Singapore’s ability to adapt to changing global economic and geopolitical conditions is a hallmark of its development. Renowned for its basic manufacturing in the 1970s and precision parts manufacturing in the 1980s, Singapore is now a regional services hub and a hub for international flows of trade, investment, finance and talent. Masu.
To continue that success into the future, Singapore needs to evolve again. This time, it’s to respond to the urgent and complex challenges posed by climate change.
While this may sound daunting, this is a country with two core strengths: the innovation to design clean technologies that will help decarbonize the world, and the funding to deliver that technology at scale. It is also an opportunity to demonstrate.
According to the World Intellectual Property Organization’s Global Innovation Index released in September 2023, Singapore is Asia’s most innovative economy. The country recently moved up the rankings by ranking among the top 10 startup ecosystems in the world by US research firm Startup Genome. Starting on the 18th, it ranked 8th, overtaking Seoul, Shanghai and Tokyo in the process.
Singapore’s status as a financial and capital hub has also increased in recent years. It currently manages about $5 trillion in assets, more than three-quarters of which come from overseas investors.
This combination of expertise and financial clout positions Singapore well to become a global center of excellence in clean technology. It will be an invaluable next step in the ongoing evolution of cities as the world searches for solutions to the climate crisis.
motivation to act
Accelerating investment in cleantech is important for Singapore’s future in many ways.
Singapore is one of the lowest countries in the world, with an average elevation of just 15 meters, making it particularly vulnerable to flooding from rising sea levels. They face constraints due to their small size and lack of natural resources. Access to clean energy is limited due to high labor costs and a lack of land available for solar and wind power generation.
On top of all this, Singapore needs to find new ways to create high-quality, promising jobs for its citizens at a time when living costs and property prices are rising.
Cleantech can help you solve this development challenge. It does not require vast amounts of natural resources or low-cost labor. However, leveraging its strengths as a hub for talent, academic research and investment could help position Singapore’s economy for long-term growth.
Developing and adopting new technologies for the energy transition, including those that can reduce the carbon footprint of construction, transport and aviation, creates opportunities for Singapore’s economy to evolve again. By supporting and commercializing innovation in these areas, we can maintain our leading position in the increasingly decarbonized global supply chain of high-value goods.
lead from above
The government recognizes the importance of a green economy and has made cleantech innovation a core element of its national green plan. It supports research into sustainable technologies through institutions such as the National Environment Agency and the Economic Development Board (EDB), and is enhancing its position as a regional hub for new business models using technology, such as carbon trading. EDB estimates that carbon trading services could add up to US$5.6 billion (S$7.5 billion) to the economy by 2050.
Additionally, initiatives like the Sustainable Development Open Innovation Challenge supported by the Singapore government provide valuable funding and guidance to startups. The city’s world-class research institutions, including the National University of Singapore and Nanyang Technological University, also have centers dedicated to sustainability and clean technology.
Governments also see technology as a tool to mobilize funds for green investments. The Monetary Authority of Singapore (MAS) is working to help companies and financial institutions build technology solutions that address their environmental, social and governance (ESG) needs, including measuring and reporting climate and sustainability data. Launched ESG Impact Hub in 2022. .
MAS also expands the scope of tax incentives for single-family offices in Singapore and encourages investment in local environmental and social causes. This includes extending tax incentives to mixed finance structures, a form of financing typically used to finance sustainable development, and approving foreign climate-related investments.