By Deodat Maharaj
News Americas, NEW YORK, NY, Fri. May 17, 2025: At the time of its independence in 1965, Singapore – a small state with no natural resources – had a nominal Gross Domestic Product, (GDP), of approximately USD 975 million, almost equal to that of Jamaica at that time.
Since then, this country has become a global economic powerhouse. While Singapore has prospered, developing countries, especially the Least Developed Countries, (LDCs), have struggled to reap the dividends of political independence. In 2023, the average GDP per capita for the 44 LDCs stood at USD 1,306. In Singapore, it was a stunning USD 84,734. Whilst Singapore embraced diversification and resilience, other developing countries, including LDCs and Small Island Developing States, (SIDS), remain reliant on primary production with high levels of debt and weak public sectors. They are also acutely vulnerable to external shocks.
Since its independence, Singapore has transitioned from a low-income to a high-income economy. The 1960s industrialization wave positioned manufacturing as a key economic driver. By the 1970s, full employment had been achieved. By the 1980s, Singapore joined others like Hong Kong and the Republic of Korea as one of Asia’s newly industrializing economies. Today, its economy thrives on high-value-added manufacturing and services.
Singapore’s transformation has been driven by a business-friendly regulatory environment and sustained investments in infrastructure, education, healthcare, and public services. Recognized as one of the world’s most competitive economies, the country topped the World Bank’s Human Capital Index in 2020.
Based on the above, one must ask, what was different about Singapore’s approach.
To start with, Singapore quickly recognized that its competitive edge would not come from natural resources, but from its people, policies, and technological advancements. Since the 1980s, the country has prioritized research and development (R&D) investment. It has consistently invested over 2% of its GDP in R&D, placing it among the world’s most research-intensive economies according to the World Bank. In comparison, not one LDC has reached 1% of GDP expenditure for R&D.
Singapore has also focused heavily on innovation. To strengthen its innovation ecosystem, it established key institutions such as the Agency for Science, Technology and Research (A*STAR). This institution fosters research collaboration between the government, academia, and industry. Its Intelligent Nation 2015 (iN2015) Plan positioned Singapore as a global leader in digital technology, with infrastructure development as a core priority. Singapore’s Next Generation National Broadband Network launched in 2010, provides high-speed internet access to businesses and residents. Fixed broadband costs in Singapore rank among the lowest globally, ensuring citizens benefit from affordable connectivity.
Singapore has also recognised the value of technology in boosting public sector efficiency. Launched in 2014, Singapore’s Smart Nation Initiative integrates big data and artificial intelligence to enhance public services. For example, artificial intelligence powered diagnostics have significantly reduced wait times and improved accuracy in medical imaging and disease detection.
Beyond its embrace of technology, Singapore has successfully diversified its economy into biomedical sciences, advanced manufacturing, and financial services. In terms of financial services, this tiny country is now the world’s fourth largest financial hub after New York, London, and Hong Kong.
Based on the Singapore experience, there are some key lessons.
Firstly, it is vital to invest in digital infrastructure. Broadband access is no longer a luxury – it is an economic necessity. Governments must prioritize investments in affordable, high-speed internet to foster business growth, e-government expansion, and education accessibility. It can help the transition to a digital economy delivering rich dividends. In the case of Singapore, its digital economy accounted for an estimated 17% of its GDP according to its Digital Economy Report 2024.
Secondly, it is vital to develop forward-looking and next generation technology and strategic innovation accompanied by investments in innovation hubs. For LDCs and SIDS, investing in R&D, building digital innovation hubs, and prioritizing technical skills training are essential to future-proofing their economies and enhance resilience in a digital world.
Thirdly, leverage public-private partnerships for technology adoption. Singapore’s progress is also driven by its collaborative approach to innovation, which brings together government agencies, the private sector, and academia. LDCs, SIDS and indeed most developing countries do not have the fiscal space for a public sector-driven approach. Business is an essential partner.
Finally, good governance is critical. In Singapore, public sector efficiency is high, and corruption ranks amongst the lowest in the world. In summary, it shows that having a vision is good, but not good enough. It must be backed by action, determination, and hard work.
EDITOR’S NOTE: Deodat Maharaj is the Managing Director of the United Nations Technology Bank for the Least Developed Countries and a national of Trinidad and Tobago. He can be reached at: [email protected].
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