What Singapore's Economic Strategy Review says: 8 directions, 32 recommendations

In June 2026, the Singapore government released the final report of the Economic Strategy Review (ESR), titled “Securing Growth and Good Jobs in a Changing World.” It runs more than 80 pages, with 8 directions and 32 recommendations. This article breaks it down: why it was done, what was assessed, what was recommended, what is already being done, and what it means for people starting businesses and working in Singapore.

Original PDF: file.go.gov.sg/esr-finalreport.pdf (2.8 MB). Official feature page: gov.sg/features/esr. The figures cited below are all from the body of the report, with page numbers as given in the report.

Timeline

• 2025-08: Launched. Placed under the “Economic Resilience Taskforce” led by Deputy Prime Minister Gan Kim Yong, with 5 committees set up.
• 2025-08 to 2026-04: More than 80 consultation sessions, reaching over 7,700 people: 200 trade associations, 6,700 businesses, 2,000 workers, and 1,500 fresh graduates.
• 2026-01-30: Mid-term update. Based on this, the government formed the National AI Council and decided to merge SkillsFuture and WSG.
• 2026-05-13: The 32 recommendations were announced at the Singapore Business Federation’s “Future Economy Conference.”
• 2026-06: The final report was released. Budget 2026 had already responded to some of it in advance.

Conclusion first

The core judgment of this report can be summed up in one sentence: Growth no longer automatically brings the same amount of work. Over the past few decades, Singapore attracted investment through openness, connectivity, trust, and adaptability; investment brought industries, and industries brought good jobs. The report says the premise of this chain has changed, for three reasons.

• The world is fragmenting. Economic decisions are increasingly shaped by national security, and tariffs, subsidies, and local content requirements have become the norm. The report was written during the Middle East crisis, when the Strait of Hormuz was temporarily closed, and the report cites this example in several places.
• AI and the low-carbon transition are restructuring industries. AI lets companies “do more with fewer people,” so the same amount of growth creates fewer jobs.
• The local workforce is shrinking. The population is ageing, and the fertility rate is below the replacement level.

The Ministry of Trade and Industry(MTI)’s assessment for the next decade is a trend growth rate of 2% to 3% per year. The report says this figure is already high among developed economies and won’t be easy to achieve; the goal is to aim for the upper end of the range.

So the report’s structure is in two halves: the first four directions discuss how to preserve growth, and the last four discuss how to turn growth into jobs, with an added layer of resilience. It does not shy away from the fact that AI will replace jobs, and it explicitly opposes “slowing down AI deployment in order to protect jobs.” Its answer is: government subsidies for businesses using AI are fine, but they must be judged by worker outcomes; if the outcomes fall short, the subsidy approach must be reviewed.

Three principles

The report uses three “imperatives” to govern all the recommendations. Here they are explained in plain language.

• Sharpen our value proposition: Singapore lacks scale, so it can only go deep where it can “create the most value for others,” building advantages that others find hard to replicate.
• Enhance agility and adaptability: Change is accelerating. Institutions, businesses, and the workforce must all be able to act faster, take controlled risks, solve problems quickly, and continually renew themselves.
• Build resilience alongside efficiency: Small open economies are always exposed to external shocks. They need to be able to absorb shocks, diversify risk, keep strategic buffers, and then bounce back quickly.

Eight directions, 32 recommendations

For each direction: one sentence on what the direction aims to do, a list of specific recommendations, and a final paragraph on the corresponding actions the government has already announced in Budget 2026 and the Committee of Supply debates. The first four lean toward economic growth, and the last four lean toward jobs and resilience.

Part A: Preserving economic growth

Direction 1: Be globally leading in our strengths, while placing big bets on the future

Semiconductors, pharmaceuticals, life sciences equipment, specialty chemicals, and aerospace are existing strengths. The report says Singapore cannot just defend these; it must move up the value chain, and also commit some resources to bet on new fields, since “the cost of inaction is greater than the cost of failure.”

• Redesign investment promotion strategy to pursue only industries where “hard-to-replicate advantages” can be built
• Push local companies to upgrade their production systems: AI, robotics, digitalisation, low-carbon
• “Anchor” investment into the local ecosystem: public research institutions, local suppliers, talent pipelines
• Invest early in emerging technologies: quantum, space, decarbonisation technology
• Expand “trust-based high-value services”: cybersecurity, AI governance, audit, compliance, risk management

Already announced: An S$800 million semiconductor flagship programme under RIE2030 (advanced packaging, advanced photonics); an S$800 million “Decarbonisation Grand Challenge”; the establishment of a National Space Office; corporate R&D spending rose from S$4.3 billion to S$9 billion between 2013 and 2023, with a further S$3 billion-plus investment under RIS(C).

Direction 2: Become a global leader in AI solutions, and bring AI to the whole economy

The report states clearly that Singapore is not competing for the largest models or the largest data centres, but instead aims to be the place where “AI solutions are developed, tested, deployed, and scaled in real-world settings.”

• Problems are jointly set by the National AI Council and industry, backed by data, compute, and regulatory sandboxes, to turn pilots into deployment at scale
• A group of local leading enterprises are selected as “AI champions,” given customised support for end-to-end transformation, to serve as models for their peers
• Driving economy-wide adoption: industry associations consolidate demand and share data to build industry-level shared solutions. SME AI adoption stands at only 14.5%, versus 62% for large enterprises

Already announced: the National AI Council chaired by the Prime Minister; four national AI missions: advanced manufacturing, connectivity, finance, and healthcare; the Kampong AI precinct in One-North, to be completed in 2028 with 400 housing units, with pilot workspaces available from 2026; the National AI Impact Programme, a three-year effort to support 10,000 SMEs and train 100,000 workers to be “AI fluent,” starting with the legal and accounting industries.

Direction 3: From a “hub that flows pass through” to a “hub where flows are organised, financed, and governed”

Ports, airports, finance, and data flows form Singapore’s foundation. The report’s concern is that supply chains are being restructured, and if Singapore merely lets goods pass through, it risks being bypassed. What must be captured is the value in the layer that organises flows, even when physical trade does not pass through Singapore.

• Next-generation sea and air hubs: integrating physical facilities with AI systems to provide specialised handling for demanding cargo such as semiconductors and pharmaceuticals
• Supply chain management, global procurement, demand planning, and standard-setting; in finance, shifting from a “destination for capital” to “a place where capital is raised, structured, deployed, and recycled.” Assets under management grew 12% in 2024 to S$6.07 trillion
• Trusted data flows: data governance and AI audit capabilities, cross-border data-sharing mechanisms, cross-border digital identity and corporate data passports, tropical data centre standards
• Energy hub: LNG trading and bunkering, ammonia, hydrogen, sustainable aviation fuel, with Jurong Island as a testbed for low-carbon technologies, and exploring an energy futures market

Already announced: a second LNG terminal to be operational before 2030, raising import capacity by 50% to 15 million tonnes per year; GasCo established in April 2025 to centralise procurement of gas for power generation, and has already been buying alternative gas sources since the Middle East crisis.

Direction 4: Enabling more Singapore companies to start up, scale up, and go global

Singapore’s startup ecosystem ranks fourth globally on the StartupBlink index, with 4,500 tech startups and 500 VCs. The report identifies the bottlenecks as growth-stage funding, market access, and top talent, as well as friction in corporate exits and restructuring.

• Growth-stage capital: developing venture debt, private credit, and secondary markets. Venture debt accounts for less than 5% of startup funding in Singapore, versus about 25% in the US
• Strengthening public markets so that SGX becomes a listing venue for quality mid-sized companies, providing an exit channel for VCs
• Helping startups win “first orders” from large enterprises and government: PACT, Corporate Venture Launchpad 3.0, Innovation Procurement Partnership
• Moving investment promotion further upstream, to attract “emerging champions” rather than just mature multinational corporations
• Supporting high-risk, high-investment overseas expansion, with a target to “substantially increase the number of Singapore-headquartered companies with revenue exceeding S$1 billion”
• Helping companies with health checks and transformation: restructuring, relocating part of operations abroad, mergers and acquisitions, orderly downsizing; lowering exit costs, such as land reinstatement fees
• Reviewing foreign worker policy and employee stock option tax treatment for startups

Already announced: a Growth Capital Workgroup; an additional S$1 billion for Startup SG Equity, extended to growth-stage deep tech; a second S$1.5 billion tranche of the Anchor Fund to serve as a cornerstone investor for IPOs; a new AI and Technology track for ONE Pass, with non-cash compensation such as stock options counted toward the monthly salary threshold from 1 January 2027; the Global Innovation Alliance launching “Launch” and “Grow” programmes.

Part B: Creating Good Jobs, Strengthening Resilience

Direction 5: Creating more, and more diverse, good jobs

This chapter takes the clearest stance: AI adoption should not be slowed down to preserve jobs; but government support for enterprises adopting AI must come with explicit expectations for worker outcomes.

• Staying open to global talent, while transferring capabilities in a more structured way: skills pathways, mentorship, and local leadership pipelines. The COMPASS framework should be updated regularly to ensure foreign professionals are a “complement” rather than a “replacement”
• Prioritising support for AI that “augments workers,” focusing on industries where judgment, interaction, and trust remain core. Where support fails to translate into worker outcomes, the mode of support should be reviewed
• Raising job quality in resilient industries: early childhood education, allied health, social services, and skilled trades. Building structured apprenticeships to gradually reduce reliance on low-cost, low-skill labour
• Treating entrepreneurship as a legitimate career path: exposure starting from secondary school, helping first-time entrepreneurs “get off to a good start,” and building mentor networks

Already announced: Ministry of Manpower(MOM) signed a memorandum of understanding with the Coalition of Skilled Trades Unions to pilot skills frameworks and career ladders starting with the electrical trade; East Ventures’ “My First $1000” programme, giving students aged 14 to 18 S$250 in starting capital, with an initial cohort of 264 students.

Direction 6: Building a stronger system for career transitions and worker support

The report singles out two groups: workers in industries facing large-scale restructuring, and professionals, managers, and executives (PMEs). In 2025, the resident PMET retrenchment rate rose to 10.1 per thousand, up from an average of 8.0 between 2015 and 2019.

• “Career Bridge”: before large-scale retrenchments occur, mapping high-risk roles to adjacent resilient roles, paired with training, coaching, and matching. Example: data entry clerks transitioning to community care executives
• Earlier intervention in retrenchments: currently companies must report within 5 working days of notifying employees; the recommendation is to encourage earlier notice, shorten the timeline, and start support before employees leave
• PME support: the SkillsFuture Jobseeker Support Scheme currently covers only those earning below S$5,000 a month; the recommendation is to expand coverage, and to study income smoothing during pay cuts associated with career switches
• Continuously monitoring AI’s impact on employment; if the shock is larger than expected, consider more structural redistribution — “the gains from AI cannot accrue to capital alone”

Already announced: SkillsFuture Singapore and Workforce Singapore are merging into the Skills and Workforce Development Agency, providing one-stop services spanning career coaching, training, and job matching.

Direction 7: Enabling workers to learn for life and take charge of their own career direction

The half-life of skills is now less than 5 years, dropping to as low as 2.5 years in technical fields. Education investment is still concentrated in the first 25 years of life; the report calls for shifting the focus to the working years.

• Modular, stackable learning pathways that let workers accumulate credits while working; expanding funding for in-depth retraining such as postgraduate programmes
• Linking learning to work: more work-study diplomas, with on-the-job learning counted toward stackable credits, and employers shifting from “giving feedback” to “providing positions”
• Three categories of future skills: AI literacy combined with industry expertise (“AI + healthcare,” “AI + finance”), judgment, communication, and empathy, and overseas experience. About half of Singaporeans want to work abroad, but only 3% have actually done an overseas posting of more than 6 months
• A more flexible career services ecosystem: bringing in private service providers, especially to serve mid-career professionals; strengthening corporate HR capabilities

Already announced: Ministry of Education(MOE) strengthening ITE work-study diplomas; expanding the Overseas Market Immersion Programme (OMIP); a Higher Education AI Council; the number of people served by WSG rising from 127,000 in 2017 to 355,000 in 2025.

Direction 8: Building economic resilience as a core capability

95% of Singapore’s electricity relies on natural gas, and fuel is almost entirely imported. The Middle East crisis has visibly added weight to this chapter.

• Energy: expanding strategic reserves, diversifying import sources, diversifying the energy mix (solar, regional power imports), and continuing to build capability and institutional readiness for civilian nuclear power over the long term — “no rush to decide, but keep the option open”
• Low-carbon and climate: staying “clear-eyed” about the near-term pace of emissions reduction, while addressing sea-level and heat risks
• Systematically reassessing supply chain dependencies: not just food, but also logistics nodes, digital dependencies, and critical inputs such as fertiliser, aluminium, and helium
• Expanding the network of trusted partners: the essentials trade agreement with New Zealand, the economic security protocol with Australia, and the 14-nation IPEF Supply Chain Agreement, prioritising energy, food, and semiconductors

Already announced: a S$10 billion Coastal and Flood Protection Fund; a Heat Resilience policy office and a S$40 million study on “adapting to the impact of heat”; the Singapore Business Federation and the government jointly establishing a “Competitive Climate Transition Council.”

Numbers worth remembering from the report

These figures describe what Singapore’s economy looks like today, and the report’s judgments are all built on them.

How to Read This Report

Singapore conducts this kind of review every few years: the Economic Strategies Committee (ESC) in 2010 set productivity targets, and the Committee on the Future Economy (CFE) in 2017 delivered seven strategies and Industry Transformation Maps. Compared with the previous two reviews, this one differs in several clear ways.

• For the first time, it states as a premise that “growth does not equal jobs.” The logic of the previous two reviews was that growth drives jobs; this one opens by saying that link will weaken. The second half of the report is essentially preparing for a situation where “growth happens but jobs don’t keep up.”
• For the first time, PME is listed as a group needing protection. Past support systems targeted low- and middle-income workers; this one explicitly states that professionals earning above S$5,000 a month are also being laid off, and are taking longer to find new jobs.
• The stance on AI is “allow it, but hold it accountable.” It doesn’t block AI, but subsidies are tied to worker outcomes, and it leaves room for “structural redistribution if the impact is bigger than expected.” This is a rare formulation in Singapore government documents.
• Resilience moved from an appendix to the main text. The Middle East crisis occurred while the report was being written, and energy reserves, the nuclear option, and reassessment of supply chain dependence were all elevated into standalone directions.
• The diagnosis of the startup ecosystem is more specific. Venture debt, the tax treatment of stock options, ONE Pass recognition of stock options, and land reinstatement costs upon exit — these are all concrete pain points entrepreneurs have raised for years.

It’s also worth being clear about what the report doesn’t offer. Aside from the 2% to 3% trend growth rate and vague targets like “substantially increasing the number of billion-revenue companies,” the report contains no measurable numerical targets. Most of the funding figures were already announced in Budget 2026; the report simply gathers them into a framework rather than adding anything new. The wording on foreign workforce policy remains “stay open, calibrate regularly,” with no directional change. On nuclear energy, it only says “keep the option open.” These are political judgment calls, and the report leaves them to the government.

“The benefits of AI cannot accrue only to those with capital. Workers must also benefit through better jobs, stronger wage growth and broader opportunities.”

Report page 8, Direction 6 (d)

On August 5, Parliament debated a motion by the Workers’ Party titled “A Future Economy that Benefits Everyone,” and the two sides were contesting precisely the direction set out in this report. The debate record has been included in this site’s Parliamentary Debates section.

Items Directly Relevant to People Starting Businesses or Working in Singapore

These are listed separately as “already implemented” and “recommended by the report, not yet implemented.” You can apply for the former now; the latter is worth watching.

All the support for enterprises in the report comes with one shared condition: keep high-value functions in Singapore, paired with the redeployment of local employees. The case of OTS moving its canning plant to Johor was written into the main text precisely because it kept decision-making and coordination functions local. This can be read as the government’s default stance on “going overseas”: you can move production capacity, but not the headquarters.

Who’s on the Five Committees

Each committee is co-chaired by two political office holders, with members drawn from business, unions, and academia. The list says a lot about who is backing this report.

• Global Competitiveness: co-chaired by Jeffrey Siow and Low Yen Ling. Members include DBS CEO Tan Su Shan, PSA International Group CEO Ong Kim Pong, ST Engineering Group President and CEO Vincent Chong, Sembcorp Group CEO Wong Kim Yin, and executives from Applied Materials, General Atlantic and Granite Asia.
• Technology and Innovation: co-chaired by Jasmin Lau and Goh Hanyan. Members come from GlobalFoundries, Thales, Blackstone, BCG, AvePoint, Maribank and Insitro.
• Entrepreneurship: co-chaired by Alvin Tan and Dinesh Vasu Dash. Members are the founders of Carousell, Chope, Castlery, Love, Bonito, Nanofilm, East Ventures and The Lo & Behold Group, plus executives from CapitaLand and KPMG.
• Human Capital: co-chaired by David Neo and Koh Poh Koon. Members include Singapore Airlines CEO Goh Choon Phong, NTU President Ho Teck Hua, executives from LinkedIn, Grab and PwC, and NTUC representatives.
• Managing the Impact of Restructuring: co-chaired by Goh Pei Ming and Desmond Choo. Members are the presidents of the restaurant, retail, logistics and manufacturing associations, plus representatives from NTUC and the Singapore National Employers Federation.

Sources

• Original report: Economic Strategy Review: Securing Growth and Good Jobs in a Changing World, Ministry of Trade and Industry(MTI), Singapore, June 2026
• Official feature page: gov.sg/features/esr
• Mid-term update note: ESR Mid-term Update Media Factsheet, January 30, 2026
• Report on the release of the 32 recommendations: AsiaOne, May 13, 2026