IDA Singapore Singapore Infocomm Industry Survey, 2001 Summary Report
Table of Contents Executive Summary...5 Introduction...7 Methodology...7 Sample Size...7 Analysis and Data Weighting...8 Infocomm Industry...9 Infocomm Industry Growth...10 Infocomm Domestic Market...10 Infocomm Exports Market...11 Value Add...12 Research & Development Expenditure...12 Infocomm Industry Forecast...13 Infocomm Revenue Forecast...13 Research & Development Expenditure...15 Growth Opportunities...16 Appendix A: Infocomm Industry Definition...17 Appendix B: Key Definitions...19 Infocomm Industry Survey, 2001-2 - IDA Singapore
List of Tables Table Page Table 1. Survey Sample Distribution... 7 Table 2. Singapore Infocomm Industry Population Demographics... 8 Table 3. Singapore Infocomm Market Value, 1998-2000 (in S$ billion). 10 Table 4. Singapore Infocomm Market Value, 1999-2002 (in S$ billion). 13 Table 5. R&D Expenditure Forecast, 2002... 15 Table 6. Key R&D Development Areas, 2001-2002... 15 Table 7. Perception of Growth Areas in Year 2001/02... 16 Table A.1. Infocomm Industry Definition... 17 IDA Singapore - 3 - Infocomm Industry Survey, 2001
List of Figures Figure Page Figure 1. Total Infocomm Industry Market Value, 2000... 9 Figure 2. Singapore Total Infocomm Market Value, 1998-2000... 10 Figure 3. Singapore Domestic Infocomm Market Value, 2000... 11 Figure 4. Singapore Export Infocomm Market Value, 2000... 12 Figure 5. Singapore Domestic Infocomm Market Value, 2002... 14 Figure 6. Singapore Export Infocomm Market Value, 2002... 14 Infocomm Industry Survey, 2001-4 - IDA Singapore
Executive Summary This study, targeted at active companies within the Singapore Infocomm industry, was commissioned and undertaken by International Data Corporation, to facilitate a better understanding of the Singapore infocomm industry. Data collection for the study was conducted from January to March 2001 with the objectives of sizing the Infocomm industry and its segments, gauging related indicators such as value-add and R&D and uncovering the industry s key trends and developments. The following are a summary of key findings extracted from the main report. The total Singapore Infocomm industry in 2000 was valued at approximately S$26 billion, registering a growth of 12% over 1999. The 1999 value of the Infocomm industry was S$23 billion, growing at 16% from the previous year. Exports made up 48.4% of overall Infocomm revenue in 2000. The domestic market was valued at S$13.37 billion. Hardware made up the largest share (38%) of overall Infocomm market, followed by Telecommunications (35%), IT services (14%), Software (11%), with the remainder (2%) represented by Online Digital Media and Others. Revenue contributions in the domestic market partitioned by segments are as follows: Hardware (20%), Software (12%), IT Services (17%), Telecommunications (48%), Online Digital Media (1%). The export market was dominated by Hardware (57%) followed by Telecommunications (21%). Software and IT Services contributed 10% and 11% respectively. The export market is growing at a faster rate than the domestic market and is set to exceed the domestic market by 2002. Value-add to the Singapore economy in 2000 by the Infocomm industry was estimated to be worth S$10.9 billion, contributing approximately 7% to Singapore s GDP. IDA Singapore - 5 - Infocomm Industry Survey, 2001
R&D expenditure represented 3.5% of overall Infocomm revenue. R&D efforts were most concentrated on software technology development. Top 5 areas of growth were ebusiness/ecommerce, Web/Internet Design and Development, IT Outsourcing and Mobile & Wireless Communications and Customer Relationship Management. Infocomm Industry Survey, 2001-6 - IDA Singapore
Introduction This report presents the findings from the Infocomm Industry Survey that was conducted during months of January through March 2001. The program is a survey-based endeavor focusing solely on organization who are active members of Singapore s ICT community. The Infocomm community includes all organizations that are involved in the distribution and sales, or services and solutions related to the Computing industry or the Telecom & Communications industry or the Online Digital Media industry. The survey instrument is specifically design to capture information pertaining to the organizations total Infocomm revenues, value added, and composition of their respective businesses. Estimates and opinions on the growth of the organization business both domestic and export are also given allowing an analysis measuring the current size of the ICT Industry, as well as future expectations for Singapore s Infocomm community. Methodology The survey was conducted as a mail based survey distributed to some 8,000 potential respondents. Additional telephone follow-up was required with some respondents to clarify specific data points. The organizations targeted are specifically associated with the Infocomm industry and are broadly categorized as Infocomm hardware wholesalers and retailers, Software & Service providers, related to IT, Telecom and Communications and Online Digital Media. Sample Size The survey questionnaire was distributed to nearly 8,000 organizations in Singapore. Of these approximately 600 completed surveys were returned. These were distributed across the following broad categories: Table 1. Survey Sample Distribution Total Infocomm Hardware Wholesale/Retail 20% Software 10% IDA Singapore - 7 - Infocomm Industry Survey, 2001
Table 1. Survey Sample Distribution Total IT Services 17% Telecom Services 41% Online, Digital and Media Services 12% Total (600 companies) 100% Source: Singapore Infocomm Industry Survey, 2001 Analysis and Data Weighting All results compiled from the survey are weighted to represent the entire population within Singapore s Infocomm Industry. The weighting scheme is used upon the population s distribution along the five broad categories (indicated below) to reduce bias by compensating for differing patterns of nonresponse and to correct the distribution in the sample data to approximate those of the population from which it is drawn. Table 2. Singapore Infocomm Industry Population Demographics 1 Total Infocomm Hardware Wholesale/Retail 27.6% Software 3.4% IT Services 15.4% Telecom Services 24.5% Online, Digital and Media Services 29.1% Total (11,148 companies) 100% Source: Singapore Infocomm Industry Survey, 2001 1 The demographics data are based on the available information from the Department of Statistics. Infocomm Industry Survey, 2001-8 - IDA Singapore
Infocomm Industry Based upon survey finding, it is estimated that the total Infocomm industry to be valued at almost S$26 billion in 2000. This total includes both Domestic and Export values of Infocomm products and services combined. It excludes infocomm-related manufacturing activity. Hardware retail and telecom segments continue to be the main contributors towards Singapore Infocomm revenues in Year 2000. Hardware retail segment, related to computing and peripherals, accounts for approximately 38% of the total Infocomm Industry value, with Telecom services segment accounting for 35% of the total. IT services and software segments represent 14% and 11% respectively. Figure 1. Total Infocomm Industry Market Value, 2000 Others 1% Online Digital Media 1% Telecommunications 35% Hardware Retail 38% IT Services 14% Software 11% Source: Singapore Infocomm Industry Survey, 2001 IDA Singapore - 9 - Infocomm Industry Survey, 2001
Infocomm Industry Growth Overall, the total revenue of Singapore Infocomm industry in 2000, both domestic and export, experienced a growth of almost 12%, up from an estimated value of S$23.2 billion in 1999. Compared to almost S$20 billion in 1998, Figure 2. Singapore Total Infocomm Market Value, 1998-2000 Singapore Infocomm Revenue Revenue in S$ billion 30.00 25.00 20.00 15.00 10.00 5.00 0.00 1998 1999 2000 Year Domestic Export Total Source: Singapore Infocomm Industry Survey, 2001 the total revenue in 2000 has grown by 30%. The almost S$26 billion infocomm pie was almost equally divided the S$13.37 billion domestic market accounted for slightly more than half of the industry revenue. The export market brought in S$12.56 billion. Table 3. Singapore Infocomm Market Value, 1998-2000 (in S$ billion) 1998 1999 2000 Domestic 10.80 12.32 13.37 Export 9.15 10.92 12.56 Total 19.95 23.24 25.93 Source: Singapore Infocomm Industry Survey, 2001 Infocomm Domestic Market Survey results indicate that the Singapore domestic Infocomm market of S$13.37 billion in 2000, had an 8.5% growth over an estimated value of S$12.32 million in 1999. Nearly 48% Infocomm Industry Survey, 2001-10 - IDA Singapore
of this value is attributed to the Telecom Services segment, with the remainder comprised of Hardware Retail (20%), Software (12%) and IT Services (17%). Figure 3. Singapore Domestic Infocomm Market Value, 2000 Online Digital Media 1% Others 2% Hardware Retail 20% Telecommunication s 48% Software 12% IT Services 17% Source: Singapore Infocomm Industry Survey, 2001 Infocomm Exports Market The Singapore infocomm exports market of S$12.56 billion in 2000, had a 15% increase over the 1999 value determined to be S$10.92 billion. This market is dominated by the export value of computing and telecommunication hardware, which accounts for 57% of the total exports. Software and IT services segments account for a total of 21% of the total export value. Telecom exports comprise the remaining 21% of total exports and is largely represented by fixed line derived from overseas communications and mobile and wireless revenues. Growth is however faster compared to the overall Infocomm export revenue from 1999 to 2000 (15% vs. 11.6%). Although small in comparison to the hardware segment, our software, telecoms and IT services registered strong export growth in excess of 20% in 2000. IDA Singapore - 11 - Infocomm Industry Survey, 2001
Figure 4. Singapore Export Infocomm Market Value, 2000 Telecommunications 21% Online Digital Media 0% Others 1% IT Services 11% Hardware Retail 57% Software 10% Source: Singapore Infocomm Industry Survey, 2001 Value Add The total value added to the Singapore economy from the Infocomm industry in 2000 was estimated at S$10.9 billion. A comparison to 2000 GDP figures of S$159 billion at market price suggests that this measure of Infocomm industry value-add contributed approximately 7% to GDP. Research & Development Expenditure Companies were also asked to estimate their R&D expenditures as a percent of their Singapore total infocomm revenue. Overall R&D expenditure in 2000 was estimated to be about S$0.9 billion, just 3.5% of total Infocomm revenues. Infocomm Industry Survey, 2001-12 - IDA Singapore
Infocomm Industry Forecast Infocomm Revenue Forecast Respondents also provided estimated growths for their respective business segments, these taken as an aggregate, result in an optimistic assessment with an compound annual growth rate (CAGR) of 14% over the years 1999 to 2002 for the Total Infocomm Industry, as illustrated in Table 4. The findings also indicate that the exports are set to exceed the domestic market by 2002. The CAGR for exports market is 18% over the years 1999 2002, much higher than the CAGR for the domestic market at 11%. Table 4. Singapore Infocomm Market Value, 1999-2002 (in S$ billion) 1999 2002 CAGR (1999-2002) Domestic 12.32 16.70 11% Export 10.92 18.10 18% Total 23.24 34.80 14% Source: Singapore Infocomm Industry Survey 2001 Singapore domestic infocomm market compound annual growth rates (1999-2002) for each element is as follows: Hardware 7%, Software 15%, Services 19%, Telecom 4% and Online Digital Media (122%). With these differing growth rates, it is projected that the share of the domestic infocomm Industry represented by the telecom and hardware retail segments to reduce to 42% and 19% by 2002 respectively. Both the IT Service and Software segments will account for a greater share of the total export Infocomm Industry value at 19% and 13% respectively. IDA Singapore - 13 - Infocomm Industry Survey, 2001
Figure 5. Singapore Domestic Infocomm Market Value, 2002 100% 90% 2% 1% 2% 5% 80% 70% 60% 50% 40% 30% 20% 10% 48% 42% 17% 19% 12% 13% 20% 19% Others Online Digital Media Telecommunications IT Services Software Hardware Retail 0% 2000 2002 Source: Singapore Infocomm Industry Survey, 2001 Singapore exports infocomm market compound annual growth rates (1999-2002) for each element is as follows: Hardware 17%, Software 22%, Services 22%, and Telecom 18% and Online Figure 6. Singapore Export Infocomm Market Value, 2002 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 0% 1% 1% 1% 21% 20% 11% 11% 10% 11% 57% 57% 2000 2002 Others Online Digital Media Telecommunications IT Services Software Hardware Retail Source: Singapore Infocomm Industry Survey, 2001 Digital Media (90%). With these growth rates, it is projected that the share of the various revenue segments of the total infocomm exports market will remain the same proportionally over the next 2 years. Infocomm Industry Survey, 2001-14 - IDA Singapore
Research & Development Expenditure In terms of the expenditure in research and development, respondents in the infocomm sector forecast a steady increase in research and development expenditure from 3.5% to 5.4% in 2002. Table 5. R&D Expenditure Forecast, 2002 2000 2002 R & D Expenditure 0.91 1.88 Total Infocomm Revenue 25.93 34.80 Percentage of R & D Expenditure 3.5% 5.4% Source: Singapore Infocomm Industry Survey 2001 Among the key R&D development areas, respondents in the infocomm industry also indicated that overall R&D dollars would be concentrated on software technology development, with more than 3 times likely to be spent than in hardware technology development. Table 6. Key R&D Development Areas, 2001-2002 2001 2002 Hardware Technology Development 9.2% 8.9% Software Technology Development 32.1% 31.1% Source: Singapore Infocomm Industry Survey 2001 IDA Singapore - 15 - Infocomm Industry Survey, 2001
Growth Opportunities Respondents were also asked to rate the anticipated growth opportunity for various elements associated with their operations from 2001-2002. On average, respondents considers the highest potential growth areas in the next 2 years are in E-Business/E-Commerce, Web/Internet Design and Development, IT Outsourcing and Mobile, Wireless Communications and Customer Relationship Management. Table 7. Perception of Growth Areas in Year 2001/02 2001 Mean % Growth E-business/commerce 7.0 Web/Internet Design and Development 6.7 IT Outsourcing 6.5 Mobile and Wireless Communications 6.3 Customer Relationship Management 6.2 Network/Data Security 6.1 Data Communications 6.0 Internet Data Center Services 5.5 Call Center/ Customer Service 5.4 E-Learning 5.3 IP Telephony 4.8 Supply Chain Management 4.8 Enterprise Resource Planning 4.8 Source: Singapore Infocomm Industry Survey 2001 Infocomm Industry Survey, 2001-16 - IDA Singapore
Appendix A: Infocomm Industry Definition Table A.1. Infocomm Industry Definition SSIC 2000 Infocomm Category 50515 Wholesale of telecoms equipment 50521 Wholesale of pagers, hand-phones, etc. 50522 Wholesale of office machines & equipment 50523 Wholesale of computer hardware & peripherals 50524 Wholesale of computer software 50525 Wholesale of computer accessories 51471 Retail of pagers / Hand-phones 51473 Retail of computer HW, accessories and SW 51474 Retail of consumable 64211 Fixed line services 64212 Mobile and radio paging services 64213 Satellite uplink and downlink services 64221 Internet service providers 64222 Third party telecommunications/value-added network operator 64223 Web hosting services 64224 Cyber cafes 64229 Data communication services not elsewhere classified 64231 Television broadcasting 64232 Radio broadcasting 64290 Telecommunications not elsewhere classified 71221 Renting of computer and peripheral equipment 72110 Hardware consultancy (include system consultancy) 72120 Software consultancy 72201 Development of e-commerce applications 72209 Development of software and multimedia works 72301 Computer timesharing 72302 Data entry services 72309 DP not elsewhere classified (e.g. data tabulation services) 72401 Maintenance and repair of hardware 72901 Computer facilities management services 72902 Computer systems integration services 72909 Oth computer related activities not elsewhere classified 73105 Research and experimental development on IT 74131 IT market research IDA Singapore - 17 - Infocomm Industry Survey, 2001
Table A.1. Infocomm Industry Definition SSIC 2000 Infocomm Category 74300 Advertising 74404 Publishing of software and multimedia works 74405 Publishing of directories & DBs (including info providing services) 74409 Publishing activities not elsewhere classified 74911 IT manpower contracting services 74952 Art & graphic design services 74991 News agency activities 74997 Call centres 80203 IT education and training institutions 80913 Distance learning infrastructure providers 92111 Motion picture /video production 92112 Motion picture/video distribution 92113 Video filming & recording services 92114 Motion picture/video/television post production services 92115 Service allied to motion picture/ video production/dis 92131 TV programmes production & distribution 92139 Other radio and television related activities 92199 Other entertainment activities not elsewhere classified Infocomm Industry Survey, 2001-18 - IDA Singapore
Appendix B: Key Definitions Infocomm Industry The total infocomm industry revenue does not include sales revenues in the electronics or semiconductor manufacturing sector. Companies covered in this survey are infocomm companies, which are direct suppliers in the development and provision of infocomm products and services. The total infocomm revenue of these companies is broken down into export and domestic revenue. Export revenue refers to sales out of Singapore, whilst domestic revenue refers to sales to the end-users in Singapore, excluding sales to distributors. Segment Segments refer to values that refer to any company s particular activity in this product area and not the actual type of company. Many different types of companies can have activities across different activity areas. For example, a company that is thought of as a hardware company, may also be active in IT services activities in addition to hardware activities. In the survey, the infocomm revenue is segmented into 5 Infocomm segments namely, hardware, telecommunications, software, IT services and on-line digital media. These are areas of activity. So the segment hardware may have contributions from hardware companies plus IT services companies and possibly some others who are active in this spectrum. Hardware Types of hardware under hardware retail segment includes personal computers/laptops, Personal Digital Assistant (PDA), servers and workstations, storage devices, printers, data communications equipment, telecommunication infrastructure equipment and mobile phones/cellphones. Software Types of software include application solutions and development tools and system infrastructure software. IT Services Types of IT services include consulting and implementation services, training and education services, supporting services (such as maintenance) and application services providers services. Telecommunication Services Types of telecommunication services include basic fixed line services, including cable, mobile and wireless services and Internet Access Services and Internet Service Provision. Online Digital Media Types of online digital media revenue include online advertising, revenues from provision of online education, entertainment and gaming. IDA Singapore - 19 - Infocomm Industry Survey, 2001