SINGAPORE, Oct 30 — Singapore’s digital economy has achieved significant growth, now contributing 17.7 per cent to the nation’s gross domestic product (GDP) in 2023, surpassing the finance and insurance sectors, according to recent data from the Infocomm Media Development Authority (IMDA).

This development positions the digital economy on par with Singapore’s largest industry, manufacturing.

Singapore media site CNA reported that in monetary terms, the digital economy generated S$113 billion (RM274.7 billion) in GDP, marking an increase from S$106 billion in 2022.

This translates to roughly S$1 (US$0.76) for every S$6 in the overall economy, reflecting a robust and expanding sector.

The digital economy has exhibited impressive growth, with a compound annual growth rate (CAGR) of 11.2 per cent from 2018 to 2023, significantly outpacing the nominal GDP growth rate of 5.8 per cent.

CNA also reported that information and communications account for approximately one-third of the digital economy, while the remainder stems from the digitalisation efforts across other industries.

This includes a broad array of digital services such as telecommunications, IT consultancy, cloud computing, and content production.

IMDA also said the demand for tech talent has remained robust, with the number of tech jobs reaching 208,300 in 2023 — a year-on-year growth of 3.4 per cent.

Notably, over half (57.5 per cent) of tech employees originated from non-tech sectors, including finance, professional services, wholesale trade, and manufacturing.

These roles offer competitive salaries, with the median monthly salary for resident tech professionals standing at 1.5 times the overall median for residents.

However, despite the overall demand for tech professionals, the median monthly salary for resident tech employees saw a decline, dropping to S$7,000 in 2023 from S$7,376 in 2022.

While the reasons for this decrease are not fully understood, a softer market outlook in the tech sector could be a contributing factor.

Recent layoffs by major firms, including Dyson and Samsung Electronics, have further underscored the challenges facing the tech industry.

E-commerce companies have also faced retrenchments, as illustrated by Lazada’s workforce reductions.

IMDA noted, however, that many individuals affected by layoffs in the tech sector have reportedly found new employment within two months.

CNA also reported IMDA as saying that small and medium-sized enterprises (SMEs) in Singapore are embracing digital transformation.

Nearly 95 per cent of SMEs have adopted digital solutions in key areas, including cybersecurity, cloud computing, e-commerce, and data analytics.

There is also a notable increase in the use of digital tools for enhancing business operations; over 80 per cent of SMEs report leveraging at least one digital solution for functions like accounting and digital marketing.

Furthermore, 85 per cent of SMEs adopted sector-specific digital solutions in 2023, up from 61 per cent in 2021, showcasing a growing commitment to leveraging technology for competitive advantage.