Prime Minister Lawrence Wong has announced plans to make big investments in key strategic areas like decarbonisation solutions and quantum technology during his Budget 2026 speech on Feb. 12.
Calling these “frontier technologies”, he plans to invest $37 billion in these clusters under the Research, Innovation, and Enterprise, also known as the RIE2030 plan, citing the need for Singapore to be recognised as “a place where frontier technologies are developed, tested, and commercialised”.
The $37 billion figure is approximately 1% of Singapore’s annual GDP, a reflection of Singapore’s “sustained commitment to research and innovation”. This is also a 32 per cent increase from the $28 billion figure for the Research, Innovation and Enterprise 2025 plan, and marks the biggest investment the government has made for such plans since 1991.
The objective is to anchor critical segments of global value chains here in Singapore, especially activities with high knowledge content and strong spillovers, he noted. Beyond hosting such activities, Singapore also aims to shape how these industries develop and where they create value.
He explained how Singapore began investing in the semiconductor industry more than two decades ago, with frontier technologies being researched and developed in Singapore. As a result, major semiconductor companies have invested heavily in Singapore, not just in manufacturing, but also in R&D, innovation and supply chain partnerships.
Quantum Technology
Singapore made an “early and deliberate bet” on quantum technology in 2007 by establishing the Centre for Quantum Technologies at the National University of Singapore.
“Much of quantum research then was still theoretical. But we invested patiently in building foundational capabilities, believing that these would one day translate into transformative applications,” said PM Wong.
Today, quantum computing has advanced rapidly to practical applications, with far-reaching implications across many fields, he explained. Major technology players are investing heavily in capabilities to build commercial-scale quantum computers.
With Singapore’s continued investment in quantum technology, it has attracted the likes of Quantinuum, one of the world’s leading quantum computer companies, to establish operations here and will be hosting its latest quantum computer in Singapore, making Singapore the first country to host this system outside of America.
“This will give our researchers and companies, including a few home-grown startups, direct access to cutting-edge quantum compute and opportunities to work on meaningful projects,” explained PM Wong.
In attracting top global talent, he also cited the example of Nobel Laureate Professor John Martinis, a pioneer in superconducting systems, who co-founded a quantum computing startup that is collaborating with researchers at A*STAR and the National University of Singapore.
The startup is developing novel components to advance the performance of quantum computers by using state-of-the-art semiconductor processes.
“They chose Singapore because of the unique combination of our strengths — in advanced manufacturing, semiconductors, and frontier quantum research,” said PM Wong.
“These examples show how we can build leadership in key growth areas, and shape where innovation and value creation take place. In doing so, we strengthen Singapore’s strategic resilience and relevance, while creating more jobs and better opportunities for Singaporeans.”
Decarbonisation
PM Wong also said that Singapore will continue to do its part to address climate risks, despite other governments scaling back on their climate ambitions. This is to secure longer term resilience and competitiveness.
A huge part of its decarbonisation strategy is the carbon tax, which sends a clear price signal to businesses to encourage a reduction in emissions. “This is already having an impact. Firms are investing more in low-carbon solutions, and improving energy efficiency,” said PM Wong.
He noted that the carbon tax has also been raised to $45 per tonne for 2026, and the plan is to reach $50 to $80 per tonne by 2030.
For businesses, the Energy Efficiency Grant and support for green loans under the Enterprise Financing Scheme will be extended, to help firms invest in energy-efficient and sustainable solutions. In particular, the Energy Efficiency Grant will be extended for one year from 1 Apr 2026 to 31 Mar 2027.
PM Wong noted that Singapore is actively pursuing innovation in diversifying the energy mix, through hydrogen, geothermal energy, or civilian nuclear power. Singapore has been building up capabilities in nuclear energy to assess its safety and viability, initiating cooperation with the likes of the US and France.
Additionally, Singapore is also advancing plans to import low-carbon electricity from the region to help reduce its carbon footprint and strengthen energy resilience.
However, PM Wong noted Singapore’s size and lack of resources amid the ever-changing global landscape, as “our actions alone cannot determine global outcomes”, although Singapore will continue to contribute responsibly to climate action.
Beyond 2027, the government plans to assess the carbon tax trajectory carefully in light of international developments, noting that Singapore already has the highest carbon tax rate in Asia. “If global climate momentum continues to weaken, we may need to position ourselves towards the lower end of the $50 to $80 per tonne range by 2030,” noted PM Wong.
“Looking further ahead, our path to net zero will depend heavily on technological breakthroughs and sustained international cooperation. Without these, it will be increasingly difficult for a small, resource-constrained country like Singapore to move further on our own,” said PM Wong, noting that the progress of Singapore’s transition towards net zero will be uneven.
