017.

The growth in this sector was propelled by strong performance in games, online services, and e-commerce, driven by accelerated digitalization and trends such as the shift to cloud computing, especially during the COVID-19 pandemic.

Investments in digital capital in other sectors increased from S$39 billion in 2017 to S$73 billion in 2022, comprising 11.9% of Singapore's GDP. Major contributions came from the finance and insurance, wholesale trade, and manufacturing sectors. Notably, more than half of the tech jobs in 2022 were generated outside the information and communications sector.

Firms exhibited increased technology adoption rates, with 94% adopting at least one digital technology in 2022, compared to 74% in 2018. The average number of digital technologies adopted per firm, known as technological adoption intensity, rose from 1.7 to 2.1 over the same period. These technologies encompass cyber security, cloud computing, e-payment, e-commerce, data analytics, artificial intelligence, the Internet of Things, blockchain, and immersive media.

However, the report highlights differences in technological adoption between small and medium enterprises (SMEs) and larger enterprises. Larger enterprises demonstrate higher adoption rates across various technologies, including cloud computing, data analytics, and artificial intelligence. SMEs have made significant strides in adopting e-payment technology but lag behind in other areas.

Moreover, technological adoption varies significantly by sector, with finance and insurance as well as professional services leading in adoption intensity compared to sectors like construction, real estate, transportation, and storage.

IMDA's Chief Executive, Lew Chuen Hong, acknowledges the remarkable growth of the digital economy in Singapore. He underscores the potential for Singapore to excel in the digital realm, unencumbered by the traditional constraints of its size.