Singapore Fundamentals and the Role of the Economic Development Board (EDB) in Making Singapore one of the most Advanced Economies in the world

Transcription

1 Singapore Fundamentals and the Role of the Economic Development Board (EDB) in Making Singapore one of the most Advanced Economies in the world Source: Presented by: Enrique R. Suarez

2 THE BUILDING BLOCKS Singapore stands firmly on a solid foundation built out of trust, knowledge, being connected and life; compelling attributes that come together to form a conducive environment for companies eyeing a move to expand into the region with Singapore as its base. 2

3 TRUST Businesses looking to set up in Singapore can expect integrity, adaptability and respect for intellectual capital to be emphasized upon by a strategic-minded administration, which is attuned to the needs of companies to protect invention and innovation. 3

4 Singapore is attuned to the needs of businesses and the need to protect invention and innovation Singapore is known for integrity, quality, reliability, productivity, rule of law, and enforcement of intellectual property rights. These assets are essential in the knowledge economy. Singapore keeps its tax rates and tax laws competitive and takes a strategic, holistic approach towards stewardship of key pillars of the economy, such as petrochemicals, electronics, and clean energy. Most recently, it has mounted an initiative called Future Singapore. This is designed to develop and test bed new ideas and solutions in the areas of urban living, wellness, ageing and healthcare, and lifestyle products and services. 4

5 Robust Intellectual Property (IP) Regime As a preferred location for innovation, Singapore has nurtured a robust intellectual property (IP) regime. The country has placed a great deal of commitment into developing a strong domestic regulatory framework to protect IP rights. It is currently rated the best place in Asia and 7th in the world for IP rights protection in the IMD World Competitiveness Report Similarly, the World Economic Forum s Global Competitiveness Report ranks the island as having the best IP protection in Asia, and the second best in the world. 5

6 WIPO Indeed, a consistently reliable IP environment was what spurred the World Intellectual Property Office (WIPO) in 2009 to set up its first Asian regional office here. And because of its pro-ip stance, more than 30 leading biomedical sciences companies have established regional headquarters here as well. 6

7 Government Policies The government has always adopted a pro-business policy, regardless of world economic situations or crisis. It has taken tough measures including reducing corporate tax rates, lowering employers Central Provident Fund (CPF) contribution rates and capping office rental rates. For the quality of its government policies, Singapore has been rated The world s easiest place to do business (Doing Business 2012 Report, World Bank) 7

8 KNOWLEDGE Besides the multi-cultural nature of Singapore s workforce and ability to attract global talent, the city is paving the way to become a global knowledge capital that will drive its leadership position in key knowledgeintensive industries. 8

9 The world s top labor force sustains Singapore s leadership position in key knowledge-intensive industries The multi-cultural Singaporean workforce is highly educated, highly motivated and highly productive. It is also proficient in English the language of international business. Singapore has a large base of engineering talent, with the number of engineers in universities and polytechnics expanding steadily each year, in addition to the sizeable pool of skilled technicians. An open immigration policy has served to enhance Singapore s talent pool. This gives companies the opportunity to source for the best personnel from anywhere in the world. 9

10 Continue In addition, a vast array of training and scholarship programs are frequently developed by the government in tandem with industry partners and educational establishments. Such initiatives ensure that the workforce is future-ready. All this has helped produce a labor force that is ranked No.1 in the world over the last 30 years. (Business Environment Risk Intelligence's 2008 Labor Force Evaluation Measure report). 10

11 A*STAR Rapid business innovation requires world-class R&D facilities and expertise. The Agency for Science, Technology and Research (A*STAR) ensures that Singapore has both in ample supply. With twelve research centers dedicated to a multitude of technological disciplines, Singapore attracts a world class community of researchers and specialists from the US, Europe and Asia Pacific region. 11

12 The Public and Private Sector In the last decade, Singapore has successfully grown its R&D base, drawn top scientific and creative talent and nurtured R&D collaborations between the public sector and private enterprise. Today, Singapore holds global leadership positions in areas of manufacturing such as electronics and petrochemicals. The city-state remains an attractive base for complex manufacturing activities, in tandem with its move towards a more knowledge-centric and researchbased economy. 12

13 Innovation and Capital-intensive Activities This emphasis on innovation and capital-intensive activities and a globalized workforce has shaped Singapore into a city-state where Chinese and Indian companies can internationalize, where American and European companies make their entry into Asia, and where views on the future of this dynamic and fastevolving region can be forged. 13

14 CONNECTED As the global transportation hub with the most extensive and comprehensive network of trade agreements in Asia, Singapore s unparalleled connectivity and infrastructure paves the way for better market access and trade flows from local and international companies alike. 14

15 Global Transportation Hub Singapore has built on its advantageous geographical location to become one of the world s top transportation hubs for sea and air cargo. Singapore s container ports are the busiest in the world. They offer a choice of 200 shipping lines with links to some 600 ports in 123 countries. Changi International Airport is linked to some 200 cities in 60 countries, with about 5,400 weekly flights, providing convenience and effective connectivity for passengers and cargo. The Changi Airfreight Centre is a 24-hour, one-stop hub for the storing, moving and repackaging of goods without the need for documentation and custom duties. This has drawn some 6,000 logistics providers to Singapore, including 21 of the world's top 25 third-party logistics providers. 15

16 Continue Getting around the island is effortless with the highly-efficient Mass Rapid Transit system, and bus and taxi services. On the infocoms front, the country s broadband network reaches 99 per cent of the population. International and regional connectivity now stands at 27.6 Tbps to more than 100 countries. Companies here have the necessary land, air, sea, and telecommunications linkages necessary to move freight and services anywhere in the world, whenever they are needed. 16

17 Free Trade Agreements Singapore s extensive trade links provide companies with greater market connectivity through the reduction of tariff and non-tariff barriers. The Republic currently has the most extensive network of free trade agreements (FTAs) in Asia. Agreements have been signed with key economies such as US, Japan, Australia, New Zealand, members of the European Free Trade Association, Jordan, China, Chile, South Korea, India and Panama. Negotiations are in progress for FTAs with Middle East and South Asian economies. On top of this, Singapore has signed 35 investment guarantee agreements (IGAs), designed to help protect investments made by Singapore-based companies in other countries against non-commercial risks. 17

18 LIFE While economic considerations and political stability are key factors for businesses to take note of when considering a base of operations, quality of life for employees are also just as important. Singapore offers the best quality of life in Asia and is one of the most suitable places in the world to live in. 18

19 Asia s Best Location to Work, Live and Play Singapore is a cosmopolitan country at the crossroads of Asia where people from the region feel right at home and those from beyond feel welcome. In fact, one in three persons here comes from abroad, constantly adding to the nation's unique heritage blend. Today, the population is a rich mix of different cultures, lifestyles and religions co-existing harmoniously. 19

20 Mercer's Quality of Living Survey Being a consistent top performer in Mercer's Quality of Living surveys over the years, and the top-ranked Asian city in the 2011 survey, Singapore has taken the work-live-play approach very much to heart. The city-state is safe and orderly. Recognized as one of the cleanest and greenest cities in the world, its public transport system and healthcare services are world-class. This provides a dynamic business environment, providing plenty of work opportunities locally and overseas. 20

21 Education, Arts and Culture In fact, there are numerous schools catering to the education needs of expatriate children while its local schooling system has achieved academic distinction. It s one of the push factors that make Singapore a great place to raise a family. Most importantly, the "play" aspect is not forgotten in the Republic. The arts and culture scene is thriving and growing. From a host of acclaimed museums, such as the Art Science Museum located at the luxurious Marina Bay district and countless theatre and musical productions at world-class venues like The Esplanade Theatres on the Bay. 21

22 Dining and Entertainment Singapore is also a gastronomic draw, with a lively dining and entertainment scene that offers some of the best cuisine in Asia, as well as unique street food. The warm, sunny weather makes all-year-round water and outdoor sports possible. There are a wide variety of welltended green spaces and exercise facilities such as the East Coast Park and the Botanical Gardens for relaxation and fun. Singapore is also cultivating resources into state-of-the-art sporting facilities such as the Sports Hub in Kallang, which will be ready in

23 Singapore s History: Stages of Economic Development The emergence of Singapore as the heart of Asia s economy has come with many challenges. From its days as a small and underdeveloped nation, Singapore has emerged from the tumultuous financial, social and political changes over the years to transform into the first-world metropolis that it is today. 23

24 THE SIXTIES As a newly independent country in 1965 with no natural resources, Singapore as an infant nation faced much uncertainty. Unemployment was one of the key issues that needed to be resolved quickly in order to get the wheels of the Singapore economy moving. 24

25 Continue With a GNP per capita of less than US$320, Singapore was a third-world nation with poor infrastructure and limited capital. Low-end commerce was the mainstay of the economy and the handful of industries that existed produced only for domestic consumption, leaving no room for direct foreign investment. 25

26 The Birth of the Economic Development Board (EDB) To create job opportunities following the massive unemployment and labor unrest, an environment conducive to industrial development had to be formed, thus leading to the birth of the Jurong Industrial Estate the first of many such estates on the island. It was during this exciting period of growth that the Singapore Economic Development Board (EDB) was established with a budget of $100 million to take on the challenge of convincing foreign investors that the country was a good place for business. 26

27 Continue These two developments marked the start of Singapore s industrialization programs that began with factories producing garments, textiles, toys, wood products and hair wigs. Along with these labor-intensive industries were capital and technology-intensive projects from companies such as Shell Eastern Petroleum and the National Iron and Steel Mills. 27

28 Continue The success of this program over time meant new issues had to be tackled, namely the lack of raw resources that once came from Malaysia and rapidly growing local demand. Singapore s solution then was to develop its export-oriented industries, as EDB opened its first overseas centers in Hong Kong and New York to be better placed to attract foreign investors. 28

29 THE SEVENTIES Having built up a solid manufacturing base, Singapore focused on further enhancing its business resources. Factories were built, skilled manpower was developed and industries were diversified. As a result, the country remained unaffected in a subsequent global recession. 29

30 THE SEVENTIES By this decade, industrial development was surging ahead as EDB marketed Singapore to be a quick operations start-up location where factories were built in advance of demand and a highly skilled workforce was readily available. 30

31 THE SEVENTIES Manufacturing evolved to become more sophisticated and included computer parts, peripherals, software packages and silicon wafers. This in turn led to new investments particularly in the electronics sector and product diversification, which greatly enhanced export performance in spite of a global recession. MNCs began R&D activities in Singapore as an extension of their already successful manufacturing operations; demonstrating their long-term confidence. 31

32 The Start of Singapore s Electronics Industry To push Singapore s agenda as a business hub, more EDB offices were set up in Europe, USA and Asia. During this period, Texas Instruments rolled out a production line in just 50 days after committing $6 million to make semiconductors and integrated circuits for export to world markets. This major investment, which EDB secured in under six months, heralded the start of Singapore s electronics industry. 32

33 Apprenticeship Programs To balance the opening of new EDB overseas centers in Zurich, Paris, Osaka and Houston between 1971 and 1976, a Manpower and Training Unit was established locally to focus on industrial training. The Overseas Training Program and Joint Government Training Centers with Tata of India, Philips of Holland and Rollei of Germany were also drawn up to place young Singaporean workers in apprenticeship programs for the exchange of knowledge and skills. 33

34 Manufacturing vs. Trade This unique partnership approach to workforce training was the first of its kind and a significant step forward in Singapore s investment promotion program. Although the world recession in 1975 slowed progress slightly, the city s economy remained agile and flexible as EDB pushed for more industrial projects and manufacturing eventually became the largest sector in the economy surpassing trade. 34

35 THE EIGHTIES The Second Industrial Revolution signaled the growth of knowledgeintensive activities such as R&D, engineering design and computer software services. Sunrise industries were identified, workers received high-tech training, and Southeast Asia s first silicon wafer manufacturing plant was built. 35

36 THE EIGHTIES The 1980s saw EDB co-establishing institutions of technology with Japan, Germany and France to meet the specialized manpower needs of high-technology industries. Coupled with the Skills Development Fund, these places of learning provided Singaporeans with the right kind of training for specialized jobs in the electronics and engineering sectors. 36

37 The Robot Leasing Scheme At the same time, the Science Park was set up next to the National University of Singapore to stimulate R&D activities by the private sector while the Robot Leasing Scheme was established to offer low-cost financing and technical consultancy to manufacturers who wanted to automate their operations. 37

38 High-wage Policy Eventually, due to the government s adoption of a high-wage policy to accelerate the move away from labor-intensive industries and the attraction to high-technology industries, wage bills swelled as the world slipped into an economic slowdown and Singapore slid into a recession. 38

39 Flexi-wage System An Economic Committee, led by then Minister for Trade and Industry Mr. Lee Hsien Loong, then took a long hard look at what was needed to restore Singapore s competitiveness consequently recommending the introduction of a flexi-wage system where pay hikes would be relative to a company s profitability. Another call the Committee made was for EDB to promote all aspects of economic activity. 39

40 Total Business Center With the new goal of positioning Singapore as a Total Business Center, EDB set out to attract international service corporations in the financial, educational, lifestyle, medical, IT and software sectors; identifying PC, printed circuit board and disc drive manufacture as important sunrise industries. 40

41 Small Enterprise Bureau By working hard to attract investors to these areas, Singapore s and Southeast Asia s first silicon wafer manufacture plant opened in the early 1980s, followed by Apple Computer s in 1981 and one for disc drives in As the promotion of local enterprises also became increasingly important, EDB then set up the Small Enterprise Bureau in 1986 to shape a range of assistance schemes that helped facilitate the growth of these companies 41

42 THE NINETIES The services industry flourished to form one of the pillars of Singapore s economy, along with the field of biomedical sciences and emerging key industries. This resulted in a diversification of the city s economic structure, with Singapore hosting a wide range of businesses. 42

43 THE NINETIES The 1990s saw companies moving up the value chain and intensifying their use of technology while the service sector became the engine for growth. EDB shifted its focus from manufacturing to strengthen the new key industries, namely chemicals, electronics and engineering. It also began leveraging its leadership in these industries to develop biomedical sciences; an area that included the pharmaceutical biotechnology and medical technology sectors. 43

44 Hub of Skilled Manpower This helped Singapore s economic structure become more diversified and balanced, resulting in the city hosting a wide range of businesses particularly in higher value-added activities. It also started welcoming talent from around the world to augment the local skill pool and subsequently, become a hub of skilled manpower and headquarters for decisionmaking. 44

45 THE MILLENNIUM At the turn of the century, Singapore increased its focus on knowledge and innovation-intensive activities while R&D became the cornerstone of the country s economic development. 45

46 THE MILLENNIUM In 2006, the government set aside more than $13 billion to promote R&D over the next five years as part of its goal to increase gross expenditure on R&D (GERD) from 2.25 per cent to 3 per cent of gross domestic product (GDP) within that period. 46

47 The National Research Foundation The National Research Foundation was set up in the same year to develop, coordinate and implement national research and innovation strategies under the national R&D agenda. To date, most of the R&D activity has been focused on environmental and water technology, biomedical sciences and interactive and digital media. 47

48 Intellectual Property (IP) To further facilitate Singapore becoming an information-led economy, a strong Intellectual Property (IP) protection and enforcement environment was put in place - resulting in the city s ranking as the first in Asia for IP protection today. 48

49 Continue Based on this foundation built over the years, Singapore has put in place a strong and established network of public and private sector R&D centers which currently work closely together with companies to commercialize new technologies, processes and products. 49

50 FROM HOST TO HOME EDB s Strategy Manufacturing, services and R&D have long been Singapore s focal point in economic development. With its Host to Home strategy, EDB aims to move Singapore from being a host to companies to become a home where business, innovation and talent are nurtured. 50

51 HOME FOR BUSINESS Businesses headed to Asia will do well to tap on Singapore s prime geographic location in the heart of the region, global connectivity and business-friendly policies-which have made the country the No.1 choice for the world s top global companies in the industrial good and services sector, and among the top five for media and financial services. 51

52 Home for Business is about deeply rooting companies in Singapore and being their home away from home Asia s growth story be it China, India or ASEAN will increasingly shape global trade and investment flows. As manufacturing and service capacity shifts to Asia, coupled with the influx of engineering talent, companies increasingly turn their focus to Asia. Singapore can then be the ideal location for companies to locate some of their key decision makers to feel the pulse, spot opportunities and leverage the network of relationships in the region. Companies find in Singapore a stable and trusted base where they can exploit their knowledge and IP assets, undertake key activities which give them a competitive advantage, as well as drive their growth from Asia. 52

53 Continue At the same time, Singapore s global connectivity as well as the marketplace of thought and perspective it offers makes it an ideal neutral base from which Asian companies can expand their presence worldwide. 53

54 HOME FOR INNOVATION Modern-day challenges in a rapidly-changing world require innovative solutions. By fostering a favorable climate for public and private sectors to engage in R&D collaborations, Singapore is set on becoming a hub where tomorrow s leading edge solutions are created. 54

55 Continue Home for Innovation is about leveraging Singapore s strengths in systems integration and shifting the focus from sourcing solutions to co-creating solutions with industry partners. 55

56 Living Laboratory The global trends of urbanization, ageing and rising affluence are creating demand for new products and services solutions which Singapore itself needs. Working together with partners from both the private and public sectors, companies can tap on Singapore as a living laboratory to collaboratively conceptualize, co-create and test-bed new solutions for commercialization in Asia and globally. In the process, the people of Singapore will enjoy greater quality of life with easy access to tomorrow s leading edge solutions today. 56

57 Company Collaboration The collaboration between PUB Singapore s national water agency and Toray Industries, Inc. is one of the first fruits of this initiative. The collaboration will see the two parties working to develop water treatment-related technologies and products that will help in coping with the anticipated global water shortage. 57

58 Continue In addition, Changi General Hospital has partnered Intel to test-bed the Mobile Clinical Assistant, a lightweight mobile device that provides information on patients conditions and test results to caregivers who are on the move. 58

59 HOME FOR TALENT With Asia emerging as the new center of global transformation, companies are looking east to expand their businesses. To answer the region s growing need for top talents and capable leaders, Singapore-one of the world s most livable cities-is building an ecosystem of educational institutes, corporate universities and government-run programs. 59

60 Continue Home for Talent is about positioning the country as a hub where talent is harnessed and developed to drive business and innovation in Asia. Already a city with one of the highest quality of living standards in the world 1, Singapore continues to step up efforts to attract, develop and retain talent. 60

61 Talent Strategy A key initiative to supporting the Home for Talent strategy is the Leadership Initiatives, Networks and Knowledge (LINK) talent and leadership ecosystem. Through LINK, Singapore aims to bring together the supply and demand for talent development needs. Supply-side players include leading business schools and professional services firms while demand-side players include corporate universities and talent control towers -strategic human capital functions - of sophisticated companies which are at the forefront of HR practices looking to better manage and develop their talent so as to drive business growth in Asia. 61

62 The Human Capital Leadership Institute Anchoring the ecosystem is the Human Capital Leadership Institute, a national center of excellence as well as an integrator across the LINK ecosystem by bringing together best-inclass thought leadership, faculty and insights on successfully doing business in Asia and the associated implications for leadership and human capital strategies. 62

63 The Education Hub Singapore is certainly shaping up to be the education hub of the region. Singapore s own autonomous Universities boast of strong business schools and leading institutions such as INSEAD and ESSEC have chosen Singapore as its base in Asia. With Singapore s growing talent ecosystem, companies such as Sony and Unilever have set up talent and leadership development centers in Singapore. Unilever s Four Acres Singapore, the consumer goods giant s first corporate university out of London and its first in Asia, will run half of Unilever s global leadership development curriculum. With Singapore as its base, Unilever s Four Acres Singapore will attract and groom future leaders to grow its business in desired markets. 63

64 Continue The fast-growing vibrancy of the talent space in Singapore, together with a safe and cosmopolitan environment, entrenches Singapore as an ideal location for companies to attract, develop and harness talent in Asia, for a Globalized Asia. Mercer s 2014 Worldwide Quality of Living Survey ranks Singapore as 25th in the world and top in Asia. 64