Tech spending in Singapore to jump 4.6% in 2023 to $22.17b

Software will be the highest growth area in terms of spend.

Singaporean government and business spending on tech goods and services will likely increase by 4.6% in 2023 to $22.17b, data from Forrester showed.

In a report, Forrester said software will be the highest growth area in 2023, with an expected spend of $7.0b.

Communications equipment ($5.1b vs $5.0b) ), tech outsourcing and hardware maintenance ($3.6b vs $3.3b), and tech consulting and systems integration services ($3.3b vs $3.1b) will also see a spending increase in 2023.

Forrester said it expects tech spending growth in Singapore on the back of its 2022 measures such as the Productivity Solutions Grant, the Enterprise Development Grant, and the SkillsFuture Enterprise Credit.

In 2023, Singapore also implemented a $4b top-up to the National Productivity Fund and tax deductions for businesses that conduct R&D through the new Enterprise Innovation Scheme.

Whilst the “Silicon Valley of Asia” remains as a global leader in digital and AI readiness, Forrester said Singapore must invest in developing local digital skills and improve the cost base for companies and tech talent.

“Singapore has faced an almost unprecedented rise in living costs, driven by a surging rental market. It’s already the most expensive city in the world; seven in 10 businesses say they are ready to relocate personnel elsewhere if costs do not stabilize,” the report stated.

“Rising costs have also affected the return of talent; the expatriate workforce only came close to regaining pre-pandemic numbers in December 2022. This is significant because up to two-thirds of tech sector professionals are from abroad,” it added.

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