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Ethos Issue 6, Jul 2009
Staying Ahead of the Game
Bernard Nee and Julia Yap
TEST (IDEAS)
Businesses are profit-driven and decide
on investments that make sense for them
in the long run. Even if the Government
decides to explore a new growth area,
the initiative can only succeed if it
passes the rigor of the marketplace.
Firms must decide that Singapore’s value
proposition makes commercial sense for
them before they locate here.
Manufacturing, for example, continues
to make up a significant share of
Singapore’s GDP (approximately 25%)
as firms find that it continues to make good financial sense for them to be
here. Competition in manufacturing
has evolved from one concentrated
around production factors to one that
encompasses entire supply chains.
Companies such as the Renewable Energy
Corporation have chosen Singapore to
locate their new worldscale integrated
solar manufacturing complex, citing
access to technology centres and
research programmes, as well as market
access as key reasons for doing so.
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"Companies are very rational.
The critical thing is whether
their Singapore plant is the most
productive in the world or not.
If it is, they keep the plant.
If not, they close it down." |
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Our investment incentives are
structured to build local capabilities,
and to encourage firms to continue
reinvesting and expanding for the long
term. They are not used to subsidise
the continued operation of otherwise
non-viable ventures in Singapore. This
discipline extends to all aspects of
Singapore’s economic strategy.
ACT (TO SEIZE OPPORTUNITIES)
Singapore’s economy is small and
dependent on external markets and
international capital. It is therefore
imperative that we differentiate
ourselves in the global marketplace,
build relevant capacities, and be
in a position to act decisively when
opportunities arise.
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"We have to be at the forefront
of this game. If we are not,
someone else will." |
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Today, Singapore has built up a
strong track record of being able to
offer businesses a unique proposition
based on four key strengths which we
refer to as TKCL: "Trust", "Knowledge",
"Connected" and "Life".1
With a world-class talent pool, strong
infrastructure, and business-friendly
regulatory environment, Singapore is
one of the few places in the world where
design, research and development,
manufacturing, brand development
and corporate headquarter activities
can co-locate, complement each other,
and thrive.
Building on Singapore’s strengths
and recognising that Asia is the next
growth story, EDB and its partner
agencies are actively refreshing
our economic development strategy,
positioning our city-state as a home for
business, innovation and talent, and
strengthening Singapore’s brand for
business. We believe that Singapore is well positioned to capitalise on
opportunities arising from the
region’s growth. Asian markets are
not homogenous and, as such, foreign
companies hoping to break into these
markets will need a better understanding
of them to succeed. Singapore, with
its attributes of TKCL and a host of
supporting and complementary industries
across the entire value chain, is an
attractive home in Asia for companies
seeking to expand their operations in
the region.
SINGAPORE’S ECONOMIC ECOSYSTEM
The process of Listening, Testing,
and Acting, means that economic
policymakers are in tune with the
changing needs and aspirations of
companies as well as its people. The
economic landscape we have today is
a result of market forces; it is not one
shaped by an economic ideology that
picks favourites based, for instance, on
national affiliation. Indeed, given the
realities of globalisation, the debate over
whether a company is foreign or local
has become moot.
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