Rethinking Singapore's Economic Playbook
On September 16, 2026, The Straits Times published a commentary on multinational corporations (MNCs) and Singapore's economic resilience, titled "Stop trying to build Singapore MNCs," by Asia Academy of Digital Economics (AADE) Chairman Tan Chong Huat, who is also Chairman of RHTLaw Asia, and AADE President Tan Poh Hwee. The authors argue that the real path to economic resilience lies in deep-tech niches, patient capital and turning humble local suppliers into indispensable linchpins of global supply chains.
According to the commentary, Singapore's prosperity was built by persuading MNCs to locate serious activity in Singapore, then using their presence to upgrade workers, suppliers and institutions. The next phase, the authors write, should focus less on replacing MNCs with local champions and more on making Singapore harder to bypass. The commentary draws on the 2026 National Day Rally, at which Prime Minister Lawrence Wong outlined a blueprint to master new technologies, attract leading companies, build local capabilities and equip Singaporeans with new skills.
Two Singapore Firms That Became Hard to Replace
To those who cite the dearth of world-beating Singapore companies, the authors point to AEM Holdings and Micro-Mechanics. After a S$17.9 million loss in 2009 put AEM Holdings on the Singapore Exchange's watch list, it survived on one asset: Intel as a customer. Private equity investment in 2011 and four years spent rebuilding reliability and talent produced its High Density Modular Test platform, which moved from laboratory units in 2015 to commercial production in 2016. Revenue rose from S$47.6 million to S$221.6 million over the same span. The harder task, converting knowledge from one customer into technology that could travel beyond it, was met when Intel opened the ecosystem to its foundry customers, and later through AEM's partnership with Advanced Semiconductor Engineering, the world's largest provider of chip assembly, packaging and testing services.
Micro-Mechanics survived a slower crucible. Started in 1983 with S$1,200, one employee and a 500-square-foot workshop, it avoided competing head-on with equipment giants, focusing instead on consumable precision tools for critical semiconductor production processes. Four decades of refinement have taken it to more than 600 customers across five countries.
The authors observe that neither firm merely supported MNCs. Both became hard to replace by solving narrow, costly problems and retaining engineering and research and development (R&D) knowledge in Singapore. The lesson, they write: an anchor customer supplies demand and credibility, but a supplier must use that to build its own business and diversify beyond its first customer.
Why Anchoring Multinationals Still Matters
The commentary notes that the alternative is riskier. Building a domestic MNC from scratch can take decades of financing and failed bets, made harder by Singapore's small market, which forces firms to internationalise before reaching scale at home. Using MNC demand as a proving ground does not eliminate that risk but reduces it; the goal is portable technology and market access, not remaining a sub-contractor indefinitely.
The numbers, the authors write, underscore why MNCs must stay anchored. Majority foreign-owned firms make up roughly a quarter of enterprises and a third of employment, yet generate about two-thirds of nominal value added. In 2025, foreign sources supplied about 95 percent of the Economic Development Board's (EDB) fixed-asset investment commitments. Of the roughly S$9 billion that businesses spent on R&D in Singapore in 2023, local enterprises, including government-linked companies, accounted for only about a fifth. This does not prove foreign firms are better run, as they cluster in capital-intensive sectors, but it shows that local firms capture too small a share of the technology and pricing power around them.
The risk, the commentary argues, is not a dramatic MNC exit but a slow bleed: a regional team consolidated elsewhere, a research mandate trimmed, a supplier dropped from a procurement network. Each decision looks manageable alone, yet cumulatively they decide where technology and talent accumulate. The authors therefore propose scoring major incentive-supported MNC investments on two measures: the capital, jobs and R&D committed, and the local capabilities created, namely suppliers qualified, engineers trained and local intellectual property (IP) created, to be reviewed after three to five years. This is not a local-content quota: Singapore firms would still meet global standards, but capable suppliers would get a credible route to qualification.
Lessons from Switzerland and the Nordics
To build more firms like AEM rather than hope they emerge, the authors turn to Switzerland and the Nordic countries, which built institutions around three problems that trap smaller firms: scarce skilled talent, capital unwilling to wait for industrial maturity, and the difficulty of turning research into sellable products. Switzerland's dual apprenticeship system gives technical vocations prestige and a steady worker pipeline, while multi-generational family ownership lets firms invest patiently rather than sell early. The VTT Technical Research Centre of Finland, a state-backed applied research and technology organisation, and the state-owned Research Institutes of Sweden tackled the problem of translation directly, giving smaller firms access to scientists, pilot facilities and testing infrastructure they could not afford alone, and helping build supplier ecosystems around firms such as Nokia and Ericsson.