SINGAPORE - The data centre sector is making an “outsized” contribution to Singapore’s economy and has created several thousand jobs directly linked to this sector – with above-average wages, said a report by the Asia-Pacific Data Centre Association (APDCA).

The report cited a 2023 study commissioned by Amazon Web Services which found that data centres add more than $2 billion annually to Singapore’s economy – nearly half the size of the total retail sector and larger than the entire hospitality sector.

The Amazon study also estimated that data centres enabled up to 1.6 million jobs across the country, representing approximately 70 per cent of Singapore’s resident labour force.

Around 25,000 jobs were linked to the presence of physical data centres. Of these, around 7,000 are employed within data centres themselves, while a further 17,000 are linked through the data centre supply chain.

The 7,000 direct data centre jobs were notably high-paying and productive, with wages 35 per cent above the national average and labour productivity 2.6 times higher.

Looking ahead, data centres in Singapore are projected to drive a 2.8-fold increase in jobs and an 8.9-fold growth in economic contribution by 2030 compared to 2022 levels, said the APDCA report.

It found that given Singapore’s land constraints, data centres demonstrate remarkable efficiency – generating 85 per cent higher land productivity than the average land use in the country.

On a per hectare basis, data centres deliver $59.9 million in economic value, which is almost double the national average.

Data centres have also played a key role in helping Singapore secure and maintain its position as a regional digital hub, said the report.

By enabling the low latency required for data-driven services, data centres have helped reduce business costs, attracting around 7,000 multinational firms to establish a presence in Singapore – 4,200 of which serve as regional headquarters largely dependent on local data centres. 

The APDCA report, which looked at data centres in five Asia-Pacific countries, also highlighted the robust growth of the industry in Malaysia.

Revenues are projected to reach RM3.6 billion (S$1.1 billion) by 2025, up from RM2.1 billion in 2022. This momentum is supported by strong government backing, with the Malaysian Investment Development Authority approving 12 major data centre projects totalling US$20.9 billion.

The sector is valued at US$4 billion (S$5 billion) in 2024, and is forecast to surge to US$13.6 billion by 2030, growing at a strong annual rate of 22.4 per cent.

THE BUSINESS TIMES

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