Singapore is poised to spearhead the next wave of economic growth in Asia, according to McKinsey’s global managing partner, Bob Sternfels, and senior partner Gautam Kumra. The city-state’s strategic position and forward-thinking policies have transformed it into a global powerhouse over the past 60 years, with a remarkable average GDP growth of 7% annually. Now, Singapore is set to capitalise on emerging “arenas of competition”—industries marked by significant growth and innovation potential.
These arenas, identified by the McKinsey Global Institute, include artificial intelligence (AI), advanced manufacturing, and the digital economy. AI, once confined to research labs, now drives market capitalisation and enterprise creation. Singapore is already showing promise in these areas, with companies like GlobalFoundries and Micron expanding semiconductor capabilities, and Grab piloting autonomous mobility solutions.
The Asia-Pacific region is expected to generate between $13t and $21t in annual revenue from these arenas by 2040, nearly double that of the US. Singapore’s opportunity lies in leveraging its open economy to bridge geopolitical divides, prioritising advanced manufacturing, and fostering continuous reskilling.
With a declining working-age population, automation and robotics present significant opportunities. Singapore aims to catch up with global leaders like Korea in robot-to-worker density. Reskilling is crucial, as the half-life of skills shortens, necessitating a shift to continuous learning frameworks.
Private capital will play a vital role in this transformation. In 2024, Singapore attracted $5 billion in venture capital, with potential for further growth. By embracing change and leveraging its strengths, Singapore is well-positioned to lead in the global arenas of the future.
