Written reply to PQ on MNC investments in Singapore

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Mr Gan Thiam Poh: To ask the Minister for Trade and Industry (a) how many MNCs have withdrawn their investment from Singapore in the past eight years; (b) what are the reasons for their withdrawal and the industries they come from; and (c) how many MNCs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:

1. 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.

2. 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.

3. 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.

4. 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. 

5. 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.  

6. 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