The Singapore Budget 2025, presented by Prime Minister and Finance Minister Lawrence Wong, has put a particular emphasis on certain economic areas as being the drivers of SG60 growth. One of them is research and development (R&D) to promote innovation in technology.
“To take our economy forward, this Budget will emphasise three key areas: technology and innovation; our enterprise ecosystem; as well as our infrastructure investments amidst resource constraints,” said PM Wong, in his Budget 2025 speech.
This year’s Singapore Budget, which tackles cost-of-living issues head on, also emphasises upon sustained economic growth, as a strong economy and a steady revenue stream are essential to enable the Singapore Government to keep supporting those in need.
Enhancing technology and innovation engines
Elaborating on what the Singapore Government would do to power up the economy, PM Wong said, “First, we will enhance our technology and innovation engines. This is crucial because new ideas, innovation and technological progress are the drivers of growth.”
He continued, “We see this in the [United States of America], where the technology sector, powered by Silicon Valley and companies like Apple, Amazon, Alphabet and Tesla, has helped to propel the country’s dynamism and innovation. We don’t operate at the same scale as the US. But we can still excel in specific areas of innovation and technology.”
Referring to local brands built on tech platforms, PM Wong said, “We have a new generation of local tech companies like Grab, Sea and Razer, which have established themselves as regional or industry leaders.”
He also spoke of the global brands that have a Singapore presence. “We are home to the world’s top tech companies. They already have substantial activities here, and are keen to do more out of Singapore, including in new frontier areas like Artificial Intelligence (or AI) and quantum computing.”
PM Wong went over the areas in which Singapore had “considerable strengths” in the technology sector, such as semiconductors, with Singapore “supplying more than 10 per cent of chips and producing one-fifth of semiconductor equipment worldwide”.
DNA chips, “used to diagnose diseases or identify patient risks” also come mainly from Singapore, which “produces more than 80 per cent of the world’s DNA chips”.
Pharmaceuticals and advanced medical devices are other fields where Singapore is a player at the global level.
R&D is the foundation of innovation
Not just technology, but also innovation in technology is necessary to keep Singapore ahead of the competition, believes the government. Research and development (R&D) is the foundation of innovation.
Our R&D efforts are critical in powering our innovation and technology engines. The [Singapore] Government has consistently invested about 1 per cent of GDP annually in R&D over the last 20 years. These investments have borne fruit.
Prime Minister and Finance Minister Lawrence Wong, in his Budget 2025 speech
“For example,” said PM Wong, “our biotech ecosystem would not be where it is today without Biopolis, which we built more than 20 years ago. It also served as a platform for biotech talent to gather and share knowledge — knowledge that then diffused into our education system, which uplifted a new generation of Singaporeans.”
He said that the country needed to continue investments “to keep our R&D infrastructure at the cutting edge”.
These investments include aiding enterprises in the innovation space. “We will also support companies that undertake R&D and innovation in partnership with other stakeholders,” said PM Wong. “We have a good suite of schemes today, which we will further enhance.”
Strengthening the enterprise ecosystem
Aligned with this focus on R&D is the strategy to strengthen the enterprise ecosystem itself in Singapore.
“Over the years, we have developed a stronger pool of globally competitive startups and enterprises. But there is still more to be done. We want Singapore to be a place where exciting ventures develop and grow into the leading enterprises of the future,” said the prime minister.
Explaining how the Singapore Government would strengthen enterprise, he said, “We will provide more support for enterprises to scale up, execute their growth plans, and compete on the global stage. In particular, I will extend our support schemes for internationalisation, and for mergers and acquisitions.
Once again, technology is a growth driver of enterprise. “To succeed, all enterprises must invest in technology to enhance their competitiveness and productivity,” said PM Wong.
“Enterprises can adopt off-the-shelf solutions like AI-powered analytics and digital marketing tools. We will continue to encourage the adoption of such solutions through initiatives like the Productivity Solutions Grant and SMEs Go Digital,” he said.
He also emphasised on Artificial Intelligence in Singapore’s enterprise ecosystem. “Beyond a certain stage, enterprises will need AI solutions, which are tailored to their needs and integrated into their business processes and systems. To support this, I will set aside up to SGD 150 million for a new Enterprise Compute Initiative. Under this initiative, eligible enterprises will be partnered with major cloud service providers to access AI tools and computing power, as well as expert consultancy services,” said the prime minister.
