Executive Summary

I have analyzed the political, economic, social, technological, legal, and environmental factors
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i of Singapore and have come up with a comprehensive research report, “PESTLE Analysis of
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i Singapore.” This report provides an analysis of Singapore’s economy from historical, current,
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i and future perspectives. The report also includes the suitable business industry to be
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i launched/invested in Singapore. i i

This unique report will provide reader with valuable information, insights, and tools needed to
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i identify new growth opportunities and operate their business successfully in this market. This
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i report will save hundreds of hours of reader own personal research time and will significantly
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i benefit reader in expanding their business in this market. In today’s complex economy, you
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i need every advantage that you can find.

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To make business, investment, and strategic decisions, you need timely, useful information.
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i This report fulfills this core need and is an indispensable reference guide for investors,
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i entrepreneur, and many more that operate in this market. i i i i i i i i

Introduction

In a global economy dominated by huge industrial powers, the city-state of Singapore has
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i carved out its competitive niche as a destination for regional headquarters, branch offices and
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i holding i companies i for doing

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Singapore offers foreign investors a highly skilled workforce, English-speaking business

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i environment, business-friendly legal and tax systems, immense logistics and transportation
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i capacities, and over sixty double taxation avoidance agreements, among other advantages.
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i Furthermore, the city-state consistently takes measures to align its policies with the
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i international standards emanating from the World Trade Organization, the Organization for
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i Economic Co-operation and Development, and even issue-centric organizations like the
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i International i Accounting i Standards Board.

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Singapore has consistently been ranked first on the World Bank’s Ease of Doing Business Index,
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i with particular strengths in “protecting investors” and “trading across borders.” In fact, the
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i city-state runs in such an efficient, business-friendly manner that it has been said to run like a
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i corporation itself; “Singapore Inc.” i i i

Singapore’s excellent strategic location and highly open economy make it attractive for
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i companies looking to conduct business here. Furthermore, Singapore has a stable political
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i environment, low taxes and a highly skilled workforce making it one of the most favorable
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i business locations in the world.

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Singapore’s economy is heavily dependent on exports, with a particular focus on electronics,

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i technology and pharmaceuticals. Although these sectors remain a cornerstone of the

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i economy, the recent growth of the financial services sector has been more notable. Singapore
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i has been a part of the World Trade Organisation (WTO) since its inception in 1995, and has
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i maintained low barriers to trade as part of an outward looking open economy.

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Body

This detailed PESTEL analysis of Singapore aims to explore some of the political, economic,
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i social, technological, environmental, and legal factors that affect Singapore today.
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Political factors affecting Singapore i i i

Singapore is a parliamentary democracy whereby the President is the head of state and the
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i Prime Minister is the head of government. It is one of the most stable countries in south-east
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i Asia. It is a member of the IMF, the World Bank, ASEAN, APEC, the UN, the Commonwealth, and
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i some other prestigious institutions. The focus of the government of Singapore on attracting
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i foreign direct investment (FDI) has been an important key to the economic success of the
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i country.

Singapore maintains very good relations with China, the USA, and some other highly developed
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i and powerful countries in the world. Interestingly, it also maintains good relations with North
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i Korea. However, its relations with neighboring countries such as Malaysia and Indonesia have
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i been cumbersome at times particularly due to disputes over border issues.

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Singapore has done well in its fight against corruption. It was ranked the third least corrupt
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i country in the world in the Transparency International Corruption Perceptions Index 2018.
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i However, the Singaporeans face severe restrictions on their basic rights to freedom of
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i expression, association, and peaceful assembly (Human Rights Watch, 2019). In this i i i i i i i i i i

i connection, it is worth noting that the government of Singapore has rejected the criticisms of
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i Human Rights Watch. i i

Economic factors affecting Singapore i i i

The next element to address in the PESTEL analysis of Singapore is the economy of Singapore
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i and the factors affecting it. Singapore is the 38th largest economy in the world. It is also one of
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i the four Asian Tigers or Asian Dragons that are so named as they are highly developed
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i economies with highly educated and productive work forces. The four Asian Tigers are Hong
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i Kong, Singapore, South Korea and Taiwan.

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Singapore has seen remarkable growth in recent years. Its GDP in 2018 was $323.9 billion with
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i $94,105 GDP Per Capita, while GDP for 2019 is expected to be around $359.6 billion (US News,
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i 2018). The unemployment rate in 2017 was 3.91%, while 3.77% in 2018 (Plecher, 2019).
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i However, this unemployment rate may be regarded as overemployment in some countries

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i meaning that employers may have been forced to recruit anyone as there were not enough
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i workers in the market. Corporate tax is charged at a flat rate of 17%. Many analysts see
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i Singapore as a tax heaven as it offers low taxes and other incentives to foreign investors. No
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i wonder why it is one of the largest recipients of foreign direct investment (FDI) in the world.
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Singapore is the 14th largest export economy in the world. Its top exports are integrated circuits,
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i computers, semiconductor devices, gas turbines, refined petroleum, gold, diamonds, refinedi i i i i i i i i

i copper, broadcasting equipment, and raw tin which mostly go to countries such as China, Hong
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i Kong, Malaysia, Indonesia, and the USA. Its top imports are integrated circuits, refined
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i petroleum, crude petroleum, gold, and computers (Pines, 2019). i i i i i i i

Social factors affecting Singapore

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Singapore is one of the wealthiest nations in the world. It is a multi-ethnic country with a total
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i population of 5.64 million as of 2018. The life expectancy for men is 79 years, while 84 years for
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i women (BBC, 2018). While the Singaporeans are somewhat conservative due to the influences
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i of dominant faiths such as Taoism, Buddhism, Islam, Christianity, and Hinduism, they are well
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i aware of the world around them.

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Though Singapore has made remarkable progress over the years, it faces some social
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i challenges. For instance, it is a densely populated country and has severe space constraints.
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i The ageing population, rising costs of living, high divorce rates, occasional tensions between
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i ethnic groups, and income inequality are some other social challenges to pay special attention
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i to.

Technological factors affecting Singapore i i i

Singapore is one of the world’s most technologically advanced countries. It is also considered
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i the most innovative country in Asia. Its IT infrastructure is one of the best and it has the fastest
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i internet in the world. It is also often regarded as the Asian technology capital. No wonder why
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i global tech giants such as Amazon, IBM, and many others use Singapore to pilot ground-
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breaking new projects before their commercialisation around the world. Likewise, 80 of the top
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i 100 tech firms in the world have a presence in Singapore (EDB Singapore, 2018).
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Hiring in IT sector has recently outpaced many other dominant sectors in the economy of
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i Singapore. However, there is a severe lack of STEM (science, technology, engineering and
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i mathematics) talents in the country. According to Manpower Group’s 2018 talent shortage i i i i i i i i i i i

i survey as cited in Quek (2019), approximately 56% of employers find difficulties in recruiting IT
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i and engineering staff.

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Legal factors affecting Singapore

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The legal environment is the last element to discuss in this PESTEL analysis of Singapore.
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i However, it is worth noting that due to the limited scope of the article, the discussion here is
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i somewhat limited. Singapore has some strict laws in areas such as leaving a ‘unflushed’ toilet,
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i connecting to someone else’s Wi-Fi network, urinating in elevators, littering, and vandalising.
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i As long as employment rights are concerned, employees have the right to a minimum of 7 to 14
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i days paid annual leave, sick leave, timely salary, and paid public holidays. They are also
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i protected by law against wrongful dismissal. i i i i i

Environmental factors affecting Singapore i i i

Singapore is one of the most beautiful places in the world. According to Canada-based online
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i travel agency Flight Network as cited in Bock (2019), it is the most beautiful city in Asia, and the
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i 11th most beautiful in the world. It is renowned for its world’s cleanest streets, year-round
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i summer, Changi Airport (awesome!), street food, sandy beaches, resort hotels, adventure
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i parks, and many other great visitor attractions.

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However, it is worth mentioning that as Singapore is a low-lying island state, it is very vulnerable
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i to sea level rise and coastal erosion. Likewise, industrial pollution, and limited resources for
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i freshwater are two big environmental challenges facing the country. i i i i i i i i

In Singapore, just as is the case anywhere else in the world, certain industries are more suitable
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i to be invested than others. Those who invest in such business industries will be sure to see
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i many financial benefits coming their way. The following are some of the most suitable
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i industries to be invested in Singapore today: i i i i i i

Financial Technology (Fintech) i i

Singapore has the status of being one of the world’s financial hubs. This fact holds true with
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i regard to financial technology (fintech). In recent years, the size of the fintech industry in
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i Singapore has grown tremendously. Due to the implementation of many incentives from the
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i government as well as individual financial institutions, cashless payments have become i i i i i i i i i i

i extremely common today. The many e-wallets available in Singapore facilitate such payments.
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i Therefore, the fintech industry of Singapore has immense potential for profitability.
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Freelance Economy i

Many people in Singapore have chosen to join the rapidly expanding freelance economy. The
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i increase in the influence of social media has done much to facilitate interaction between
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i freelance workers and their clients. This fact applies regardless of the line of work in which the
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i freelancer inhabits. Freelancers who have a significant network of clients can also leverage this
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i large client base to their advantage, resulting in even more profits and revenue.
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According to the latest set of statistics, there are approximately 200,000 freelancers who work
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i in Singapore today. Freelancers comprise approximately 9% of all residents who are employed
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i in Singapore. As Singapore’s freelance economy continues to strengthen, this figure is only

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i expected to increase significantly. i i i

It should be noted, however, that on occasion freelancers are sometimes not paid on time. For
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i this reason, all who intend to become freelancers in Singapore must have high levels of self-
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discipline and be able to manage time and money well in order to ensure that they make
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i significant profits. i
Health and Fitness i i

The fitness industry in Singapore is among the most rapidly-evolving in the country. Today,
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i large, well-known gym chains are no longer the primary options of regular gym-goers. This is
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i because Singaporean gym-goers of today have become more interested in different and
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i somewhat unusual fitness options. Boutique fitness businesses in particular have begun to
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i thrive in the current Singaporean fitness scene.

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Tech start-ups have also been working with the Singaporean health and fitness industry, and
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i such collaborations have boosted the reputation and profitability of both Singapore’s tech and
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i fitness industries. Such start-ups have understood the change in tastes of the modern
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i Singaporean gym-goer. They have created programs which enable their users to sample a
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i variety of fitness activities which span many different disciplines.

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Medical Industry i

Singapore’s medical industry is held in high regard all over the world. According to the official
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i Health Care Rankings, the country’s medical system is ranked sixth in the world and first in Asia.
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i The Singaporean government has been attempting to bolster this reputation by increasing its
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i expenditure on healthcare. The increased level of expenditure will be channeled towards

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i general and community hospitals, polyclinics, eldercare centers, and nursing homes. For this
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i reason, the demand for people who work in the healthcare and medical industry is expected to
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i increase.

The manufacturing of medical products is expected to grow exponentially in order to support

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i the country’s healthcare industry. For this reason, the industry requires the input of
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i researchers and engineers who will be able to design equipment which will be used by the
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i healthcare professionals of Singapore. i i i

Recommendation

Although Singapore is a secure investment haven with stable economics and low risk, it comes
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i with it the higher cost of investment. The combination of limited land, funneled labour and
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i imported resources brings up the cost of business in Singapore by a significant margin, and has
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i to be contemplated by any business owner before vesting any capital. Opportunity for a
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i supernormal return in Singapore is mitigated by the high start-up costs incurred. Low risk, low
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i return.

As a retail market by itself, the population numbers in Singapore are definitely insufficient to
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i sustain a fast-growing corporation. But to use Singapore as a nexus to reach out to the South-
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East Asian
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Conclusion

After analyzing all these factors, It is clear that Singapore is a remarkable country. It houses
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i talented and motivated people. It also provides great business opportunities. I can conclude
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i that its business success in both domestic and international platforms is highly benefited by
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i government policies. Its enterprise friendly approach boosts business as well. Singapore’s
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i continuing development has made it a major competitor in the international market. The
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i compulsory primary education and hardworking citizen are contributing factors.

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References

BBC (2018) Singapore country profile, available at: https://www.bbc.co.uk/news/world-asia-

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15961759 

Bock, H. (2019) Singapore is most beautiful city in Asia, 11th most beautiful in the world,
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i available at: i https://www.straitstimes.com/lifestyle/singapore-is-most-beautiful-city-in-

asia-11th-most-beautiful-in-the-world

EDB Singapore (2018) Singapore flexes its standing as Asia’s technology capital, available at:
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i https://www.edb.gov.sg/en/news-and-events/insights/innovation/singapore-flexes-its-
standing-as-asias-technology-capital.html

Human Rights Watch (2019) Singapore, available at: https://www.hrw.org/asia/singapore 

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Pines, L. (2019) Singapore’s Top 5 Exports & Imports: Why It’s The World’s 14th Largest Export
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i Economy, available at: https://commodity.com/singapore/

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Plecher, H. (2019) Singapore: Unemployment rate from 1998 to 2018, available at:
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i https://www.statista.com/statistics/378643/unemployment-rate-in-singapore/

Quek, C. (2019) Commentary: The future is tech but where is Singapore’s engineering and IT
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i talent? Available at: https://www.channelnewsasia.com/news/commentary/singapore-

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deep-technology-talent-scheme-foreign-it-enginneering-11870930

US News (2018) Overview of Singapore, available at: https://www.usnews.com/news/best-

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countries/singapore