Singapore and the Bay Area

Leveraging Emerging Opportunities in Southeast Asia

This report assesses the Bay Area’s economic and business ties with Southeast Asia, focusing on its leading economies—Singapore, Indonesia, Malaysia, Thailand, Vietnam, and the Philippines—and their potential as markets and economic partners. It focuses in particular on Singapore, which offers a unique platform for business in Southeast Asia and the Asia-Pacific area, and where many Bay Area companies have established major regional operations. In doing so, it looks at the distinctive synergies between the Bay Area and Singapore around technology, innovation, urban development, and other fields where priorities and capacities align.


This report was developed and written by Sean Randolph, Senior Director at the Bay Area Council Economic Institute. Isabel Monteleone, Research Assistant at the Institute, provided supporting research, and Anupam Yog of Mirabilis Advisory provided valuable introductions and support in Singapore.

The Economic Institute wishes to thank our sponsors, the Singapore Economic Development Board and Salesforce, for supporting this project. We are also indebted to the many individuals who generously provided critical information and their personal time and insights.

Image Credits

Featured Header Image: Marina Bay with Singapore Flyer in the foreground; photo by chuttersnap on Unsplash

Singapore central waterfront container wharves; photo by chuttersnap on Unsplash

Singapore skyline; photo by J. Philipp Krone on Flickr

Merlion Park, Singapore; photo by Nigel Swales on Flickr

Singapore Water Sports Centre view; photo by Wengang Zhai on Unsplash

Capitalizing on Growth and Development in Southeast Asia

Southeast Asia is a region of untapped opportunity compared to its potential.

The Association of Southeast Asian Nations, known as ASEAN, is a regional bloc comprising ten countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. ASEAN, much like the European Union and other multinational economic communities, endeavors to increase economic prosperity through economic, political, social, and cultural cooperation. The ASEAN member nations compose a region with a population of 650 million that has sustained high growth for more than three decades.

Singapore and ASEAN’s Five Fast-Growing Economies at a Glance, 2017–2018

As Manufacturing Shifts from China, Southeast Asia Will Be the Primary Beneficiary

In the 1990s and early 2000s, many Southeast Asian economies lost ground to China, whose size and growth attracted international investment at a large scale. Since 2015, however, they have regained ground. This has been driven in part by rising costs in China, trade conflicts with the US and other countries driven by Chinese industrial and technology policies, and challenges faced by overseas companies in accessing China’s market. As US companies look to diversify their Asian presence, economic growth and rising middle classes in Southeast Asia offer an alternative destination in the region.

The Region’s Internet Economy is Growing Rapidly

  • There were more than 360 million internet users in the six leading countries in 2019—100 million more than in 2015.
  • More than 90% of Southeast Asians connect to the internet primarily through smartphones, making Southeast Asia one of the most mobile-first internet regions globally.
  • In 2019, Southeast Asia’s internet economy reached an estimated $100 billion in gross merchandise value (GMV) across the online travel, e-commerce, online media, and ride hailing sectors—up 40% from 2018.
  • Internet economy investment in the region has grown at an exponential pace since reaching the $1 billion mark in 2015. The inward funding flow reached a record high of $14.1 billion in 2018, and internet firms raised $7.6 billion in the first 6 months of 2019, about 7% more than in the first half of 2018.
  • Governments across the region are capitalizing to accelerate the delivery of government services digitally.
  • This activity is reflected in increasingly vibrant startup ecosystems.

Singapore's Economy

Planning Execution, and Open Markets

Since its independence in 1965, Singapore has evolved from a small trading center to become a major transshipment port, an international financial center, a regional base for multinational corporations, and a production center intimately linked to global supply chains. It is now aspiring to become a regional center for technology and innovation. Strategically, its economy has been moving progressively toward higher value activities.

  • Global Rankings: Global indexes consistently rank Singapore among the world’s most competitive and innovative economies.
  • Government Strategies: Singapore’s government engages deeply in economic planning and has been extraordinarily effective in the development and execution of medium and long-term strategies. In contrast to many countries, execution is a priority and existing plans are closely monitored and adapted as conditions change.
  • The Push for Innovation: Singapore’s government is attempting to build a local innovation ecosystem. A work in progress, its push builds on initiatives led by the Agency for Science, Technology and Research (A*STAR), the National Research Foundation (NRF), and the Campus for Research Excellence and Technological Enterprise (CREATE).
  • A Focus on Startups: BLOCK71 provides Singaporean and other startups one-stop access to supportive services; the program’s seven buildings now house 250 companies and 30 incubators and venture firms, and there are additional facilities in Indonesia, China, and San Francisco. Fusionopolis and Biopolis, facilities in Singapore’s one-north area, are designed to stimulate concentrated key technology clusters. EDBI (the investment arm of the Economic Development Board), Singtel Innov8, SG Innovate, and SEEDS Capital invest in startups across multiple stages. Sovereign wealth funds GIC and Temasek invest globally in both listed companies and startups.

The Bay Area and Singapore

Expanding Economic Ties and Business Opportunities

An Important Trade and Investment Relationship

Despite its small population, Singapore is an outsized trading partner.

  • Under a free trade agreement between the United States and Singapore that has been in place since 2004 supporting two-way market access in goods, services, investment, and government procurement, US goods exports to Singapore are subject to zero tariffs, and US service exports receive national treatment (meaning that US service suppliers are treated the same as domestic suppliers).
  • Two-way trade, already strong before the agreement was signed, has continued to grow, reaching $90 billion in goods and services in 2018, with a positive trade balance.
  • Singapore is California’s 12th largest global export market, with sales of $4.435 billion in 2018.
  • Singapore was the 6th fastest-growing source of foreign direct investment (FDI) in the United States in 2018. The stock of Singaporean FDI in the US totaled $54.2 billion in 2018, while the stock of US FDI in Singapore totaled $218.8 billion.

The Bay Area in Singapore

Along with other global companies, Bay Area companies have a substantial presence in Singapore, making it a business hub for Southeast Asia whose reach also extends to East Asia, Australia, and in some cases to India. Many factors lie behind this, including favorable tax policies, a high quality of life for expatriates, and a central location in Southeast Asia with access to efficient transportation networks. Singapore’s open economy and rule of law offer a stable long-term base.

Singapore in the Bay Area

Reflecting the Bay Area’s central role as a global technology and innovation hub, Singapore’s government has established a significant footprint in the region. By leveraging its assets, the goal is to support entrepreneurial activity, attract investment, and more deeply connect the two innovation ecosystems. Presences include the Singapore Economic Development Board (EDB), Enterprise Singapore (ESG), BLOCK71 San Francisco, Smart Nation, National University of Singapore (NUS), Singapore’s sovereign wealth funds GIC (Government Investment Corporation) and Temasek, and startups and corporate connections.

Singapore and ASEAN

Building New Synergies


Economic growth in Singapore and the ASEAN region is offering new opportunities for Bay Area and California companies and organizations to expand or diversify their presence in Asia. Of 18 high-growth “outperformers” identified in a September 2018 McKinsey Global Institute study of high-growth emerging economies, four long-term outperformers—Singapore, Thailand, Indonesia, and Malaysia—are ASEAN member countries. Underlying this performance are pro-growth policies, fueled by strong competitive dynamics. Young populations, rising middle classes, increased technological capacity, and an explosion of internet and mobile activity are driving the process. Singapore in particular offers a business environment characterized by open markets, transparency, and the rule of law.

These developments are producing new synergies with the Bay Area based on investment, R&D, innovation, and entrepreneurial activity. These opportunities, led by Singapore as a unique regional platform, will continue to expand as Southeast Asia grows in strategic and economic importance.