Impact of Economic Changes on Singapore's Enterprises and Government

This report provides an in-depth analysis of the Singaporean economy, focusing on its status as a financial hub and its dependence on trade, electronics, finance, and business services. It examines the impact of changing economic conditions, including the U.S.-China trade war, falling international demand, and a strong fiscal policy. The report explores how enterprises and the government should respond to these challenges, highlighting strategies such as increasing productivity, exploring new markets, joint ventures, maintaining economic openness, supporting internationalization, tax reforms, and promoting innovation and technology. It also discusses the role of innovation and productivity in promoting international trading, emphasizing the importance of transforming into a global e-commerce hub, setting up user-friendly websites, and utilizing cloud services. The report concludes by emphasizing the need for adaptability and strategic planning to navigate the evolving economic landscape and foster sustainable growth.

2019

Economy of Singapore 2
Executive Summary
Singapore is a big financial hub of Asia, which has a good reputation as highly developed free
market economy. GDP of Singapore grew 2.9% in 2018 and predictable to grow 2.5% in 2019
and 2.7% in 2020. As per expectation, Singaporean economy falls to 1.6% in 2019 which will
affect the Singaporean business development in many ways. The economy of Singapore is
dependent on trade, electronics, finance, petrochemicals, and business services. Singaporean
economy is extremely industrialized.
This report describes about the how Singaporean enterprises and government respond to the
changing economic conditions should. Economic challenges involve fewer exports due to the
U.S.-China trade war, falling international demand for electronics (13.5% of exports), a covering
building sector, and a strong fiscal policy. Annual average unemployment rate of Singapore
reached 2.0% in 2018 and is predictable to slightly reduce at 1.9% in 2019 and 2020.
This report also highlights that how innovation, technology and productivity promote
international business and trading. In the changing Singaporean economy, government and
enterprises should try different ways, plans and strategies to develop the business and trading
which is helpful for growth of economy.

Economy of Singapore 3
Contents
Introduction.................................................................................................................................................4
How should enterprises respond to the coming Singapore’s changing economic condition........................4
Increasing productivity overall................................................................................................................5
Explore new markets...............................................................................................................................5
Joint Ventures with multinational companies..........................................................................................5
How should Government respond to the coming Singapore’s changing economic condition......................6
No change to economic openness............................................................................................................6
Support Internationalizing.......................................................................................................................6
Tax reforms and make changes in policies..............................................................................................7
How do productivity and innovation promote international trading?...........................................................7
Transform itself into a global e-commerce hub.......................................................................................8
Setup a website for clients easily to use online transactions....................................................................8
Use cloud service.....................................................................................................................................8
Conclusion...................................................................................................................................................9
References.................................................................................................................................................10

Economy of Singapore 4
Introduction
Singapore’s economy has a good status. The economy of Singapore has second-ranked in 2019
regional ranking index. Singapore’s economy is a free- market highly established economy. The
economy of Singapore is a standout amongst the most stable countries. It has high government
revenue and a reliably positive overflow. In 2019 index, the overall score of Singapore’s
economy is hiked by 0.6 points, with increment in scores for trade independence and government
respectability outpacing unassuming decreases in labor opportunity and property rights.
Singapore is positioned second among 43 nations in the Asia–Pacific area, and its general score
is well over the regional and world centers. (Anon., 2019)
The economy of Singapore has experienced very fast development and growth. A recent survey
of MAS (Monetary Authority of Singapore) shows that when trading problems between China
and the United States will be resolved, then it will be clear more about 2019 economic growth of
Singapore. In 2019, the growth of Singapore’s economy has dropped from 3.1 percent in 2018 to
between 1.5 and 2.5 percent in 2019. Singapore's GDP Growth Rate averaged 6.73 percent from
1975 until 2019, reaching an all-time high of 36.10 percent in the first quarter of 2010 and a
record low of -13.40 percent in the fourth quarter of 2008. The economy of Singapore is
depending on the main manufacturing sector because it contributes to 20%-25% of the country’s
annual GDP. (BURINSKIENE, 2013)
How should enterprises respond to the coming Singapore’s changing economic condition
As of 2017, the Singaporean economy is a high-income economy with US$54,530 gross national
income per capita. More than 2, 00,000 enterprises are working in Singapore and every
enterprise standing at different condition. Every enterprise has its own challenges and
opportunities. The economy of Singapore is dependent on 160, 000 micro enterprises, 30,000
small enterprises, 8,000 medium enterprises, and 2,000 large enterprises. The overall growth of
the Singapore economy was 3.2% in 2018. GDP rose by 2.9% in 2018 and is estimated to rise by
2.5% in 2019 and 2.7% in 2020. In the changing economy, every enterprise’s response will be
different.

Economy of Singapore 5
The changing economy condition gives challenges as well as opportunities for enterprises.
According to the analysis of the Singaporean economy, it is overall showing the growth, which is
good for enterprises. But as a comparison to 2018, the growth of Singapore’s economy has
dropped from 3.1 percent to between 1.5 and 2.5 percent in 2019. (Anon., 2019)
Increasing productivity overall
Amid a difficult and challenging economic condition, Singapore’s enterprises have many options
and opportunities to develop their skills, use innovation ideas and capabilities with an outline for
economic growth. Productivity and economics are connected to each other. Increased
productivity helps in the growth of the economy. Higher economy enables customers to buy
more goods and enjoy a better living standard which helps to increase productivity. If country’s
economic conditions fall down, then consumers will not be able to purchase goods and services
which leads to loss in the business and affect the productivity and lower rate of economy leads to
decreased production and these facts also affect the skills future. Strong and positive economic
growth lead to high profits and higher stock rates. But vice versa negative and lower economic
lead to losses. (Anon., 2019)
Explore new markets
The economy of Singapore is mainly depending on exports business in electronics and
machinery manufacturing, tourism and financial services. In the changing economy of
Singapore, enterprises try to expand their business through explore new markets internally and
externally. Enterprises should strategize and implement a growth plan to explore and expand the
business. In the changing economic condition, if any enterprise bears loss then it also affects the
suppliers. Because of this, enterprises always try to explore new markets and establish good
relationship with new suppliers. (Ng, 2013)
Joint Ventures with multinational companies
If any business face troubles due to lower rate of economy then joint ventures with multinational
companies is a great option to recover the losses of enterprise. Growth in economic conditions
leads to attract investors but worse conditions lead the opposite. In the falling Singaporean

Economy of Singapore 6
economic condition, enterprises should be make strategies and plans to attract the investors to
invest in their business. (Anon., 2019)
How should Government respond to the coming Singapore’s changing economic condition
From last five decades, the Singaporean economy has been notable, creating rapid and delivering
impressive improvements in social well-being. But in today’s time, economy of Singapore faces
some challenges involving interruptions affected by new technologies, changing structures of
international competitiveness, and rising economic patriotism. Internally, Singapore requires
responding to an aged population and slowing population growth, weak innovation capacity,
rising expenses, and growth in desultory productivity. (Anon., 2019)
Because of China and US trade war, Singapore suffering from low economy. Singapore
government is prepared for the bad effect of US-China trade war, but the nation must advance up
its change of the economy on the off chance that it is to manage the effect. (Lau, 2018)
No change to economic openness
The government should list out the ways to create strength and policies. Economic openness is
the strength of Singaporean economy and government should not change this. Economic
openness inculcated a worldwide approach and deepened the knowledge of Asia. Technology
spreads more economic activities widely made urban areas increasingly significant as key hubs
of innovation and enterprises. (Anon., 2019)
The government of Singapore should build a responsible society where everyone should take
care of each other. Government should keep safe and secure Singapore. With all these things,
government should maintain the transformation of economy for innovative economy which can
provide some opportunities to understand the potentials of people and enterprises. (Lee, 2017)
Support Internationalizing
Due to change in mode of governance, the Singaporean economy going through many changes.
Singaporean Ministry of Foreign Affairs should continuously try to build good relationships with
the neighbor countries because Singaporean economy is depending on exports. The government

Economy of Singapore 7
should encourage a standards based worldwide order with global laws and standards. (Anon.,
2019)
Singapore government should re-evaluate the long term economic strategies and plan to accept
the changing environment and must be try to develop and create new rules and policies which
will give new boost up to economy. Singaporean government should be continuing to make the
commitments to retaining a large manufacturing base or other sectors which are electronics,
chemicals and many more. (Y C, 2015)
Tax reforms and make changes in policies
The government should continue to encourage growth over an active industrial policy which
marks fiscal incentives, enhance in public investment, encourages skill development to attract
foreign investors, and pay attentions to economic diversification. (Tan & Peng, 2013)
Governments may create changes in policy as the economic conditions. Government makes
plans and strategies to make positive growth in economic or avert from negative consequences of
economic. (Tremewan, 2016)
A global or international strategy refers to plans that act freely and work as if they were local
companies, with minimum management from the main company. International strategy leads to
an extensive variety of business policies, and a high level of adaptation to the internal business
environment. Develop one single plan or policy that can be useful throughout the world is the
challenge while at the same period keeping the elasticity to adapt that plan to the internal
business environment when it is essential.
How do productivity and innovation promote international trading?
Innovation and productivity are two main drivers which lead to economic progress. Innovation
and trade are connected with each other to growing the attention on private sectors. There is a
comprehensible connection among innovation and trade—with innovation comprehensively saw
as the change of an innovation into marketable goods and services, the growth of new business
procedures and techniques for association, and the absorption, adjustment and dispersal of novel
advances and ability. The relationship is one of common reinforcement: trade can serve to shape
innovation and innovation can shape trade. (Hofmann, 2013)

Economy of Singapore 8
International trade helps in the concern of the enormous variety of resources and their worldwide
accessibility. It also facilitates the division of the extensive range of products produced in
different areas of the world. Innovation provides new way of production which can help in
increasing the productivity and growth of economy. (Tatjé, et al., 2018)
Transform itself into a global e-commerce hub
Technology helps in sell products worldwide which is good for development of business. With
this method or innovation, products and services can go every place and it helps in increase the
productivity. Consequently enterprises must transform their business into online trading which
also helps in growth of economy. Normally, transformation compares or associates with
modification, left the old technology and goes with new technology. New methods give the
speed to business or trade; numerous new models offer items or administrations that are
preferred custom-made over the overwhelming models to clients' individual and quick needs.
Organizations frequently influence innovation to accomplish this at aggressive costs. (Ramos,
2010)
Setup a website for clients easily to use online transactions
In today’s time, website creates a good impact on client and it is a good idea for international
trading. Innovation helps in create a website which helps to increase the productivity. These
types of website also helpful for easy transactions which speedup the business of an enterprise.
Economic activities are progressively services arranged and planned into worldwide or regional
worth chains, which are becoming more well-known characteristics of the global economy.
Innovation has turned into a vital part of the development procedure, as policy-creators in both
high and low-salary nations increasingly observe the development and implementation of higher
technologies. (Butterm, et al., 2008)
Use cloud service
New technology provides cloud services that is helpful for save the data and all the information
related to products and clients. With the cloud services, international trading will be easy. The
utilization of cloud services is the best in an improvement and test condition. This includes
verifying a budgetary arrangement by means of physical resources for setting up labor,

Economy of Singapore 9
significant time and your condition. Distributed computing innovation has opened up openness
to situations for explicit needs at the fingertips of clients. This normally consolidates motorized
provisioning of physical and virtualized assets. (OECD, 2015)
Innovation as a strategy target has along become a main concern for many governments in
higher, rising and increasing economies, gradually more pursued through events that bear private
and public R&D just as incentives for the exchange of knowledge and technology through a
merger of manufacturing, trade policies and investment. (Weil, 2016)
Conclusion
Second smallest nation of Asia is Singapore. However, this small nation has second rank in 2019
regional ranking index. The biggest reason, which contributes in success of Singapore, is free-
market highly established economy. Singapore has successful tax policies which allow
enterprises to increase the profit. But cause of the China- US trade war, Singapore facing some
issues in growth of economy.
This report analyses that the economy growth of Singapore was 3.2% in 2018 but this is
estimated to rise by 2.5% in 2019 and 2.7% in 2020. In this changing economic condition of
Singapore, enterprises should continue to develop the business in different ways. As well as
Singaporean government should support high growth local enterprises and make changes in tax
reforms. Innovation and productivity are essential factors of international trading which is
helpful for growth of economy. The effective coordination of enterprises and Singaporean
government will develop the growth of economy.

Economy of Singapore 10
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[Accessed 28 June 2019].
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[Accessed 28 June 2019].
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[Accessed 28 June 2019].
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Economy of Singapore 11
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