Singapore named world’s third most innovative city
JLL research reveals that real estate capital is following innovation
SINGAPORE – Singapore stands only behind San Francisco and Tokyo in world innovation rankings, according to new research from global real estate consultant JLL.
Singapore’s high ranking is supported by significant levels of foreign domestic investments, and a rapidly-growing start-up scene. A regional hub for R&D and services, Singapore is the world’s top destination for FDI in high-tech industries. Over US$10 billion has been invested over the last three years in sectors ranging from software design to semiconductor manufacturing. Global tech companies such as Google and Facebook have established regional operations in the city, while it has also seen over US$10 billion of venture capital invested in local start-ups over the same period.
The Innovation Geographies report, which looks at factors such as investment in high-tech industries, research and development expenditure and talent pool, further reveals that in today’s technology-driven world, innovation-oriented cities have a strong competitive advantage in attracting capital. Of the 109 cities analysed, the seven leading Asia Pacific cities – Tokyo, Singapore, Beijing, Seoul, Shanghai, Shenzhen and Sydney – accounted for more than 50 per cent of total annual real estate investment volumes over the past decade in the region.
Ms Tay Huey Ying, Head of Research and Consultancy, JLL Singapore explains, “Targeting innovative cities has now become an explicit part of investment strategies. This is partly because innovation centric cities appears to be more resilient to economic shocks. For example, tech-savvy cities such as Seoul, Berlin and Chicago, saw average real estate capital values fall less and bounce back more quickly.”
Dr Megan Walters, Head of Asia Pacific Research, JLL adds, “Innovation plays a key role in driving cities’ economic growth by attracting investors and companies. Investors tend to focus on locations that are capable of sustaining long-term occupier demand, while corporates are drawn to those that have sophisticated innovation ecosystems and deep talent pools to ensure they are well-placed to succeed in the global marketplace.”
Although Singapore has fallen out of JLL’s top 20 talent hotspots, mainly due to the drag of a slow growing ‘engine room’ population – i.e. those in the 20-40 years cohort, Singapore scored well on other talent attributes such as its well-educated workforce, the presence of three world class universities and an above-average proportion of the workforce employed in high-tech industries.
Ms Tay concludes, “This study reinforces our optimism for Singapore real estate investment and office markets to stay vibrant in the short to medium-term, barring adverse external shocks. That said, competition is heating up and many cities are making rapid progress towards developing sophisticated future-looking business ecosystems. Singapore must not rest on its laurels, but instead strive to stay ahead of the competition by continuing to nurture an innovative culture, for example through allocating a higher budget for Research and Development.”
For more information, download the Innovation Geographies report here.
Top 20 innovation geographies
JLL’s Innovation Geographies study covers over 100 cities globally and tracks a broad range of factors to assess a city’s innovation capacity and the relative strength of its talent pool. Innovation is defined by the level of foreign direct investment in high-tech industries; research and development expenditure; the number of patents awarded and venture capital activity. The strength of a city’s talent pool is determined by its demographics, the quality of its higher education institutions, the proportion of people with a bachelor’s degree and employment in high-tech industries.
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. Our vision is to reimagine the world of real estate, creating rewarding opportunities and amazing spaces where people can achieve their ambitions. In doing so, we will build a better tomorrow for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.3 billion, operations in over 80 countries and a global workforce of over 91,000 as of March 31, 2019. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.