Questions:
Mr Gan Thiam Poh: To ask the Minister for Trade and Industry
(a) how many MNCs have withdrawn their investment from Singapore in the past
eight years; (b) what are the reasons for their withdrawal and the industries
they come from; and (c) how many MNCs have increased their investment in
Singapore during the same period and what are the industries they are mainly
in.
Written reply:
- Multinational Corporations (MNCs) have been an
important driver of Singapore’s economic growth. They have brought technology,
technical know-how and well-paying jobs to Singapore, complementing investments
made by Singapore companies. Singapore’s
pro-business environment, strong connectivity, and well-educated workforce have
allowed us to continue positioning ourselves as a strategic base for MNCs
looking to serve Asian markets.
- Even in a healthy economy, we expect to see a
continuous churn of firms, with some bringing in investments while others moving
out of Singapore due to a combination of internal and external factors. Firm-specific reasons for locating or relocating
business functions and operations range from changes in management and strategy,
as well as organisational restructuring in response to competition and the
state of their respective industries.
- It is thus more indicative to look at overall trends
instead of tracking decisions of individual firms. The total number of firms in Singapore has
been increasing steadily, from about 163,600 in 2010 to 216,900 in 2016. Foreign-owned firms[1]
have been growing in tandem with local firms, making up around 16% of the total
number of firms, 30% of employment and 56% to value-added (VA) throughout the
period.
- Overall trends show that investments have continued to
flow into Singapore in the past eight years.
The stock of foreign direct investments (FDI) have grown at a compounded
annual growth rate (CAGR) of about 13%[2], reaching S$1.36
trillion in 2016.
- These investments are also made in key areas identified
by the Committee on Future Economy, such as advanced manufacturing, digital and
hub services, as well as research and development activities across various
industries including biomedical manufacturing, electronics, infocomms and
media, and logistics.
- In particular, there have been an increase in
investments in digitalisation and robotics across various industries. For example, in 2017, Procter & Gamble announced
plans to invest S$140 million to set up its first digital innovation centre
outside of the US in Singapore; and Yusen Logistics broke ground for its first
future-ready warehouse as a part of a S$50 million investment to boost
operations in Singapore. These new,
large investments reflect the continued confidence and commitment of MNCs in
Singapore.
[1] Defined as firms with more than 50%
foreign equity.
[2] 2008-2016, 8 year CAGR