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Singapore’s Economic Development: Economic Development Board
INSEAD Policy Seminar
20 June 2011
710.3 km2, 63 offshore islands
Singapore area is1.05% of Abu Dhabi
New York City 786 km2
Abu Dhabi 67,340 km2
Singapore location: http://www.gov.sg
• Southern tip of Malaysia
• Was in Malaysia 1963-1965
• One-degree north of equator (one-north science parks, like twofour54)
• 710.3 sq km, offshore islands including
–Jurong joined up of 7 islands
–Sentosa for tourism like Saadiyat
5-point introduction
1 Chewing gum story
• Ban 1992, revised 2004 & 2010
• Only therapeutic liquorice-nicotine oral & dental chewing gum
• Singapore “fine” city
• Precision city-state, notoriety price
2 Casinos: Integrated resorts
Marina Bay Resort
Another integrated resort on
3 Water scarcity to 4 national taps
• Imported Malaysian water
• NeWater
• Desalination
• Marina Barrage & reservoirs (two-thirds of total land area as 712.4km2)
10,000 hectares, or one-sixth size of Singapore
4 Land scarcity to Jurong Rock Caverns
• Underground oil storage (60 hectares)
• Subterranean below seabed
• Liquid hydrocarbons, crude, condensate & naphtha
• Safety & security
5 Population policy
• Stop at 2, have 3 or more, if you can afford it
• Fertility rate 1.16% 2011 vs 2.1 replacement
• Singapore residents
• Permanent residents
• P Q R criteria
• Racial equation 77:14:8:1
Basic statistics, 2009 & 2010
Land area (sq km) 710.3 712.4Total population (‘000) 4,987.6 5,076.7Singapore residents (‘000) 3,733.9 3,771.7Population density (per sq km) 7,022 7,126Median age (years) 37 37Literacy rate (%) 96 96Mean years of schooling 9.7 10.1Home ownership (%) 88.8 87.2Doctors per 10,000 population 17 17Crime rate 665 650(per 100,000 population)
Trinity of basic needs
EDB for jobs
CPF for social
security
HDB for housing
Central Provident FundHousing a Healthy,Educated & WealthyNation
Housing &Development Board
Basic statistics, 2009 & 2010
GDP (S$ billion) 266.7 303.7
Per capita gross
national income (S$) 52177 57603
Real GDP growth (%) -0.8 14.5
Productivity growth (%) -3.4 10.7
Inflation rate (%) 0.6 2.8
Source: http://www.singstat.gov
EDB proactive origins 1960
Investment promotion
Industrial financing
Industrial estates
Contrarian to fear colonial imperialism
Not just real estate play
Long gestation for profitability
EDB for jobs
• S$100 million seed capital
• Tasked for job creation
• Population growth
• Postwar baby boom
• Migration from China, India, Malaya
• Unemployment
EDB incentives
• Pioneer status, tax holidays
• Expansion tax incentives
• Export tax incentives
• Accelerated depreciation for technology
• 100% ownership for land & companies
• Joint-government training centres
• Skills Development Fund
EDB industries
Labour-intensive
• Textiles & garments
• Food & beverages
• Printing & publishing
• Other consumer products
High capital, technology
• Basic iron & steel
• Petrochemicals
• Metal, machinery
• Precision equipment
Industrial policy
• Picking winners
• Direct foreign investment DFI
• Multinational corporations MNCs
• Promising local enterprises PLEs
Singapore Inc
Govt linked companies
Promising local companies
SMEs
Government
Statutory boards
EDB spin-off 1968
EDB
Development Bank of
Singapore
Jurong Town Corporation
DBS Group
Next stage of industrialisation
• High value-added
• Skill-, capital-, technology-intensive
• Export-oriented industries (post-1965)
• Petrochemical to specialty chemicals
• Precision to electronics (consumer to industrial semiconductors)
Regionalisation policy
• Second wing• SIJORI: Singapore-Johor-Riau Island (Batam)• Other ASEAN growth triangle• Cross-border production networks• Industrial parks
–Batam– Suzhou–Bangalore–Vietnam
Uniquely Singapore
• Proactive whole-of-government
• Multi-tasking ministers, chairmen, PS21
• Cross-, joint-directorships
• Ministry of Trade & Industry, MTI family
• #1 in World Bank Doing Business
• #1 in World Competitiveness Yearbook until 2011
Jurong Town Corporation
International EnterpriseFormer Trade Development Board
Agency for Science, Technology& Research A*STAR
Singapore ProductivityInnovation & GrowthEnergy Market Authority
Singapore Tourism Board
Vision A Global Leader
A Great CityA Home in Asia
For Business, Innovation and TalentMission: We create for Singapore, sustainable
economic growth with vibrant business and good job opportunities
Values: Care, integrity, team, imagination, courage, excellence and nation
EDB Organisational Structure
EDB now
• EDB Advisory Council
• EDB Investments: EDBI 1991 as equity investment arm in 270 firms in Biomedical Sciences, Clean Technologies, Digital Media, etc
• EDB Alumni
EDB Alumni
• Training ground• Externalising EDB culture• EDB spin-offs• Ex-EDB staff in new entities • International Enterprise (former Trade
Development Board)• Singapore Productivity for Growth &
Innovation (SRING)
Home for Business
• Global business centre
• Sustainable growth
• Business, job opportunities
• Sharpens strategies to position for future
• Value proposition to business is improve bottom line, grow top line in strategic activities
Home for Innovation
• EDB dreams, designs & delivers solutions
• Creative innovations
• Value chain
• Convergence of industries
• Manufacturing-cum-services
Industrial strategy & value chain
R&D Product development
Process engineering
Manufacturing & production
Marketing & distribution
Home for Talent
• Permanent residency
• Vibrant, dynamic lifestyle
• Attract global talents
• Schools (English 1st language)
• Hospitals
• Recreation & entertainment
3 key elements
1. 1-stop agency for foreign investment
2. Grow industry verticals, global leadership, new growth areas
3. Pro-business environment
EDB is compass to future
World•Singapore new growth formula
• Singapore-to-World, World –to-Singapore
• Trust, knowledge, connected & life as strongly competitive
• World-class business environment, viable long-term projects
EDB is compass to future
Future•Singapore• Future in
Singapore, Singapore in future
• New creations, innovations, products, services, technology
Own solutions as business growth in
Urban solutions
LifestyleAgeing,
healthcare & wellness
Today’s partner, tomorrow’s solutions
• Challenges of tomorrow, influence what business needs to do today
• Explore future business trends
• Partners some of world's leading companies finding ingenious solution
• Log on to Future Ready Today to see Who’s Who as partners
• A*STAR 14 biomedical sciences, physical sciences and engineering research institutes
• A*STAR 6 six consortia and centres in Biopolisand Fusionopolis
• A*STAR 3 types of capital, human, intellectual and industrial
• A*Star Graduate Academy
• A*Star Joint Council
• A*STAR: 3 subsidiaries for commercialisation
• one north world-class research hub
• Business shared facilities
• Great place to work, live & play
• Biopolis & Fusionpolis
• Great minds come together to do great science
Biopolis
• Biomedical
• Biotechnology
• Agrobiology
• Engineering
• Universities, technology corridor
• A*Star institutes
Fusionpolis
• Information communication technology
• Media
• Broadcasting
• Solutions for e-business, e-commerce
• Intelligent city
• ONE = One Network for Everyone
• Fibre optics, broadband access
Convergence in value chain
Infrastructure
Service TerminalContent
Enduser
Broadcasting
Telecommunication
IT & other media
Convergence
Convergence mania wirelessly
• Mobility
– Global, 24/7
• Nomadic
– Simple to enabled networks
– Open communication architecture forum
• Sensor
– ICT, telecom
Wireless is now the mainstream for access
• 1983 TDB to International Enterprise
• TDB-IE Society• Exporter Development Programme
(EDP) • Branding• Local Enterprise and Association
Development Programme (LEAD) • SME Market Access Programme
(SME MAP) • International Market Immersion
Programme (iMIP) • Internationalisation Capability
Development Programme (iCDP)
Connectivity
CapitalCompetency
Competitiveness Reports
• WEF since 1979
• Ranks 139 countries
• EDB as partner institute
• IMD WCY
• Ranks 59 countries
• MTI as partner institute
1. Switzerland 5.63 2. Sweden 5.56 3. Singapore 5.48 4. United States 5.43 5. Germany 5.39 6. Japan 5.37 7. Finland 5.37 8. Netherlands 5.33 9. Denmark 5.32 10. Canada 5.30 11. Hong Kong SAR 5.27 12. United Kingdom 5.25 13. Taiwan 5.21 14. Norway 5.14 15. France 5.13
16. Australia 5.11 17. Qatar 5.10 18. Austria 5.09 19. Belgium 5.07 20. Luxembourg 5.05 21. Saudi Arabia 4.95 22. South Korea 4.93 23. New Zealand 4.92 24. Israel 4.91 25. United Arab Emirates 4.89 26. Malaysia 4.88 27. China 4.84 28. Brunei 4.75 29. Ireland 4.74 30. Chile 4.69
• Consistently topped BERI
• Maintains top rank in BERI Labour Force Evaluation Measure
• Quality of Workforce Index
• Global talent policy
Other growth engines
• Financial centre
• Tourism gateway
• Education hub
• Medical services
• Global media city
• Urban Redevelopment
• EnterpriseOne
Why Singapore?
Financial hub by accident?
• Asian dollar market mimicked Euro-dollar
• London Astbury Marsden recruitment firm, 2011 Monster Employment Index for Singapore leads in creating financial jobs next 12 months, overtaking London
• Technocrats in Monetary Authority of Singapore read US Dodd-Frank financial-regulation act, for opportunities to create
Growth prospects
• GDP growth from -0.8% 2009 to 14.5% 2010
• Ministry of Trade & Industry MTI expects GDP growth of 5.0 to 7.0% in 2011
• Quarter1 2011 GDP 8.3% & CPI 4.5%
No paranoia of foreign ownership
• Convinced same in Batam Industrial Park
• Migrant society, Permanent Resident
• Qatari Diar bought Raffles Hotel from Kingdom Holding, Prince Alwaleed
bin Talal bin Abdulaziz Al Saud
• Chartered Semiconductors Industries now Globalfoundries
Whither KBE Singapore?• Small, open city-state, big problems
• Physical vulnerability
• Limits to growth
• Plan or proactive to scenarios, future
• Neighbourhood contagion, global crisis
• Economism first & last
• Government-knows-best, private sector-knows more
• Regulator to facilitator