GEK2001/SSA2202/GES1003

Changing Landscapes of
Singapore
Bicentennial Version
(2019 only)
LECTURE 9: ECONOMIC LANDSCAPES

LABOUR REQUIREMENT IN SG? WHAT IS THE

POPULATION IN SG? SEE HOW ALL THE LECTURE
TO CONNECT TOGETHER .

EXAM NEED TO MAKE CONNECTION BETWEEN

DIFFERENT LECTURES ( E.G. THE AGING
POPULATIONS AND FOREIGN IMMIGRANTS )?
 Outline
 Mini Quiz
 Recap – immigration landscapes
 Today’s objectives
 Links to Bicentennial
 Phases of industrial policy - early industrialisation,
regionalisation, cluster development  and their landscapes
 Key issues so far: critique of TNCs/GLCs and moving forward
 Recent economic developments
 Challenges
 Summary
Recap
 Bicentennial – we were always an immigrant nation.
 Reflect on immigration in relation to CMIO nation-
building ethos. Relevance? Need to adapt?
 What is a global city? Hardware vs Software and
transnational flows into SG: FT, FW, Creative class and
international students.
 What are immigrant landscapes? Dominant or
alternative? Bifurcated landscapes. (lucky plaza, paya
lebar, golden mile, marina bay, orchard road, botanic
gardens)
 How successful have we been with integrating
immigrants?
 Today’s Objectives
 Globalisation: Singapore is defined and constituted by trends and
developments that transcend its territorial boundaries (porosity
of boundaries)
 Concept of flows helps us to understand Singapore’s global
economic reach
 Flows of people, knowledge and capital impact landscapes
 Interconnectedness and Interdependence to places outside
Singapore
 Processes and events occurring at the global scale can impact the
local scale. (power can be understood in terms of factors that
influence – e.g. external factors that influence state decisions)
 Bicentennial Link: A lively
seaport city even before Raffles
 Chinese, Thai, Javanese early kingdom interested in trade in
Melaka Straits.
 Late 14th century prosperous time for commercial activity in
Temasek (i.e. Singapore)  based on evidence from
archaeological digs in Singapore (Miksic, 2013).
 British arrival and East India Company. Building of stronger
commercial and political interest of British in Singapore.
 Counter the power of the Dutch in Indonesia.
 Economy: natural resources to be extracted and also trade by
having ports along Straits of Melaka (Singapore, Melaka and
Penang).
Independent Singapore Needed
to think Global
 “As a global city, Singapore would not be dependent upon
the Malaysian hinterland for its survival, as it had been as
an entrepot. The world would now be its hinterland…
Singapore’s survival, Mr Rajaratnam [Singapore’s foreign
Minister, 1970s] contended, would depend upon its
ability to establish a niche in the rapidly expanding global
economic system.” (Kwa, 2002)
 A city’s integration into the global economy as key factor
in growth and development
From Developmental State to
Global City Vision
 First industrial revolution: independence and nation
building
 Second industrial revolution: upgrading and
regionalisation
 Third industrial revolution: Science parks and
biotechnology
First industrial revolution
(1960s-1970s)
 Conditions:
High unemployment
Geographical constraints ( difficult to partner with other
countries)
Lack of natural resources
Lack of experience of local entrepreneurs
PAP’s need to bolster its political legitimacy
Dissatisfied and restless population
 First industrial revolution
(1960s-1970s)
Objectives:
Developmental and pragmatic approach
Create massive employment through labour-intensive, export-oriented industrialisation programme
Attract FDI into Singapore
Encourage technology transfer (skills upgrading)
How?
Maintain low cost of production
Image of efficient and corruption-free government
Open policy to encourage FDI from TNCs
Infrastructure building
Building a No.1 Workforce.
SOEs: Keppel Corp; SembCorp; Temasek Holdings
Key state institutions:
Economic Development Board (EDB) [1961] - Promote investment, train manpower and develop
industrial sector
Jurong Town Corporation (JTC) [1968] -Low cost production sites for foreign manufacturing
firms
First industrial revolution
(1960s-1970s)
 Successful in attracting foreign direct investment (FDI)
especially from the US, UK, Netherlands, Germany and Japan.
 Industrialisation aided by regional neighbours following
protectionist policies (protecting domestic markets and
industries). Which has gives Singapore advantage in its open
economy.
 High rankings in
◦ World Competitive Yearbook (published by IMD International)
◦ Global Competitive Index (published by the World Economic Forum
◦ BERI (Business Environment Risk Intelligence).
First industrial revolution
(1960s-1970s)
 Issues:
◦ By late 1970s, Singapore becoming too expensive
◦ Other countries in the region better value for low cost and labour-
intensive manufacturing activities
◦ Regional neighbours began to abandon protectionist policies to
pursue FDI-oriented development strategies
◦ Rise of a global ‘new’ economy: Beginning of era of knowledge-
intensive economy.
Second industrial revolution
(1980s-1990s)
 Economy had to be re-structured accordingly in line with global
economic trends
◦ Drive out labour-intensive manufacturing
◦ Attract FDI in services and knowledge-based and high value added
industries
 Wages were increased based on National Wage Council (NWC)
recommendations to attract highly-skilled and innovative
workers
 Introduction of the Skills Development Fund to aid upgrading
of labour skills: Transition from low-skilled to higher skilled
employment
Second industrial revolution
(1980s-1990s)
Focus on higher level- and value-added industries
◦ E.g. Petrochemicals, financial services, IT industries, R&D
◦ Jurong Island mooted in late 1980s [more about that later]

A*STAR (Agency for Science, Technology and Research) –

previously National Science and Technology Board
◦ Set up to oversee Singapore’s research institutes
◦ Dedicated to biomedical science, IT and engineering
Improving infrastructure and urban environment to attract
foreign talent
◦ E.g. Singapore’s image as a vibrant city to live and work
◦ Special schemes to attract foreign talent in key industries
Second industrial revolution
(1980s-1990s)
Going regional:
◦ Bringing the region in: regional HQs
E.g. Operational Headquarters Scheme (OHQ) and Business
Headquarters Scheme (BHQ)
Encourage TNCs to locate high-end operations in Singapore
Relocate labour- and land-intensive operations to nearby
cheaper locations (SIJORI Growth Triangle)
 command and control function of global cities

Connecting with the region

 Second industrial revolution
(1980s-1990s)
Going regional:
◦ Going out of Singapore: overseas investment and industrial parks
The need for an external wing
With global competition, heavy reliance on foreign TNCs alone is not
sufficient in achieving its long term goals
The need to develop indigenous economic capabilities that can tap
into growth potentials in other countries
◦ We cannot become robust and strong by ourselves – it depends on our
neighbours, on our links, on our outreach and our capabilities’ (PM Lee Hsien
Loong, Straits Times, 15 January 2010)
‘Singapore Unlimited’ unveiled by EDB; alongside ‘Regionalisation
2000’ or ‘R2000’.

Such as encourage business to venture out to invest in other

countries
Second industrial revolution
(1980s-1990s)
Regionalisation 2000:
In 1993, SM Lee Kuan Yew announced new state initiatives
◦ Develop local entrepreneurs
◦ Build up the external wing of the Singapore economy.
Strategic Economic Plan (1990s) two-pronged regional
approach:
◦ (1) Push for Singapore investors to go abroad (Prima, Charles and
Keith, Yeo’s); selling technological know-how
◦ (2) ‘Regional Industrial Parks’ program unveiled to tap into regional
opportunities (SIP).
Second industrial revolution
(1980s-1990s)
Regional industrial parks programme:
Singapore government developing and managing self
contained industrial estates in Asia
Singapore government offering high quality ‘secondary’
factors of production (e.g. help in infrastructure and
administration)
Aim to generate profits through sale of industrial units and
management charges to supplement Singapore’s economy
Also serves as test beds for Singaporean companies going
abroad
Second industrial revolution
(1980s-1990s)
Suzhou Industrial Park:
Initial success:
◦ Increase in foreign investors in the SIP
◦ Developmental effects for Suzhou in terms of urban renewal,
infrastructure and housing
◦ Spillover effects e.g. retail and commercial industries primarily due to
increased income of local Suzhou residents
Problems:
◦ By end 1997, reports of problems with SIP
◦ Partially due to the Asian Financial Crisis (1997-98)
◦ Also result of competition from other Chinese-managed industrial
parks in Suzhou: Suzhou New District Industrial Park
Challenges to Regionalisation?
Yes, there are benefits associated with regionalisation
access to resources that Singapore lacks; take advantage of
large markets that are close-by
But……
◦ Susceptible to global economic conditions- e.g. 1997 Asian Financial
Crisis & 2008 Global Financial Crisis
◦ In terms of setting up regional parks in other places regulations in
host countries and lack of understanding of the local cultures (e.g.
Suzhou Industrial Park)

Going over to the countries to understand their ways of business

( different operating /behavior as compared to sg)
Third industrial revolution?
(2000s – )
Development of science parks and biotechnology sector
Grounding global flows in specific high tech clusters
◦Traded interdependencies: reductions in transaction costs
due to shared resources and infrastructural provisions
◦Untraded interdependencies: collaboration underpinned
by trust and social relations e.g. mentorship, networking,
creation and transfer of tacit knowledge, etc.
◦Global pipelines: forming networks with other local and
distant co-working spaces, such as Silicon Valley
One-North (Wong & Bunnell,
2006)
‘The icon of the new economy in Singapore’, but also an
important ‘national’ project to ‘transport Singapore’s
economy into the knowledge age’
Possess such ‘key elements of a successful technopolis’ as
the physical proximity of universities, research institutions
and social and recreational amenities that would ‘attract
and retain scientific talents by providing an environment
that will support their creative work through intimate and
informal interaction amongst researchers

Social environment to support creative workforce.

One-North (Wong & Bunnell,
2006)
Transition to a ‘knowledge economy’ by ‘attracting both
local and foreign talent’ and by providing ‘an environment
where business interactions, technology exchanges and
networking can flourish to provide a breeding ground for
innovation and technopreneurship
“Little Bohemia” for the cultivation and promotion of
creativity: Holland Village, Portsdown Road, Dempsey,
Rochester Park
Third industrial revolution?
(2000s – )
Biopolis
◦ Part of Science and Technology Plan 2010 budgeted at $2billion
to lay foundations for Singapore’s biomedical industry
◦ Focal point for scientific talent and biomedical research; attract
local and foreign talent and private/ public companies to work
on laboratory research and healthcare
◦ Budget now stands at $6billion, with $13.5billion earmarked for
future
◦ Need for infrastructure development
◦ Attract foreign companies and expertise to base in Singapore
◦ For investment and to train Singapore scientists
c) Third industrial revolution?
(2000s – )
Set-up of efficient infrastructure and facilities – ‘Plug-and-
play’ approach.
◦ One-north development which involves converting old HDB blocks
and walk-up apartments into more contemporary loft-style
condominiums and SOHO for expatriates and other scientists
recruited to work there - ‘to make it big, highly aesthetic’.
Encourage vibrant lifestyle and creativity
◦ Singapore promoted as a ‘city which is full of life and energy and
excitement, a place where people want to live, work and play, where
they are stimulated to be active, to be creative and to enjoy life’ (Lee
Hsien Loong, ND Speech 2005)
Biopolis (Holden & Demeritt,
2008)
“Change the mindset of its population and inculcate the
individual creativity and entrepreneurialism needed for
scientific innovation”
“Urban regeneration and renewal to construct new science
parks; educational policies to develop a scientific labour
force; health policy to facilitate more translational and
clinical research; and an immigration policy to encourage
the influx of foreign scientists, technicians and researchers”
Biopolis (Holden & Demeritt,
2008)
Integrated facilities: “Biopolis was the obvious one to go for because
you’ve got this integrated system here. You’ve got all this infrastructure,
it’s all provided, and as a company you don’t have to put your hand in
your pocket to start from scratch setting something up”
Favourable research climate: “Singapore offered a stable infrastructure
and the promise of good honest non-corrupt regulation and a good cost
base by virtue of incentives and grants and also from the regulation
point of view the access to being able to do clinical research would be
predictable and timely opposed to having uncertain time frames and
other issues in other countries”; “That’s different here, and research
money is much more easily available”.
Third industrial revolution?
(2000s – )
Challenges:
◦ Competition from regional neighbours and elsewhere
◦ Geographical constraints still apparent (not enough space)
◦ Over-reliance on foreign talents/ Unethical behaviour (such as asking them to
come sg to do research but they awol)
◦ Growth at all costs?
◦ Singapore criticised as too docile and closed-minded: not the vibrant and
exciting place as presented in the brochures
◦ Fear of Singaporeans becoming too civic-minded, too vocal and too free-
spirited ( not wiling to take risk)
Key issues for far: TNCs and GLCs
Singapore’s economic success so far has been based on its favourable
insertion into global networks of production via
1) Attracting foreign capital in the form of Transnational Corporations
(TNCs)
2) Outward investment of national champions in the form of
Government-Linked Corporations (GLCs)
However, lack of innovation in Singapore’s economy and society
◦ Singapore a victim of her own success
◦ Too much regulation and restrictions (e.g. bankruptcy laws)
◦ Market domination of TNCs and GLCs
Too much reliance on foreign capital
◦ Need for a Singaporean core, especially in times of economic crises
Key issues so far: TNCs and
GLCs
Changing external and domestic environment threatening Singapore’s
economy
◦ Globalisation and technological advancement
◦ Rise of China and India
◦ Maturing domestic economy
Therefore, need to move up the (global) value chain in order to maintain
international competitiveness
◦ Policy shift from productivity and efficiency to fostering creativity and
entrepreneurialism
◦ Encourage start-ups culture
 Moving Forward: Beyond GLCs
and TNCs
In response, the Economic Review Committee (ERC)
was formed in 2001, which outlined several
recommendations to remake Singapore’s economy
• Chief among them is the idea of ‘a
diversified economy powered by the twin
engines of manufacturing and services,
where vibrant Singapore companies
complement MNCs, and new startups
coexist with traditional businesses
exploiting new and innovative ideas.’
Moving Forward: Fostering Local
Entrepreneurship
“We must foster the growth of enterprising startups and small and
medium sized enterprises (SMEs) ... We have to minimise rules and
procedures that stifle enterprise and discourage small players. Ministries
and statutory boards should avoid spawning companies to provide
services which private firms can provide, and crowding out the private
sector.”
(ERC, 2003: 11)

Minimise regulations for start-ups ? Lesser cost for start-ups

 How to foster local
entrepreneurship?
The Smart Nation Programme launched in 2014 by the Prime Minister’s Office and supported by
various government agencies
A key part of the Smart Nation vision is to build an innovation driven economy where technology
startups play a core role in injecting the necessary innovation and vibrancy into the tech ecosystem. 
Financial support
◦ e.g. early stage venture fund (ESVF) and various incubator schemes
Knowledge support
◦ Incubator schemes also provide active mentorship and guidance to the startups
◦ e.g. Technology Incubation Scheme
Talent support
◦ revamping the education system to support innovation and entrepreneurship, especially within
universities
◦ e.g. Entrepreneurship centres in NUS, NTU and SMU
Office support
◦ Co-working spaces and microclusters that encourage inter-firm networks and communications in
the form of traded and untraded interdependencies e.g. The HUB
Example: Establishment of
Entrepreneurship Centres in
universities
◦ Institute of Innovation and Entrepreneurship (SMU),
Technopreneurship Centre (NTU) and NUS Enterprise
◦ Receive substantial grants from the government
◦ These centres provide various initiatives to support
startups at the university level through their
incubator schemes
◦ They are thus crucial sites of Singapore’s startup
landscape
NUS Enterprise
Spatialising entrepreneurship
◦ provides co-working spaces at PGP, faculty of
engineering, and BLK71 @ Aya Rajah Crescent
Support services
◦ Funds and seed money
◦ Mentorship by companies
◦ Talent recruitment (with NUS career centre)
◦ Networking with industry players
◦ Others (e.g. tax, audit, publicity)
 Recent Updates: The Digital
Economy
• International partnerships in digital trade efforts, in
order to stay nimble in its international trade strategy
• Changing trade rules and policies to expand the digital
economy: Digital Economy Agreements with countries
like Australia, Chile and New Zealand in progress
• Areas of agreement: International rules, guard against
digital and data barriers, investment in artificial
intelligence (AI) and digital identities.
• Local level programmes like SMEs Go Digital to boost
technology adoption among SMEs.
• source: www.straitstimes.com/singapore/singapore-to
-lead-digital-trade-efforts-and-shape-new-digital-trade
-architecture-iswaran
 Recent Updates:
Economic Slowdown

Regional Economic Outlook report: IMF slashed GDP

growth forecasts for Singapore @ 0.5 per cent in
2019
Possible economic issues/solutions include: Pro-
competition production market policies; need
upgrading labour skills; measures to increase
labour supply; improving access to education; and
promoting the participation of women and the
elderly in the workforce to stay competitive in the
world-economy
Source:
https://www.straitstimes.com/business/economy/imf-cuts-spor
e-growth-forecast-to-05-for-2019
Recent Updates:
Social Challenges to the
economy
Longer-term challenges of
◦an ageing population,
◦social mobility,
◦ (Even the GDP increase it only for
certain people, some of them still not having the jobs or pay
increment.)
◦Income and social inequalities
Challenges
 Singaporeans still not entrepreneurial or creative
enough? Too risk adverse?
 Limited talent and investor pool due to small population
size, brain drain, and the dominance of GLCs and TNCs in
the labour market
 Small domestic economy, so entrepreneurs are pressured
to go regional or global from an early stage
 Too much intervention and hand-holding by the
government?
 Continual market domination by GLCs and TNCs
Summary
 Singapore’s aspirations to become a global city has impacted its
economic landscapes in profound ways
 Concepts of flows and scale important Capturing global flows
of capital, knowledge, people and its impacts on the local
landscapes of Singapore
 Changing global and local economic conditions resulted in
different industrial revolutions in Singapore
 The State continues to play a key role in the evolution of
economic landscapes in Singapore
 Successes but also challenges
Summary
 Landscapes of globalisation: how the concept of flows is
important for understanding Singapore’s global reach
 Globalisation does not mean privileging the global scale
but focusing on processes that flow across borders
 Understanding that these processes have both positive
and negative impacts (competition, creativity, security)
 Power to change landscape not just internal (i.e. state and
people, but also competition from the region, changes to
economic climate beyond Singapore).