Like Hong Kong, Singapore is supported by all the infrastructure of a world city and with a digital economy which has been growing to become a significant part of the city’s economy. Perhaps Singapore’s most important feature is not its broadband speed (although, at over 100Mpbs, it does score highest see fig. 2) but its cosmopolitan character, and urban environment which sets it apart from its Asian rivals, Hong Kong and Seoul. Singapore comes fifth in our ‘Quality of life’ ranking which gives it an edge against its main rivals in the region.
Singapore is the premier Asian 'tech powerhouse'.
"The fine-grain walkable streets of Singapore are as much an asset for the new economy as its tech infrastructure"
The Savills Tech Cities programme was set up in response to an observation that, all over the globe, successful tech employees, and hence the tech economy, have been fleeing purpose-built out-of-town business parks in favour of city centres with a strong cultural life and creative sector. Downtown districts in big world cities like Brooklyn in New York, Shoreditch in London and Tiong Bahru in Singapore, have attracted creative and tech employees as well as entrepreneurs to both live and work in the city, in those particular neighbourhoods. Smaller cities like San Francisco, Austin, Dublin and Berlin have also shown phenomenal pulling power for this type of industry, threatening to empty the silicon suburbs of their human capital.
So, Singapore’s creative culture has become a magnet for tech talent. Its shop houses and art deco districts have become the location of choice for these migrating millennials making it a major contender for the place of premier Asian tech city. What are the features that make Singapore a successful tech city and what might threaten this position?
Singapore’s international business environment is very helpful to the tech industry. It scores second only to New York on our ‘Business environment’ ranking (see fig. 1) and scores top in terms of low costs and regulations for businesses. Despite being a world city, it has among the lowest staff costs in our mix of cities, which is attractive to business but could prove a deterrent to talent – particularly given Singapore’s high real estate costs. Singapore is particularly reliant on attracting tech talent to the city from the broader region because its ‘millennial to boomer ratio’ (number of young people compared to old) is on the low side for a tech city. The city state’s population is forecast to grow by 13.7% over the next ten years, according to Oxford Economics.
Real estate rents are weighted fairly low in the making of a tech city but Singapore has the dubious honour of the highest office costs per square foot for typical tech accommodation. A victim of its own success, Singapore’s digital economy is one of many different sectors competing for space in the city state. While the business, creative and living environment can outweigh cost considerations for workers in the digital industry, it is real estate costs that are perhaps the biggest potential drag on Singapore’s tech future.
Counterbalancing the cost of accommodation is the quality of life in Singapore. On a range of measures, including low crime, low commute times and low pollution, Singapore benefits while also having a fair degree of ‘city buzz’. On our all-important ‘Flat White index’ Singapore scores third overall and highest in Asia proving itself a worthy host to the tech industry’s favourite beverage.
"Singapore’s ‘millennial to boomer ratio’ is on the low side but the city state’s population is forecast to grow by 13.7% over the next ten years"
It is a feature of the Asian tech cities, including Singapore, that broadband speeds are very high and costs are low. Other tech infrastructure measures like internet usage, communications technology, levels of tech development and connectivity are average while levels of tech engagement (uploads, listings, postings etc.) are comparatively lower in the Singapore population as a whole – a reflection of its status as an older and multi faceted city. Singapore ranks third out of twelve on our ‘Tech environment’ ranking.
Singapore is a living example of how the quality of a city is a key factor in attracting tech industry and growing the cutting edge, creative digital economy. The fine-grain, walkable streets of Singapore are as much an asset for the new economy as its tech infrastructure. It is perhaps particularly unusual in Asia where cities can be large, new and difficult to live in and therefore less likely to attract the international human capital upon which the industry is reliant. If Singapore’s attractions are maintained and built on, it should remain a magnet, despite high real estate costs.
Tech Cities - Feb 2015