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Singapore Management University

Institutional Knowledge at Singapore Management University

Research Collection Lee Kong Chian School Of Lee Kong Chian School of Business
Business

2000

Entrepreneurial Infrastructure in Singapore: Developing a Model


and Mapping Participation
Teck Meng Tan
Singapore Management University, tmtan@smu.edu.sg

Wee Liang TAN


Singapore Management University, wltan@smu.edu.sg

John E. Young

Follow this and additional works at: https://ink.library.smu.edu.sg/lkcsb_research

Part of the Entrepreneurial and Small Business Operations Commons

Citation
Tan, Teck Meng; TAN, Wee Liang; and Young, John E.. Entrepreneurial Infrastructure in Singapore:
Developing a Model and Mapping Participation. (2000). Journal of Entrepreneurship. 9, (1), 1-33.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/1382

This Journal Article is brought to you for free and open access by the Lee Kong Chian School of Business at
Institutional Knowledge at Singapore Management University. It has been accepted for inclusion in Research
Collection Lee Kong Chian School Of Business by an authorized administrator of Institutional Knowledge at
Singapore Management University. For more information, please email cherylds@smu.edu.sg.
Entrepreneurial Infrastructure
in Singapore: Developing
a Model and Mapping

Participation
TECK-MENG TAN
WEE-LIANG TAN
JOHN E. YOUNG

Entrepreneurial infrastructure, as the term is used in this article, represents the


facilities and services present within a given geographic area which encourage
the birth of new ventures and the growth and development of small- and medium-
sized enterprises. The model of entrepreneurial infrastructure developed here and
applied to the nation of Singapore suggests that they provide support to poten-
tial new business owners, owners of small growing businesses, and existing small-
and medium-sized enterprises by way of assisting them with tasks, physical and
monetary resources, information and knowledge. This article also develops a map-
ping function to predict the likelihood of participation in the entrepreneurial in-
frastructure with the help of interviews with representatives of twelve small- and
medium-sized enterprises.

Teck-Meng Tan is Professor and Deputy President, and Wee-liang Tan is


Associate Professor at the Singapore Management University. John E. Young
is at the Anderson School of Management University of New Mexico.

Over the years, researchers have sought to explain why some discrete
geographic areas produce greater degrees of economic activity in com-
parison to others.’ For instance, Aydalot used the term ’milieu’ to describe
spatial differences in economic activity in French territories.’ Maillat
referred to a milieu as a spatial set which has a territorial dimension but
no predetermined borders.’ He refined the milieu concept to describe
territorial dynamics that stimulate local initiatives which in turn help to
generate new businesses and develop existing enterprises. Similarly,
Maillat and Perrin investigated the economic, socio-cultural, political and
institutional agents and elements that characterise areas prone to fast rates
of business and entrepreneurial (new business creation) development.’
2

Local economic development is generally used to describe the stimu-


lation of economic growth and activity within a smaller geographic area.
This term is generally defined within the specific territorial context within
which it arises.’ Bingham and Mier defined local economic development
as development from within a specific geographic area intended to reduce

dependence on non-local corporations and to broaden the benefits of devel-


opment to more groups within a locality.6 Smilor, Gibson and Kozmetsky
suggested a unique variation of local economic development when they
envisioned the technopolis.’ The technopolis according to these authors
represented a new city-state, located in a unique spatial setting, where
links between technology, technology commercialisation, public and pri-
vate sectors take place to spur economic development and promote tech-
nology diversification. The creation of new businesses is a critical activity
in a robust technopolis. Entrepreneurship and the growth and develop-
ment of small- and medium-sized enterprises (SMEs) have been sug-
gested as having a direct and dramatic impact on the economic quality of
life within discrete geographic areas.88
In order for entrepreneurship to flourish within a given area, the condi-
tions within such an environment must be conducive for the birth9 and
development of growing businesses.’° For instance, Bearse investigated
differences in the probability for successfully starting a business within a
selected geographic region.&dquo; Pennings examined smaller geographic units,
metropolitan areas, in an attempt to determine factors which may account
for higher levels of business birth rates and new business vigour among
various urban settings.’2 Bruno and Tyebjee listed fourteen factors which
they felt favourably influenced an environment for entrepreneurship.’3
They suggested that a munificent environment&dquo; for entrepreneurship in-
cludes both the resources necessary for starting a business and factors
which favourably affect the cost of doing business.
, One conceptual element that is considered a major factor in stimulating
new business creation and SME growth and development in regional and

local environments is the entrepreneurial infrastructure. Surprisingly,


however, this concept has not specifically received extensive theoretical
or empirical attention. Similarly, the decision-making process for par-

ticipating in infrastructure support networks has not been investigated.


This study fills a void in existing literature on entrepreneurship and aims
to establish a new perspective for thinking about infrastructure.
The purpose of this research is to (a) develop a general model for entre-
preneurial infrastructure, (b) apply the concept in a specific spatial setting,
/3

namely, the nation of Singapore, and (c) understand and describe the
decision-making process of SMEs that choose to utilise resources in the
Singapore infrastructure network. The general research questions and
related sub-questions pursued in the study are:

l. What is an entrepreneurial infrastructure?


(a) What are the components of an infrastructure support network?
(b) Is the general infrastructure model applicable in a specific
spatial context?
2. What variables are considered by SMEs for participating in infra-
structure networks?
(a) Is the general decision model applicable in a specific spatial
context?
(b) Are certain decision variables more important than others when
firms consider participating in the support network?

Entrepreneurial Infrastructure

In order to properly understand the notion of entrepreneurial infrastruc-


ture in general, it will first be helpful to re-examine the more generic
concept of infrastructure. According to Lemer, the term ‘infrastructure’
was coined in the first half of the 20th century in reference to military
installations. ‘5 The expression received its most recent surge in popular-
ity in the international press during the 1980s, when concerns mounted
that the infrastructures in several industrial nations, including the US,
were in danger.’6 Infrastructure is most commonly used to refer to all of

the capital stock that is the responsibility of governments. 17 Thus defined,


infrastructure includes the basic installations and facilities that are re-

quired to operate a nation’s, region’s, or locality’s industry.


By definition, the notion of infrastructures is place-specific, represent-
ing conditions as they exist within a specific geographic arena. 18 In a broader
sense, many of the facilities included in the infrastructure concept are
built and operated by governments, and fall within the category of public
works. Other facilities, however, are built or operated, in whole or in
part, by private enterprises. But infrastructure is more than physical facili-
ties. It also represents a stream of services provided by these facilities.
The notion of entrepreneurial infrastructure mirrors the more general in-
dustrial infrastructure concept.
4/

While industrial infrastructure refers to the place-specific notion of


facilities and services underpinning all of the industry and populations
residing within a given location,’9 ’entrepreneurial infrastructure’, as used
by the authors, refers to a sub-set of the more general industrial infra-
structure concept. Thus, entrepreneurial infrastructure represents the facili-
ties and services present within a given geographic area which encourage
the birth of new ventures and the growth and development of SMES.
Although the importance of the entrepreneurial infrastructure concept
seems readily apparent for promoting business creation and development,
there has been a dearth of research and analysis regarding the topic. One
significant exception to this lack of systematic analysis is the work of
Van de Ven.2° Van de Ven maintained that infrastructures include: (a) the
development of resource endowments for basic knowledge, (b) financing
mechanisms, (c) competent labour, and (d) an industrial governance struc-
ture which legitimises, regulates and standardises the activities of indus-
try members. Another explicit reference to the ’new venture infrastructure’
concept was made by McMullan and Long.2’ They considered the com-
ponents of a ’new venture infrastructure’ to be entrepreneurship educa-
tion, incubators and venture capital. Further, they believed that the
mutuality of interest of the components should outweigh potential con-
flicts represented by any overlap of their responsibilities.22
In this article, entrepreneurial infrastructure describes the intersection
among facilities, the services or activities provided by such facilities and
the entrepreneur. Infrastructures provide support systems and networks
to new business owners, owners of small, growing businesses, and exist-
ing SMEs, in the form of (a) assistance with tasks which the business
owner or small firm must accomplish, (b) resources-physical or mon-

etary, (c) information and (c~ knowledge.


Limited amounts of time23 and resources24 are primary reasons why
entrepreneurs seek assistance from outside their businesses. Smallbone,
North and Leigh defined ’external assistance’ as that which is received
from individuals or organisations outside the firm.&dquo; Such assistance may
relate to either specific business problems or development of business.
Entrepreneurs and small businesses form relationships with organisations
within the infrastructure when they perceive they will benefit from the
services provided by such organisations. 16
Generally speaking, support systems and networks comprising an in-
frastructure involve organised systems of relationships between entre-
preneurs and the outside world, and these relationships are particularly
valuable to the small business sector.27 Each set of relationships between
/5

business and infrastructure is unique and is determined by the former.28


Szarka suggested that the infrastructure provides benefits from the entre-
preneur’s communication network,19 which he describes as the collection
of organisations with which the entrepreneur or firm has non-trading links,
but, informs business activities. Assistance in the early stages of business
development and after establishment would allow an infrastructure to
become part of the entrepreneur’s business and strategic networks.3o
The notion of assisting the small business sector with a network of
support organisations is well-established in a majority of European coun-
tries&dquo; as well as in the US.32 Facilities
comprising entrepreneurial infra-
structures can be either publicly privately owned.33 Infrastructures are
or
for
important community economic growth and development because, as
a result of joint decision-making and leadership, communities can influence
the level of entrepreneurship activity within their domains by influencing
elements within the infrastructure.34 In the following sections, each of the
four elements of support suggested as comprising an infrastructure is
described in detail.

Support Elements of Entrepreneurial Infrastructures


We suggest that entrepreneurial infrastructures comprise four basic ele-
ments. Each element represents a form of support or assistance which is
rendered by an organised facility or installation, the primary reason for
whose existence is to assist venture creation or venture growth and de-
velopment. A description of each element follows. ,

Assistance with Tasks: Potential and existing owners of small, growing


businesses are continually faced with a series of tasks which they must
perform if they are to start, grow and develop commercially. When indi-
vidual entrepreneurs or representatives of businesses seek assistance in
performing their tasks from entities outside the business, such actions
meet the definition of utilising external assistance.35 These actions on the
part of entrepreneurs or small firms can be viewed as arising from deci-
sions to form intersections with external organisations.36 These intersec-
tions and relationships are created with external organisations in the
entrepreneur’s communication network&dquo; when the entrepreneur or busi-
ness perceives a net advantage for creating such a linkage.38

Several factors could influence the business owner’s decision for seek-
ing assistance with task processes and establishing relationships. Assist-
ance could come from facilities in the form of advice or consultation
6/

regarding task processes.39 Advice or consultation could be generic, or it


could apply to specific contexts within the business. Several studies have
documented the value of government-sponsored assistance and consulta-
tion to small, locally-based enterprises.4o

Physical and Monetary Resources: In order to function effectively, busi-


ness owners and small firms require facilitative resources.4’ For instance,
with regard to business creation, potential business owners require ad-
equate physical structures and capital. To the extent that physical facili-
ties and installations exist and are able to accommodate aspiring business
owners (e.g., incubators) and growth-oriented businesses (e.g., industrial

parks), or to the extent that capital sources are adequate (e.g., venture
capital firms), the infrastructure support network is effective.42

Information: In order for small, growing businesses and owners to make


decisions and to carry out work effectively, they require data and infor-
mation 41 on economic, market, legal and technological aspects. This could
be made available from public facilities established within the infrastruc-
ture. Private sector organisations such as consulting firms, chambers of
commerce, trade associations, or not-for-profit mutual help groups may
also be sources of useful information. Lack of specific business and market-
oriented information and knowledge is particularly problematic for smaller
firms.44

Knowledge: Small business owners and their businesses will be ultimately


successful only if the business owner or firm has attained a level of know-
ledge which is adequate for accomplishing the tasks which they are to
perform. Such knowledge, which gets stored in the business owner’s long-
term memory ’41 can be acquired by experience through trial-and-error. 46
However, entrepreneurial knowledge can also be acquired through for-
mal training in the concepts and skill areas that can be directly applied
within the business venture .41 When formal training facilities and pro-
gramme encourage the transfer of such knowledge, these facilities and
programmes are said to be components of the infrastructure. 41
Table 1 lists several general examples of facilities which could render
service in the entrepreneurial infrastructure. Each facility is capable of
rendering several services, some of which could in fact overlap into one
or more of the other basic areas.49 Next, we will examine several critical
factors which encourage or discourage participation in infrastructure sup-
port networks.
8/

Decision to Participate in the Infrastructure Support Network

One indicator of the effectiveness of an infrastructure is the extent to


which practising and potential business owners, and small- and medium-
sized firms participate in the support system and network. Participation is
influenced by several factors. Table 2 lists critical variables, which serve
as independent variables in a proposed decision process that influence a

potential user’s inclination to participate. A proposed decision sequence


is depicted in Figure 1 in the form of a mapping function. Mapping func-
tions represent process paradigms that seek to describe the behaviour of a
system. Figure 1 depicts the effectiveness of entrepreneurial support sys-
tems as represented by an individual’s or firm’s decision to participate.

TABLE 2

Proposed Variables Influencing the Decision to Participate in


Entrepreneurial Infrastructures

As shown in Table 2, six critical considerations, or variables, affect an


individual’s or firm’s decision to participate in the network. Various com-
binations of these considerations lead to decision outcomes reflecting the
entrepreneur’s or firm’s decision. Variable X, reflects the potential user’s
realisation that the individual or firm needs some form of assistance. This
10/

assistance could be either for creating a new venture or for the on-going
SMEs. X2 examines whether the entrepreneur is aware that infrastructure
support is available within the geographic area to provide what is needed.
X3 examines the capacity of the facility. Capacity deals with questions
such as whether the facility is large enough in terms of physical, electronic
and financial capacity and whether there is enough capacity to meet the
demands for the services.
X4 examines the accessibility of infrastructure services and the facili-
ties which provide them. For example, research laboratories may be present
within a community, but may be inaccessible to a potential user for various
reasons like required fees, security clearances, location and the like. Poten-
tial users of infrastructure networks may be prone to use such services if
they are under severe pressure for doing so. Financial pressure and dead-
lines could represent two forms of such pressure which might influence a
potential user’s decision to seek assistance within the support network.
XS represents this variable.
If potential users are to utilise services provided within an infrastruc-
ture, they must perceive that the services they receive are competent.
Competence represents an assessment of the adequacy of the knowledge
level, skill, and/or quality of services received from the facility. Com-
petent staff is essential for effective infrastructure support.10 For instance,
are the personnel working within the facility considered competent to

perform their jobs? Is the technology utilised at the facility adequate to


meet the needs of potential users? Answers to these questions are re-
flected in variable X6. In essence, these considerations represent inde-
pendent variables which determine a potential user’s inclination for
participating within the infrastructure.
We will now apply both the proposed general frameworks for infra-
structure illustrated in Table 1 and the proposed mapping function de-
picted in Figure 1 to a specific setting, namely the nation of Singapore.
The Case of Singapore

The general infrastructure framework and process mapping function were


applied to the nation of Singapore. Hence, the study represents a single
case analysis&dquo; for testing the process model. Singapore received its inde-

pendence from Britain in 1959. While the main island, located off the
Malay Peninsula, covers only 225 square miles, it has a population of
slightly over three million. In its early stages of industrialisation, attract-
ing investments from multinational companies was one of the primary
/11

development strategies of the country. This development strategy of re-


lying upon branches of multinational firms as engines of local or regional
economic growth was popular during the 1960s.11 However, since the
recession of 1985-86, the importance of local companies to the economy
has been increasingly recognised.&dquo;
In 1986, a committee established to review the Singapore economy
recommended that steps be taken to develop entrepreneurship and local
enterprise.54 An outcome of the committee’s deliberations was a land-
mark document outlining these steps with respect to SMEs in Singapore-
the SME Master Plan.55 In order to facilitate the creation and development
of viable local SMEs, several government assistance schemes have been
created. A recent change to the infrastructure has been the creation of a
lead government agency to oversee SMEs in 1996-the Productivity and
Standards Board. This brought under one statutory board most of the
assistance schemes, primarily those focusing on assistance with tasks and
assistance with resources, that were formerly under a number of separate
agencies.
Singapore is targeted to transcend the status of a newly industrialised
economy (NIE) to become a developed economy by the year 2000.56 The
development of SMEs represents a major component in Singapore’s Stra-
tegic Economic Plain. 57 For example, the Productivity and Standards Board
responsible for SMEs reports that, in 1993, local SMEs constituted about
92 per cent of all business establishments in Singapore, and accounted
for 48 per cent of total employment. It also notes that SMEs in Singapore
have developed and grown stronger over the years. For instance, the
nominal value added of SMEs in the manufacturing sector grew from
$14 billion in 1990 to $21 billion in 1993. Goh and Chew discovered that
generally, the government has attempted to administer support services
to SMEs through a multi-agency support system and network compris-
ing both public and private organisations.&dquo; They go on to suggest that
Singapore’s current configuration of comprehensive programmes pro-
vides assistance in terms of facilitating business start-ups and growth,
helping entrepreneurs to overcome constraints, expanding technical assist-
ance to entrepreneurs, and providing information to SMEs. These pro-

grammes were reported as being well-received59 and Singapore was ranked


as the ’world’s most competitive economy’ by the Geneva-based World
Economic Forum in 1999 for the fourth consecutive yearn
Table 3 extends the general framework set forth in Table 1 to the specific
case of Singapore. In 1994 it was estimated that Singapore had over sixty

government or quasi-government programmes for assisting entrepreneurs


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and SMEs.1’ The number of programmes currently is above eighty. Table


3 categorises a sample of Singaporean programmes to determine their fit
with the general framework developed earlier.
While private, government and quasi-govemment organisations are
included within the infrastructure concept, the application of the general
model in Table 3 is restricted to government and quasi-government or-
ganisations. This focus on government and quasi-government organisa-
tions is for two reasons. First, the application of the framework and later
findings will be of greater use to government policy makers. These policy
makers can have a direct and dramatic impact on the composition and
overall efficacy of the infrastructure. Second, the inclusion of all private
organisations that directly offer services to SMEs would result in a study
so unwieldy as to divert attention from one of its important objectives,

namely, to provide direct assistance and insights to policy makers.


Table 3 depicts a range of programmes and elements of the infrastruc-
ture purposefully selected62 to represent assistance programmes and
schemes that would be considered ’normal’ or ’typical’ for SMEs in the
context of Singapore .61 The approach used for selection-the maximum
variation approach64-helps us illustrate the breadth and diversity of the
support network. This is what is displayed in Table 3, which allows an
examination of the configuration of the overall government and quasi-
government support network in an analytical manner.

Methods and Procedures

Participation in the infrastructure was examined using the methodology


of an inductive, qualitative or naturalistic inquiry and through a series of
semi-structured in-depth interviews with entrepreneurs, presidents or top
executives. Since the test of the mapping function was intended to assess
a firm’s overall decision to participate in the network, top executives
with intimate knowledge of the firm’s decision-making processes and
criteria were sought.

The Sample

Effort was made to ensure that companies of different ages and sizes (in
terms of number of employees) were included in the sample. Interview-
ees were asked only about infrastructure facilities and services with which

they had personally interacted. For instance, every respondent was asked
/15

whether he had sought or obtained any business assistance in the last two
years. If the answer was ’yes’, follow-up questions were asked in order to
assess his insights regarding the adequacy, accessibility, competence and
other characteristics pertaining to the facilities or services they actually
used or attempted to use (e.g., Productivity and Standards Board short
courses).
In-depth interviews were conducted with twelve SMEs. Conceptually,
these companies were considered nested within the context of the infra-
structure network. Hence, the sample can be considered a within-case,
nested sample, the intent of which was to generate a better understanding
of the local support network. In order for the research findings to have as
broad an applicability as possible for SMEs within Singapore, the re-
searchers deliberately sought to interview a wide spectrum of SMEs.
In order to enhance the generalisability of the research findings, the
sample was purposefully stratified along three dimensions. First, the sample
was stratified according to industry segments. These segments are design
and manufacturing, trade and distribution, and service (including retail)
companies. Of the twelve within-case companies interviewed, three were
in design and manufacturing, four engaged in trading and distribution,
and five were in service or retail sectors. The majority of SMEs in Singa-
pore fall within these three industry categories.
The sample was also stratified by the age of participating companies
and by number of employees. Revenue figures were not used in the analy-
sis of the sample due to the cultural bias against revealing such informa-
tion. In all cases, the interviewees included at least one member of the
founding group of each company. Appendix A provides a detailed sum-
mary of the companies interviewed. An analysis of characteristics of the
twelve companies is provided in Table 4, which indicates that given the
characteristics of the cases within the study, the results of the research
should be generalisable across SMEs within the Singaporean context.

Procedure

The procedure used in the study began with the preconceived mapping
function, indicated in Figure 1, then it utilised an interview to test the ‘fit’
of the process model with the company’s own experience. This represents
a form of replication logic in which successive interviews act as a series
of multiple experiments.&dquo; If the model fits the company’s decision criteria
and sequence, no revisions were made. Exceptions, and hence revisions,
to the existing model were sought during each company interview. This
16/

TABLE 4
Analysis of Companies Interviewed

Source: Personal interviews by authors.


process of analytic induction was continued in an iterative manner until a
final conceptual framework was established.66 This confirming and
disconfirming approach 61 has also been referred to as a ’strong inference’
approach to theory building.68
Within-case semi-structured interviews were conducted with twelve
founding entrepreneurs or current chief executive officers. Sometimes
/17

the interview with the top executive was conducted in the presence of a
partner or chief assistant. The twelve individuals were selected because
they were knowledgeable with respect to the organisational and decision-
making processes which took place within their firms. All interviews were
audio-taped with the consent of all participants.

Inter-coder Reliability

As a result of the interviews, seventy-eight specific instances were men-


tioned in which entrepreneurs either actually received infrastructure assist-
ance, explicitly considered interacting with components of the network
or, in retrospect, missed opportunities to receive assistance through inter-
action with infrastructure facilities. These actual, explicitly considered,
or missed opportunities for infrastructure interaction generated seventy-

eight sets of data for content analysis. Each of these data sets was exam-
ined separately to determine its ’fit’ with the proposed mapping function
and its six suggested independent and four suggested dependent vari-
ables. This examination process resulted in the coding of a total of six
data-points, or decision points, within the model, for the seventy-eight
sets of data. Of the total six decision points examined, ninety represented
disagreements between the two analysts after discussion, which resulted
in an inter-coder reliability factor69 of 83.52 per cent (i.e.,[546-90]/546).

Analysis

Of the seventy-eight sets of data which were analysed, six did not fit the
proposed conceptual model. Seventy-two data sets conformed to the pro-
posed framework. Figure 2 illustrates the distribution of data sets which
were confirmed by the model. The figure indicates that each path was
verified by at least one data set, while some paths had a significantly
higher number of data sets than others. The numbers of data sets which
’fit’ along each path are indicated.
The variable which accounted for the lack of fit with all the six data
points was
XS (Is the business need urgent?). One data set did fit the
model, but was not adequately explained by the proposed framework.
Table 5 indicates that data sets for companies 4, 5, 6, 7, 10 and 11 did not
fit the model. The data set for company 12 was also seen as supporting
the increased importance of the ’urgency’ variable X5.
19

TABLE 5
Counter-Examples to Proposed Model

Notes: The responses of Company 12 technically fit the proposed model. However, the
’yes’ response was stronger than the predicted ’participation possible’ response.
P Participation possible
=

Revising the Mapping Function


After several iterations through the data sets, seeking to match the data to
the mapping function, a final version of the process was derived. No new
variables were discovered during the analysis which affect the entrepre-
neur’s or company’s participation in the infrastructure. However, the order-
ing of the variables was altered to reflect the increased importance of
specific variables in the decision process. Also, one variable was defined
in greater detail. The revised list of variables appears in Table 6.
Table 6 indicates that variable X3 has been changed. The decision
question, ’Is the business need urgent?’ has now been moved to an earlier
decision point in the mapping function to reflect its increased importance
as discovered in the data.

Impact of Urgency of the Need on Decision to Participate: As indi-


cated earlier in Table 5, the non-conforming data sets show that, if need
for assistance or services offered by the infrastructure is intense, the com-
petence of the facility or service is overlooked. The entrepreneur will
seek to utilise the facility or interact with the infrastructure regardless of
the facility’s accessibility, adequacy, or perceived competence. On the
other hand, as indicated by the response of Company 4, when the busi-
ness need is not urgent, there remains the possibility that the entrepreneur

may choose not to interact with the infrastructure.


20/

TABLE 6 .

Revised Variables Influencing the Decision to Participate


in Singapore’s Entrepreneurial Infrastructure

In addition to the clear lack of fit of the above data sets, seven of the
twelve companies verbally expressed support for the increased impor-
tance of the urgency variable. These results were taken as strong evidence
that the mbdel should be modified to take into account the increased
importance of the immediacy of the business needs in the participation
decision.

Impact of Latent Demand on Decision to Participate: The seventh item


which did not fully fit the participation model was revealed regarding the
interaction of Company 10 with the Skills Development Fund (SDF).
This data set was coded as having positive responses for all variables,
which was the case at the time of the interview.
Company 10 is a young company, specialising in importing automo-
bile accessories such as designer mirrors, brake lights, engine perform-
ance-enhancing additions, car seats and upholstery. During the interview,
the entrepreneur revealed that he was initially unaware of the Skills Devel-
opment Fund, and how it could apply to his company. Then, he was
/21

introduced to the facility by his finance company. Once he was made


aware of the resource, he immediately recognised the need for assistance

and utilised the facility. The Skills Development Fund provides subsidies
for training employees in local enterprises.
This pattern was also displayed by the entrepreneur during the inter-
view. At the time of the interview, he was unaware that tax incentives
were available for companies that participated in overseas trade shows
and exhibitions. Upon discovering during the interview that such incen-
tives were available, he quickly recognised the applicability of the tax
incentives to his business, and indicated that he would immediately in-
vestigate how he might take advantage of such incentives.
From these two interactions, it became apparent that recognition of an
awareness of a facility or resource and recognition of the need for assist-
ance could occur simultaneously. Indeed, in some cases, recognition of
an awareness of a facility can occur before the entrepreneur becomes
aware of a need for the facility’s services. The model was modified to
take into consideration these possibilities.

Impact of Accessibility on the Decision to Participate: Owing to the


difficulty encountered in coding variable X4, ’Are the resources to assist
potential users considered accessible?’, it became clear that more refined
coding scores would be required. Therefore, three categories were cre-
ated to record this variable. First, ’inaccessible’ was used to describe when
the facility was considered unavailable due to factors such as regulations
or prohibitive costs associated with accessing the facility in the short-
term (for instance, within the next two years). Under these and similar
conditions, it would not be possible for the business to interact with the
facility under any circumstances in the near future.
On the other hand, if the facility was accessible, differences in the
behaviours of the entrepreneurs were seen depending on whether the facil-
ity was either ’difficult’ to access or ’easily accessible’. For instance, in
the case of Company 3, the difficulty in obtaining a bank loan to finance
the start-up drove the entrepreneur to seek only equity financing for his
company. However, when the facilities were perceived to be easily acces-
sible, the entrepreneurs were likely to use them depending on compe-
tence, urgency of the business need, and perceived adequacy of resources.
It was also discovered that speed of the response of the facility was one
of the attributes which should be considered in the definition of acces-
sibility. For example, Companies 7 and 9, both involved in the design
and manufacture of electronic products, expressed the same sentiment
22/

concerning the Research Development Assistance Scheme. The entrepre-


neurs believed that their companies could neither spend the time nor the
resources necessary to develop a comprehensive business plan for the

purpose of pursuing funds from the scheme. They also felt that, if and
when funds were made available, the opportunity to use them would have
passed. Therefore, the speed at which new funds could be brought into
the company served as an important reason why finance companies were
preferred to banks when immediate financing, usually in response to large
orders, was needed. From the information provided by these respond-
ents, it appears that the accessibility of a particular facility should include
consideration of the speed with which the facility will be able to respond
with its services.
The final revised conceptual framework is illustrated in Figure 3. This
revised framework indicates the following:

1. A dotted line between variable X, and Xz indicating the possibility


that both conditions can be present simultaneously, or that XZ may
precede PI,
2. The decision question, ’Is the business need urgent?’, formerly as-
sociated with variable XS has now been moved forward in the map-
ping function to become variable X 3 This change reflects the
increased importance of this decision question in the mapping func-
tion.
3. Decision question, ’Are the resources or facility considered ad-
equate in terms of capacity?’ has now become variable X 5’
4. Finally, variable X4, ’Resources to assist potential users are con-
sidered accessible’ now has three possible values. This revised map-
ping function fits all of the seventy-eight collected sets of data.
Implications and Conclusion

The outcomes or lessons learned from the study can be useful in terms of
their potential for influencing the decision-making processes of policy
makers. The outcomes revealed that the general model for infrastructures
can indeed be applied to a specific spatial context, in this case, the island
nation of Singapore. The general model was used to categorise infra-
structure programmes and initiatives. These programmes and initiatives,
in turn, employ ’policy tools’’° for targeting SMEs. At any point in time,
the government of Singapore uses policy tools with the intent of enhanc-
ing national competitive advantage 7’ and increasing the local and global
24

competitiveness of SMEs.11 Maintaining and enhancing an effective in-


frastructure is seen as essential to the nation’s broad policy objectives.
The new ordering of variables, depicted in Table 6 and Figure 3, can
be of assistance in increasing the effectiveness of the network in the fol-
lowing manner. The revised table and mapping function indicate that the
most important variable for the entrepreneur or company is to recognise
that there is a legitimate need for business assistance. One way in which
policy makers can assist in facilitating this initial and most essential step,
variable XI, is by publicising or encouraging the publication of bench-
mark standards of performance. Such readily available performance ref-
erences could help in developing ’typical’ operational metrics for

Singapore-based companies. However, in developing such standards, care


should be taken to distinguish typical operating standards for large, multi-
national corporations from those which reflect the ’best practices’ of
SMEs. Currently, databases chronicling best practices standards and
metrics for growth-oriented SMEs are virtually non-existent worldwide.’3
Databases providing financial and non-financial benchmark information
for Singaporean SMEs should be encouraged.
Variable XZ appears to offer the greatest potential for improving the
current effectiveness of the infrastructure. Without investing in additional
facilities, the effectiveness of schemes currently available could be signi-
ficantly enhanced by informing greater numbers of SMEs and entrepre-
neurs of the availability of existing resources. This reality is represented
in Figure 3 (see the dotted line connecting variables X~ and X2). Our
inquiry reveals that entrepreneurs and SMEs, upon learning the avail-
ability of facilities which could prove beneficial to their businesses, would
immediately seek out such facilities. Hence, more companies should be
made aware of the existence of the wide array of services which already
exist. 74
The urgency of the need facing entrepreneurs and SMEs, variable X3,
was discovered to be more important than originally predicted. The

government can have no effect on the degree of urgency of specific chal-


lenges facing SMEs. However, X3, the degree of urgency of the prob-
lem, should be considered in relation to variable X4, the accessibility of
the resources or facilities. When entrepreneurs urgently need specific re-
sources, facilities providing such resources should be readily accessible.
Regarding the accessibility variable, X4, entrepreneurs were found to be
more sophisticated than originally proposed, calling for
greater refine-
ment of the independent variable. For instance, when entrepreneurs
urgently need financial assistance to fill orders-in-hand, the inaccessibility
/25

of government programmes due to cumbersome, time-consuming proce-


dures deters participation. Implications for policy in these instances could
encompass the creation of ’rapid response’ procedures for pre-selected prob-
lems facing SMEs. Pre-determined, streamlined decision procedures could
be developed for certain situations in which rapid responses are critical
to solving the challenges. The continuous review of existing programmes
in order to identify situations in which rapid responses could be utilised
would represent positive steps toward enhancing SME competitiveness
and creating stronger partnerships between SMEs and the government.
The study indicated that clients do consider capacity, X5, before facili-
ties are approached. However, institutional or programme capacity, which
includes financial, physical, electronic and manpower characteristics,
while remaining an influential variable, is not as important to the deci-
sion maker as originally proposed. Finally, entrepreneurs and SMEs are
least concerned with the competencies of facilities, X6, as they effect the
likelihood for engaging such resources. This was clearly borne out when
financial resources were approached. In the case of consultation, perhaps
SMEs simply ignore what they consider to be ’inappropriate’ or ‘irrelevant’
advice. Regarding both financial resources and consulting advice, SMEs
seem to be least concerned with the discerned competence of the resource,
as it affects their own decision to seek or not seek assistance.

Limitations of the Study and Future Research

Our attempt to develop general models for the infrastructure concept and
the decision to participate in infrastructure networks has several limita-
tions which could be addressed in future research on the topic. For in-
stance, as mentioned during the development of the infrastructure concept,
some organisations or programme initiatives can offer multiple services
which can in turn be catagorised in more than one major infrastructure
category. A single university programme, for example, can provide data,
consultation, and even physical resources in the form of incubator space.
In the case of Singapore, programmes were categorised based upon the
predominant services rendered by the facility. Future studies can address
the flexibility of programmes and facilities across multiple uses in an
attempt to enhance their adaptability within a given geographic area.
The model for participation developed here is based upon in-depth
interviews of twelve companies selected as representing typical SMEs in
the Singaporean economy. The essence of the inquiry process was to
look for exceptions to the proposed mapping function in an inductive
26/

iterative fashion. Therefore, while all twelve cases fit the present revised
model, it is likely that other exceptions to the framework currently exist
within the nation. As a matter of public policy, such exceptions should be
sought and identified, as the government continues its efforts for increas-
ing the competitiveness of its SMEs.
Singaporean policy makers should also address the following addi-
tional issues in future research: What specific programmes work best for
which business categories? To what extent are existing programmes reach-
ing their intended audiences? And, what aspects of each programme are
operating most effectively? Further, while the revised framework devel-
oped here may represent the decision-mapping function of a vast number
of Singaporean firms, its applicability to other geographic and cultural
settings may be limited. Hence, replication of the research and testing in
other settings is suggested. Questionnaires should be developed to exam-
ine the predictive power not only of the independent variables suggested
here, but also of other attitudinal and situational variables which may
affect the likely participation of entrepreneurs in infrastructures.
The concepts and ideas developed in this study are highly relevant in
light of the policy initiatives currently being taken by the Asia Pacific
Economic Cooperation (APEC) econom .ies.11 It may be noted that the
following policy objectives were set forth by the Ministerial Forum of
APEC economies that met at Adelaide in 1995:76 (a) to promote user-
friendly and efficient systems to access accurate, high quality informa-
tion, (b) to provide less costly debt and equity financing on reasonable
terms, (c) to liberalise and facilitate trade and investment, and provide
accurate and timely information on foreign markets, opportunities, cultural
and business practices and regulations, (d) to improve technology train-
ing, guidance, R and D access/sharing, and management and business
practices, and (e) to improve human resources capabilities in managerial
and technical skills and technology sharing, as well as linguistic and cross-
cultural abilities.&dquo;
The authors believe that the concepts detailed in this research, for
example, the generic infrastructure model, could in fact be applied to the
APEC region in general. The notion of an infrastructure of infrastruc-
tures could be applied to the twenty-one member association. For exam-
ple, the education of entrepreneurs within the region could be facilitated
electronically through virtual universities, and virtual skills development
and training programmes could be coordinated through the offices of the
APEC Secretariat. 71 Such programmes would benefit APEC SMEs,
thereby promoting employment and growth throughout the region.
27

As demonstrated in Southeast Asia in the recent past, business and


economic conditions do not remain static. The realisation that these con-
ditions can and will fluctuate necessitates periodic reexamination of the
original intent of infrastructure policy as well as the efficacy of its specific
component programmes. The general infrastructure model and decision-
making mapping function developed in this article can provide policy
makers with definite concepts and variables to consider while designing
and enhancing their infrastructures.

Notes

(Earlier versions of this paper were presented at the 5th ENDEC Conference on Entrepre-
neurship, 7-9 July, 1994 in Singapore, and at the 42nd ICSB World Conference on
Small Business, 22-24 June, 1997 in San Francisco. The authors wish to thank Kenneth
D. Mackenzie for helpful insights during the early stages of theory development, Joseph
C.G. Teo and Seah Y.G. for assistance and contributions during the data collection
and analysis stages, and Michael Daly, Jeanne M. Logsdon and Sean Murray for in-
valuable comments and assistance).
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32. P. Shapira, J.D. Roessner and R. Barke, ’New Public Infrastructures for Small Firm
Industrial Modernization in the USA’, Entrepreneurship and Regional Development,
VII-1 (1995).
33. For example, P.A. Abetti and P.A. Wheeler, ’Planning and Building the Infrastruc-
ture for Technological Entrepreneurship: Field Studies in the USA, France and
Mexico’, in N.C. Churchill, W.D. Bygrave, J.A. Hornaday, D.F. Muzyka, K.H. Vesper
and W.E. Wetzel, Jr. C. (eds), Frontiers in Entrepreneurship Research (Wellesley,
MA: Babson College, 1990).
/29

34. Bull and Winter, ’Towards a Theory’ (no. 9 above).


35. Smallbone, North and Leigh, ’The Use of External Assistance’ (no. 24 above).
36. K.D. Mackenzie, Organizational Design: The Organizational Audit and Analysis
Technology (Norwood, New Jersey: Ablex Publishing Corporation, 1986).
37. Szarka, ’Networking and Small Firms’(no. 29 above).
38. Ring and Van de Ven, ’Developmental Processes’(no. 26 above).
39. Shapira, Roessner and Barke, ’New Public Infrastructures’ (no. 32 above).
40. For example, S. Birley and P. Westhead, ’A Comparison of New Firms in "Assisted"
and "Nonassisted" Areas in Great Britain’, Entrepreneurship and Regional Develop-
ment, IV-4 (1992); Gibb, ’Key Factors in the Design of Policy Support’ (no. 23
above); and K. Hindle and M. Gillin, ’Government Involvement in Entrepreneurship
and New Business Creation in Australia: A Qualitative Analysis of Public Percep-
tions and Opinions’, Entrepreneurship and Regional Development, III-4 (1991).
41. Bruno and Tyebjee, ’The Environment for Entrepreneurship’ (no. 10 above).
42. See A.L. Carsrud, ’Entrepreneurship and Enterprise Formation: A Brief Perspective
on the Infrastructure in Europe’, Entrepreneurship: Theory and Practice, XV-3 (1991);
G. Kozmetsky, ’Economic Development Through Effective Incubators Progress and
Regional Technology Transfer: Two Case Studies for Successful Technology Com-
mercialization’, Paper presented at the Texas Business Opportunities Conference,
San Antonio, Texas, 8 May, 1992; and McMullan and Long, ’Entrepreneurship Edu-
cation’ (no. 21 above).
43. A.C. Cooper, T. Folta and C. Woo, ’Information Acquisition and Performance by
Start-up Firms’, in N.C. Churchill, W.D. Bygrave, J.A. Hornaday, D.F. Muzyka, K.H.
Vesper and W.E. Wetzel, Jr. C. (eds), Frontiers in Entrepreneurship Research
(Wellesley, MA: Babson College, 1991); and C. Woo, T. Folta and A. Cooper, Entre-
preneurial Search: Alternative Theories of Behavior, in N.C. Churchill, W.D. Bygrave,
J.A. Hornaday, D.F. Muzyka, K.H. Vesper and W.E. Wetzel, Jr. C. (eds), Frontiers of
Entrepreneurship Research (Wellesley, MA: Babson College, 1992).
44. S. Cromie, ’The Problems Experienced by Young Firms’, International Small Busi-
ness Journal, IX-3 (1991).
45. W.D.Guth, A. Kumaraswamy and M. McErlean, ’Cognition, Enactment and Learn-
ing in the Entrepreneurial Process’, in N.C. Churchill, W.D. Bygrave, J.A. Hornaday,
D.F. Muzyka, K.H. Vesper and W.E. Wetzel, Jr. C. (eds), Frontiers of Entrepreneur-
ship Research (Wellesley, MA: Babson College, 1991).
46. For example, P.J. Guglielmino and L.A. Klatt, ’Entrepreneurs as Self-Directed Leamers’,
in J.S. Devlin and M. M. Trevino (eds), Proceedings of the 38th World Conference
ICSB, Las Vegas, NV, 20-23 June, 1993; and A.R. Reuber and E. M. Fischer, ’The
Learning Experiences of Entrepreneurs’, in N.C. Churchill, W.D. Bygrave, J.A.
Homaday, D.F. Muzyka, K.H. Vesper and W.E. Wetzel, Jr. C. (eds), Frontiers of
Entrepreneurship Research (Wellesley, MA.: Babson College, 1993).
47. For example, L. Barnes and S. Jones, ’Small Business Training Programmes in Vic-
toria : A Survey of Course Content and Effectiveness’, Journal of Enterprising Cul-
ture, III-1 (1995); A. Ghosh and Z. Block, ’Audiences for Entrepreneurship Education:
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and Science of Entrepreneurship Education, Vols I and 2 (Berea, Ohio: The Project
for Excellence in Entrepreneurship Education, 1993/94); and in A.A. Gibb, ’Small
Business Challenge to Management Education’, Journal of European Industrial Train-
ing, VII-5 (1983).
48. Shapira, Roessner and Barke, ’New Public Infrastructures’ (no. 32 above).
49. McMullan and Long, ’Entrepreneurship Education’ (no. 21 above).
30/
50. Shapira, Roessner and Barke, ’New Public Infrastructures’ (no. 32 above).
51. M.B. Miles, and A.M. Huberman, Qualitative Data Analysis: An Expanded Sourcebook
(Thousand Oaks, CA: Sage Publications, 1994).
52. D. Maillat, ’Innovative Milieux and New Generations of Regional Policies’, Entre-
preneurship and Regional Development, X-1(1998).
53. L.N. Lee, M.K. Heng, K.W. Ho, A. Tan, and S. Teo, ’Contributions of Government
Assistance Schemes to the Development of Entrepreneurship Activities in Singa-
pore’, Proceedings of the ENDEC World Conference on Entrepreneurship: The Pur-
suit of Opportunity, Singapore, 7-9 July, 1994.
54. Singapore Ministry of Trade and Industry, The Singapore Economy: New Directions
(Singapore: Singapore National Printers, 1986)
55. Singapore Economic Development Board, The SME Master Plan (Singapore: EDB,
1989).
56. F. Wu, ’The ASEAN Economies in the 1990s and Singapore’s Regional Role’, Cali-
fornia Management, XXXIV-1(1991).
57. M. Goh and I. Chew, ’Public Policy and Entrepreneurship Development—Singapore
Style’, Journal of Enterprising Culture, IV-1(1996).
58. Goh and Chew, ’Public Policy and Entrepreneurship’ (no. 57 above).
59. Goh and Chew, ’Public Policy and Entrepreneurship’ (no. 57 above).
60. E.A. Powell, ’Singapore Tops Global Competitiveness List’, Associated Press news
release, 15July, 1999. The World Economic Forum has ranked Singapore as the
’world’s most competitive economy’ since the inception of the Global Competitive-
ness Report in 1996. Incidentally, in 1998, the United States moved from the third

position it held in 1997 to the second.


61. S. Teo and P. Lee, ’Awareness and Utilization of Government Assistance Schemes
Among Singapore Firms’, Proceedings of the ENDEC World Conference on Entre-
preneurship : The Pursuit of Opportunity, 7-9 July, 1994, Singapore.
62. J.W. Creswell, Qualitative Inquiry and Research Design: Choosing Among Five Tra-
ditions (Thousand Oaks, CA.: Sage Publications, 1998).
63. Miles and Huberman, Qualitative Data Analysis (no. 51 above).
64. Miles and Huberman, Qualitative Data Analysis (no. 51 above).
65. R.K. Yin, Case Study Research: Design and Methods (Thousand Oaks, CA.: Sage
Publications, 1994).
66. N.K. Denzin, The Research Act (Englewood Cliffs, NJ: Prentice Hall, 1989).
67. Creswell, Qualitative Inquiry (no. 62 above).
68. R.L. Dubin, Theory Building (New York: Free Press, 1978).
69. Miles and Huberman, Qualitative Data Analysis (no. 51above).
70. R.C. Rist, ’Influencing the Policy Process with Qualitative Research’, in N.K. Denzin
and Y.S. Lincoln (eds), Handbook of Qualitative Research (Thousand Oaks, CA.:
Sage Publications, 1994).
71. K.Y. Tan, ’Public Policies in the Singapore Economy’, in F.G. Adams and W.E.
James (eds), Public Policies in East Asian Development: Facing New Challenges
(Westport, Connecticut: Praeger, 1999).
72. Business Week, ’Remaking Singapore, Inc.’, 19 April, 1999.
73. A significant exception in this connection is the newly established database at the
Center for Entrepreneurial Leadership at the Ewing Marion Kauffman Foundation in
Kansas City, Missouri, USA.
74. One of the organisations that pioneered efforts for informing the general public about
facilities available in the infrastructure was the Entrepreneurship Development Center
(ENDEC).
/31

75. See examples in Adams and James, Public Policies in East Asian Development (no.
71 above).
76. The Ministers of APEC economies held meetings also at Osaka in 1994, Cebu in
1996 and Kuala Lumpur in 1998.
77. Asia Pacific Economic Cooperation (APEC), Guidelines for PLG Project Design and
Approval, Singapore, SME Policy Level Group, 1997.
78. An Action Programme for Skills Development was, in fact, initiated at the 1998 meet-
ing in Kuala Lumpur. The Philippines and Canada are currently developing an APEC-
wide programme for distance learning that will train and certify individuals to advise
and assist SMEs in all APEC countries.
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