History is shaped by bold bets—pivotal moments when nations, industries, and societies take decisive action to redefine their futures.
Few places embody this spirit of boldness more than Singapore.
Over the past 60 years, the city-state has transformed itself from a small trading port into a global powerhouse, with the rise of industries like manufacturing and financial services, and real GDP growing at an average of 7 percent annually—among the world’s fastest.
This transformation did not happen by chance. Instead, it was driven by forward-thinking policies and the willingness to take risks. The question now is: What bold bets will define the next 60 years? We believe that Singapore will not only ride the next wave of growth, but lead it.
Arenas of competition—the next wave of growth
McKinsey Global Institute (MGI) has studied global shifts through the lens of “arenas of competition”—industries characterized by outsized growth and dynamism, concentrated value creation, and transformational potential. These arenas matter because they are where the business world is being reshaped. They serve as launchpads for new global giants while signaling where value and disruption will concentrate over the next 20 years.
As a concrete example, AI is one of these arenas. Once the domain of research labs, it now drives global market capitalization and new enterprise creation. Companies like OpenAI and Nvidia barely existed 20 years ago, yet now they’re at the forefront of global innovation. Between 2005 and 2023, 12 distinct arenas emerged. Eighty percent of activity in this set of arenas occurred in the US and China, which benefited from deep capital pools, existing leading players, and large middle classes. The Association of Southeast Asian Nations (ASEAN), however, accounted for less than 1 percent. But in the future, that can change.
The next generation of arenas is set to generate $29 trillion to $48 trillion in annual revenue by 2040. Indeed, the largest market for these arenas will be the Asia‒Pacific (APAC) region, where revenue could reach between $13 trillion and $21 trillion by 2040. This is nearly twice that of the US, where the next-highest projected future revenue will be generated. These arenas are centered on six interconnected trends: a foundation built on semiconductions, continued expansion of the digital economy, the AI surge, rapidly increasing electrification, demand for new biopharma, and the evolution of the physical realm.
While most leading companies in the US and China sit within arenas, less than half of the leading companies in Singapore are currently situated within one. History shows, however, that early signs of activity in arenas, even small, are strong indicators of future dominance. Singapore already shows promising signals across a number of tomorrow’s arenas: GlobalFoundries and Micron are expanding advanced semiconductor fabrication and R&D campuses; Grab is piloting autonomous, electric mobility and on-demand logistics from its Singapore tech hub; Sea Group’s Shopee and Garena are anchoring regional e-commerce and video-game ecosystems; TurtleTree is creating synthetic proteins with FDA approval; and Equatorial Space Systems is working on rockets and launch services.
Singapore’s opportunity
Through these arenas, Singapore can create disproportionate value in the decades ahead, with four imperatives in mind.
First, as the world fragments, Singapore should double down on its long-held role as a connector—strength lies in Singapore’s open economy. As geopolitical blocs form, Singapore can bridge divides through diversified trade deals, digital economy agreements, and robust physical infrastructure links. MGI has published research on how global trade corridors are changing, revealing that over 30 percent of global trade could shift between corridors by 2035 due to fragmentation and diversification influenced by geopolitical dynamics and economic policies. Singapore’s logistics and data positioning will be invaluable in helping it to manage these shifts.
Second, Singapore should prioritize the adaptation of advanced manufacturing. Singapore’s robust manufacturing stronghold already amounts to about 20 percent of its economy, especially in petrochemicals, electronics, and pharmaceuticals. As AI applications move from digital to physical, Singapore can pioneer “AI-native” manufacturing by embedding AI in production lines; designing smart factories for modular, low-batch, high-mix outputs; integrating cyberphysical systems; and establishing real-time supply chain coordination. This will help Singapore retain its competitive edge, although the evolution will require reskilling, deep R&D-industry partnerships, and bold investment.
Automation and robotics are a key area of opportunity here, as the labor equation evolves. Singapore’s working-age population share peaked in 2012 at 79 percent and will fall to 64 percent by 2050. Simultaneously, gen AI stands to automate 30 percent of hours by 2030, and robotics has the potential to reduce demand for physical labor by 11 to 16 percent. In the use of robotics in manufacturing specifically, Singapore has room to catch up to the global leader, Korea, on robot-to-worker density—Korea currently has about 1,012 robots per 10,000 workers, while Singapore has 770.
Third: All this change hinges on people, making reskilling the next universal enabler. The average half-life of skills is now less than five years, and in some fields, like tech and AI, it’s as short as 2.5 years. Workers now face a continuous skills treadmill, requiring lifelong reskilling and upskilling. Education must be reshaped from discrete learning to continuous learning. Our traditional ways of learning will need to be rethought to include AI-powered learning to bring people and machines into a state of superagency. To ensure success, it will be critical that governments institutionalize continuous learning through national frameworks.
Finally, Singapore can unleash the power of private capital. Growth in the future will be capital-intensive, yet many remain hesitant to invest in the face of current disruptions. Singapore’s proven, long-term investment horizon and deep pools of capital and investment talent are distinct advantages. In 2024, Singapore attracted approximately $5 billion in venture capital (VC) investment, equivalent to just under 1 percent of GDP, with potential for future growth. Wealthtech—technology-enabled fintech that facilitates the flow of capital more effectively—could unlock 45 percent of personal assets in cash and deposits in APAC, while a $5.8 trillion intergenerational wealth transfer set to occur in the next five years may generate targeted investments. Longsighted government policy can help Singapore unlock private risk capital such as angel investing, VC, and private equity to efficiently spur growth.
The opportunity is there for Singapore to compete and win in the global arenas of the future through its openness, its long-term vision, its willingness to embrace change, its talent, and its capital markets. The country already has leading companies operating at the cutting edge of these new arenas. Singapore’s next 60 years look incredibly exciting.