Johor Attracts Talent Investments Amid Singapore’s Cost of Living Crisis
Recruiters in Southeast Asia are seeing a surge in demand for talent in Malaysia’s border areas with Singapore, such as Johor, seemingly driven, at least in part, by Singapore’s cost of living crisis and restrictions on foreign talent, prompting many companies and individuals to relocate to Malaysia. High living costs in Singapore, including expensive real estate, make Johor an attractive alternative. The imminent establishment of a special economic zone (SEZ) between Johor and Singapore is expected to further enhance Johor's appeal, offering tax incentives and streamlined trade. As the Financial Times reports, this initiative mirrors Shenzhen’s transformation near Hong Kong, which evolved into a significant tech hub. Malaysia envisions Johor playing a similar role in Southeast Asia’s digital economy.
APSCo Asia, based in Singapore, is the trade association for recruitment businesses operating in Southeast Asia and part of APSCo Global, an international organisation with 1500 corporate members across Europe, Asia and Australia ranging from microbusinesses to global names. Members specialise in professional services and STEM, so have been alive to a recent trend for Singapore businesses to look to relocate elsewhere in the region to reduce their operational and labour costs.
Johor's growth gained momentum after Singapore, constrained by limited energy resources, imposed a moratorium on new data centres in 2019. Johor capitalised on this by drastically reducing approval times for new developments, attracting substantial foreign investments. AirTrunk, a data centre operator with facilities across Asia, praised Malaysia for its smooth market entry and plans further expansion in Johor. According to the Financial Times, "foreign investment into the state of 4 million people hit RM58.8bn ($12.6bn) in 2022 and RM31bn in 2023, compared with RM10bn in 2019, according to figures from Malaysian Investment Development Authority". This growth is expected to surpass national forecasts up to 2025. The increased activity has boosted land prices and positioned Malaysia as one of Asia’s fastest-growing data centre markets, with a significant pipeline of development projects.
This shift could alleviate some cost of living pressures in Singapore by providing a nearby, more affordable alternative for businesses and individuals, fostering closer economic ties between the two regions. Singapore needs to be cautious of this trend as its recent attempts to tighten up immigration with the COMPASS regulations, although making the immigration process more transparent, are leading highly technical net-zero global organisations to consider other cheaper locations, with local talent, which may inhibit Singapore’s ambitious development plans.
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