In his 2025 Budget speech, Prime Minister Lawrence Wong emphasized the essential role of technology, innovation, and investment in driving Singapore’s economy. With a consistent investment of around 1% of GDP in R&D over the past 20 years, Singapore continues to position itself at the forefront of technological advancements and industrial transformation.

Industries to watch

PM Wong highlighted several key industries that are anticipated to be the focus of future investments and innovations:

Artificial Intelligence (AI)

Quantum Computing

Semiconductors

Life Sciences

Precision Engineering

Pharmaceuticals and Medical Devices

These sectors represent the backbone of Singapore’s strategy to remain competitive in a rapidly evolving global economy.

Key R&D and innovation-related action items in Budget 2025

1. 3$ Billion Top-Up for the National Productivity Fund (NPF)

The National Productivity Fund (NPF) receives a significant boost of $3 billion, reinforcing its role as a cornerstone of Singapore’s productivity and innovation efforts. Initially focused on productivity enhancement, the NPF’s scope has expanded to include investment promotion and industrial transformation. According to a 2023 parliament speech, the NPF supports the Construction Productivity and Capability Fund (CPCF), which incentivases firms to adopt productive technologies and develop their workforce. The NPF also backs the SkillsFuture Work-Study Programme for similar purposes.

Now, with the age of BEPS2.0 posing new challenges to the attractiveness of Singapore as a destination for investment from MNCs, the NPF will also support the newly launched Refundable Investment Credits (RIC). The top-up for NPF at this point of time further demonstrates the government’s commitment to attracting more quality investments.

2. $1 Billion Investment in new R&D facilities for Life Science and Semiconductor industries

A substantial investment of SGD 1 billion will be allocated to refresh biotech and medtech infrastructure in the great one-north area, and to build a new national semiconductor R&D facility. These facilities aim to keep Singapore’s capabilities in biotechnology and semiconductor research at the cutting edge.

3. Encouraging Adoption of AI Solutions with 150$ Million Enterprise Compute Scheme

To further encourage the adoption of innovative solutions, the government will continue to support programs such as the Productivity Solutions Grant (PSG) and SME Go Digital. These initiatives provide SMEs with the necessary resources and guidance to integrate digital solutions into their operations, driving productivity and growth.

A newly announced Enterprise Compute Scheme will see SGD 150 million dedicated to helping companies adopt advanced solutions from established cloud service providers and consulting firms. This initiative is designed to enhance business efficiency and competitiveness through the integration of AI and other cutting-edge technologies.

4. $200 Million Top-Up for NTU CTC Grant

An additional SGD 200 million will be injected into the NTU Company Training Committee (CTC) grant. This top-up aims to support upskilling workers and improving business outcomes, ensuring that Singapore’s workforce remains competitive and well-equipped for future challenges.

Innovation at the Heart of Sustainable Growth

Singapore recognizes that innovation is fundamental to achieving sustainable long-term GDP growth. Budget 2025 reinforces this vision by maintaining investments in existing initiatives while launching new programs focused on emerging technologies like AI, life sciences, and semiconductors.

By prioritizing R&D, workforce development, and cutting-edge infrastructure, Singapore is not only addressing current challenges but also laying the groundwork for a resilient, innovation-driven economy that can thrive well into the future.

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FI Group Expertise

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FI Group Expertise