Business Sentiments of ICT Companies on the Singapore Economy in FY21 Q1

Information & Communications Technology and Media  |  04 Jun 2021

Business Sentiments of ICT Companies on the Singapore Economy and ICT Industry 

(FY21 Q1: April 2021)



The Business Sentiments Survey ascertains how Singapore Information Communications and Technology (ICT) companies are adjusting to the current global and domestic economic environment. This survey in April 2021, with over 400 ICT business leaders.

(You can also read the full survey report with more than 1,500 business leaders from the Wholesale Trade, Retail, Food Services, ICT, Environmental Services, Logistics, Real Estate, and Security industries.)

Microsoft estimates that the global workforce can absorb around 149 million new technology-oriented jobs by 2025. This is despite the impact of the COVID-19 pandemic on economies worldwide. The technology trends in Singapore are similarly optimistic, according to a technology market outlook 2021 report by Randstad. For example, one of the positive trends is a heightened job demand for tech talent. This is also reflected in our own survey, where we saw an increase in the creation of IT jobs.

Having said that, the global demand for tech talent still outstrips the supply, and the small talent pool poses a challenge, especially to small and medium enterprises. The survey in April also took the pulse on how building the Singapore Core may help to alleviate this challenge.


Economic outlook

The January-March expansion was even higher than the 0.9 percent growth projected by economists in a Reuters poll, according to a Straits Times report. The surprisingly strong performance in the first quarter may explain the positive sentiments from the ICT companies we surveyed.

In FY2021 Q1, more companies were positive about Singapore’s economic situation where the ‘Good’ ratings were 31 percent, up from 18 percent in the previous quarter. In addition, the ‘Poor’ ratings were at an all-time low. Similarly, ICT companies were more optimistic about their industry’s business situation, with one in two companies perceiving their current business situation as ‘Good’.

However, the Ministry of Trade and Industry (MTI) maintained its forecast of Singapore’s economic growth at 4 percent to 6 percent . This is because the recent tightening measures of domestic restrictions and border controls is expected to balance the strong performance in the first quarter.  It remains to be seen if the economic and industry sentiment will also change following the heightened alert measures from 15 May to 13 June 2021.


Year on year revenue changes

More ICT companies reported an increase in actual and expected YoY revenues, with SMEs feeling the most positive. 51 percent of ICT companies reported that they were profitable in FY2020. For the period of January to March 2021, 39 percent of the ICT companies reported an increase in revenue.

Furthermore, 44 percent of companies polled expected revenue in April to June 2021 to increase from January to March 2021.

It is worth noting that this survey concluded before Singapore saw an increase of COVID-19 community cases in May 2021, and it was announced that Singapore will enter the Heightened Alert phase. Following the experience of the first circuit breaker in 2020, we think the tightened measures may not impact the ICT industry as much as many of the other industries but some of the ICT companies will still feel limited impacts.


Building a Singaporean core

COVID-19 has accelerated the need for technological adoption across industries, resulting in a surge in demand for tech professionals in Singapore. The shortage of tech talent in Singapore has been further exacerbated by tight border restrictions and stricter foreign manpower hiring policies.

The period of January to March saw an increase in the number of jobs created by ICT companies. The focus of new jobs created in the first quarter of 2021 and planned for in April to June continued to be on Tech-Heavy positions.

Through IndSights Research’s industry conversations with ICT business leaders, many cited the shortage of local talent with the necessary skills and manpower costs as some of the key challenges during this time. Some companies also shared that the tightened foreign manpower policies have made it challenging for their operations. With travel restrictions limiting the supply of talents the Singapore Government has assured businesses that it will develop the ICT sector’s Singaporean core.

In line with the government’s move to build the Singapore Core, seven in 10 companies reported being affected by the Government’s direction to build a Singaporean core.


Jobs Growth Incentive (JGI)

The JGI was launched to support and encourage companies to hire more Singaporeans to create good and long-term jobs for locals and 57 percent of ICT companies were aware of JGI.

We also saw that three in five companies that were aware were more encouraged by JGI to grow their local workforce, were also more likely to have increased/planned to increase manpower.

Eligibility Criteria

Find out more about JGI here.

Other hiring and training initiatives

Company-Led Training Programme (CLT)

Equip fresh and mid professionals with relevant on-demand tech skills through subsidised of salaries, training courses and overseas attachment fees in the digital sector.

Critical Infocomm Technology Resource Programme PLUS (CITREP+)

Funding support of up to 90 percent to build ICT technical skills for locals in areas such as cyber security, data analytics, network and infrastructure and software development.


About the study

This quarter’s survey collected views from 423 ICT business leaders in April 2021.

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