Scale of foreign companies' work requires higher skills, say experts

Foreign-owned firms often make investments in Singapore to build the capacity to serve customers in larger overseas markets from here.

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The scale of their work, in turn, gives rise to a need to create high-skilled jobs in Singapore in greater volume, which economists and labour experts identified as a key reason behind foreignowned firms accounting for an outsized share of high-earning jobs here.

Their comments come after the Ministry of Manpower (MOM) revealed on Sept 17 that foreign-owned firms made up some 20 per cent of all firms with at least one employee, but employed 60 per cent of Singapore residents drawing above $12,500 in gross monthly salary.

Singapore residents comprise both citizens and permanent residents.

These numbers were released for the first time in Singapore's second-quarter labour market report.

"Bearing in mind that Singapore is a small, resource-scarce economy, the foreign direct investment (FDI) that comes here is really not targeting the domestic market," said OCBC Bank chief economist Selena Ling.

Likewise, UOB associate economist Jester Koh said much of the FDI inflows here are associated with multinational corporations, which arguably have a much larger scale in terms of operations and target markets relative to domestic firms.