Lions and tigers

Singapore (from Malay words singa – lion – and pura – city) was named after a lion that a 14th century Sumatran prince thought he saw when he came ashore on the island after a thunderstorm. But there have never been lions in that part of Asia – it was probably a tiger, which is entirely appropriate for one of the four ‘tiger economies’ of the Far East. The long British involvement began in 1819 with the establishment, by Sir Stamford Raffles, of a trading post on behalf of the British East India Company; at the time, the population was estimated at 1000. The Colonial era ended with Singapore’s independence from the UK in August 1963. It initially joined the Malaysian Federation but was expelled two years later, when policy differences came to an intractable head. With a total area of just over 600 square kilometres, little in the way of natural resources – including water – it had to be pretty innovative when it came to building an economy. Reclamation projects have raised the land area to just under 700 square kilometres, but it still imports around half of its water needs from Malaysia and Indonesia and it has no oil, coal or gas.
Newly-independent Singapore was poor, with mass unemployment and abysmal housing. The government of prime minister Lee Kwan- Yew implemented an intensive public housing programme and attacked mass unemployment through attracting foreign investment and by building on its international trading history and links. Its deepwater seaport is one of the busiest in the world. The ‘tiger economy’ of the 1990s was based on electronics and technology; that came to a shuddering halt in 2001 and its economy was further hit by an outbreak of the SARS virus, which saw tourist numbers plummet. The economy shrunk over two per cent in the period immediately following. What happened since then has been an astonishing story of turnaround, powered by a massive shift in its economic base.
Singapore’s current population is over 4.5 million (July 2007 estimate). It’s skewed a bit towards older age groups – a legacy of the policy, established in the 1960s, of small families and widespread contraception. That has been reversed and people of all ethnic groups are encouraged and incentivised to have children. GDP in 2007 is estimated at US$134.2 billion in straight official exchange – just $9 billion less than Malaysia. GDP per capita, at US$29,474, according to the Singapore Department of Statistics, means it isn’t a cheap labour location – it’s twice Malaysia’s, for example. That presents something of a challenge in a region where low-cost has been one of the attractions.
When the Economic Review Committee was established in 2001, it recommended a number of policy changes to revive the economy. The core planning tool continued to be the Enterprise Development Board (EDB), which was set up in 1961 with the brief to convince foreign investors that Singapore is a good place to do business. The early inward investors were labour-intensive industries such as textiles, toys and wood products. But the foundations of high-tech and knowledge-based industry were there, too, with Shell Eastern Petroleum and the National Iron and Steel Mills. By the time of the high-tech crash, the city was already a global leader in electronics and it still is today: with 80 per cent global market share in hard disks and 25 per cent of magnetic media. It also has 16 wafer fabrication plants. It’s the world’s leader in jack-up oil rig production; has the largest maintenance and repair operations centre for aviation in Asia; and is the largest liquid natural gas vessel repair location in Asia, outside of Japan. Jurong Island is now a worldclass integrated chemical hub and has more than 100 chemical manufacturing plants. Ten leading pharmaceutical companies – including Glaxo- SmithKline (GSK) – have facilities in Singapore, and there are no less than 25 pharmaceutical and biotech R&D centres.
Singapore is physically very well placed to serve the emerging markets of the Far East but location on its own isn’t enough. It has a transport system many other cities would give their eye teeth for: it’s had congestion charging in place for years, and an efficient mass transit system to go with it. Its IT infrastructure and longestablished financial expertise have attracted companies like IBM and Volvo to set up major logistics operations – along with more than 3,000 others, including the majority of the world’s thirdparty logistics providers.
Cadbury Schweppes announced in August 2006 that it was investing US$2.7 million in a new 920 square metre R&D centre in the city, to develop lines and flavours specifically for the Far Eastern markets; sales in the region grew by over 50 per cent in 2002 to 2006. In April the same year, Tate & Lyle officially opened a £100 million plant to manufacture Splenda sucralose, a nocalorie sweetener made from sugar and invented by Tate & Lyle in 1976. The plant is its largest-ever investment in Asia and is only its second Splenda production facility in the world. In February this year, Rolls-Royce plc broke ground on its £100 million-plus ‘factory of the future’ at the Seletar Aviation Park. The company is already one of the leading players in Singapore’s aviation industry, accounting for 15 per cent of the country’s total output and five per cent of employment in the sector. The new plant will assemble and test engines in the Trent series for Boeing’s 787 and the Airbus 350 XWB, for supply both to manufacturing plants in the Middle and Far East and to customers – Singapore Airlines is a longterm Rolls-Royce customer.
Since 2001, Singapore has actively sought to expand its economy into new and emerging technologies. One of the first to open in Biopolis, established in 2003 as a hub for research and development in bio-medical science, was GSK, with a pre-clinical research facility for neurodegenerative diseases. It’s the first time the company has opened in the Asia-Pacific region and, in June 2007, the company announced that it was extending the facility with a new medicinal chemistry laboratory.
Singapore intends to be a global centre for development, production and export of clean energy products and has a comprehensive state investment package. In 2007 the government announced a S$350 million (approx £140 million) support package for the emerging industry, with the emphasis on solar energy.
In addition, a $50 million ‘competitive funding’ initiative is intended to speed up clean energy R&D; scholarships worth $25 million over five years will train specialists in clean energy. Renewable Energy Corporation, the leading integrated solar company in both its native Norway and the world, is establishing the world’s largest solar manufacturing plant in Singapore, an investment worth S$6.3 billion (circa £2.9 billion). Its fellow-European company, Oerlikon Solar, will shortly be opening a new R&D hub in the city.
Water is an ever-present consideration for Singapore and it’s investing S$100 million in its Environment and Water Research Program. Siemens Water Technologies has already invested over £20 million in a water R&D centre there; General Electric Water & Process Technologies is following suit, with a £55 million global R&D centre. The objective is that industries connected with natural resources will be worth three per cent of GDP by 2015 and it will be recognised as a natural resource hub for Asia.
There’s too much going on in the areas mentioned and in mining; metals, minerals and materials; genetic and other biosciences; nanotechnology at the NanoFrontier Incubation Hub; and even sports and leisure, to desc r ibe. In 2007 alone, the EDB secured 400 new projects to create nearly 29,000 new jobs; the leading inward investors were European, with 52 per cent of the total. The incentives Singapore offers are clearly attractive; the existing education standards are high and the government is investing to raise them further, so the workforce is skilled. It has outstanding infrastructure, both communications and physical. And most crucially, in a region of the world where copyright is felt to be honoured more in the breach than the observance, Singapore established an Intellectual Property Office in 2001, with the intention of enforcing strict IP protection, and the IP Academy, which provides education and training both of people and as a resource for patent registration.
“We knew we needed to expand our manufacturing operations and we could only do so somewhere that the IP laws were robust, reliable and understandable,” said Gajus Worthington, founder, president and CEO of Fluidigm, which designs and makes biochips. “We needed to recruit from a local skills and talent base. Also, there’s the issue of cost. Most places in the world where there is that skills base – the Bay Area; Boston, Massachusetts; and Europe – are very expensive. Singapore may not be the lowest-cost manufacturing area, but it is significantly less than the other choices.” What about managing a remote manufacturing location? “We felt the risk was manageable, given the level of support from the Singapore EDB (Economic Development Board).”