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Stamford Raffles of the East India Company, selected the island of Temasek (the Malay for 'sea town'; 'Singapura' is a Malay word for 'lion city') as a better location for a trading post than the island of Penang, which is located at the northern entrance of the Straits of Malacca and Raffles used a succession dispute embroiling the Sultanate of Johor to get the necessary local agreement. The birth of colonial Singapore was in 1819 and the port came into prominence with the advent of the steamship and the opening of the Suez Canal in 1869.
The Singapore Economic Development Board (EDB) announced
this month that it is stepping up its collaboration with what it terms
'multipliers' to attract global mid-sized companies and Asian enterprises to
The city state of 4.8m people, has for long been a magnet
for large multinationals and the EDB says that with the growing economic
importance of Asia, the agency is seeing more global mid-sized companies
interested to use Singapore as their base to foray into Asia, and also Asian
enterprises keen to leverage Singapore as a launch-point to regionalise and
The global mid-sized companies and Asian enterprises have
less in-house resources to drive their expansion strategies and may require
facilitation when venturing into new and unfamiliar markets. This initiative
therefore aims to ease the initial set-up of smaller companies from US,
Europe and other non-Asian countries, as well as Asian enterprises in
Singapore. These companies would be able to tap on the resources of
multipliers that offer extensive global networks and strong business support
services. It is in line with a key recommendation from the Economics
Strategies Committee earlier this year to help anchor Singapore’s
position as a key Global-Asia Hub.
"Singapore offers a unique vantage point for global
mid-sized companies to orchestrate their activities across Asia; and for
Asian enterprises to grow in South East Asia and beyond. By partnering with
multipliers, EDB hopes to further strengthen our engagement with these
companies and build on our long-standing partnerships with MNCs,” said
Dr Beh Swan Gin, managing director of EDB.
One of Singapore's key public-private sector partnership initiatives has
been the LEAP program,
which stands for the Locally-based Enterprise Advancement Program,
co-fund the operations of private sector organizations that play the roles
of multipliers. These multipliers help nurture Singapore-based enterprises,
by attracting foreign enterprises from abroad, and by developing new and
existing industries. LEAP also encourages and supports these multipliers in
developing their capabilities and to carry out new activities that can
generate substantial economic spin-offs for Singapore.
Up to 50 multipliers come from a wide-range of industries,
including multimedia, assistive technology and disruptive technologies. In
addition, there are also multipliers from Korea and Europe.
Collectively, the LEAP multipliers support more than 700 enterprises in
ODM Innovations Pte Ltd for example, was founded in April 2006
as a LEAP Partner with EDB. Its
vision is to provide a platform for Singaporean innovators, designers and
companies with new and innovative concepts to develop into a commercial
product. It aims to drastically reduce the cost in product development for
innovators, designers and startups in the form of product design,
prototyping, mass production as well as marketing.
American Scott Anthony who is managing director of another
multiplier, Innosight Ventures,
recently wrote on the Harvard Business Review
blog that, "Governments
often feel that their role is to invest in cutting-edge
technology. However, new-to-the-world technologies that
promise never-seen-before performance won't have much impact
in emerging markets. Instead, these markets need 'great
leaps downward' - - simplifying and cost-reducing technologies
that promise to open up historically locked markets."
The Singapore Business Federation (SBF) has become the first
multiplier of the Global-Asia Hub program and it can provide ready turnkey
services for new foreign companies through business partners across venture
capitalists, financiers, consultants and research institutions. "SBF will
seek out companies with innovation and knowledge-intensive activities,
especially those with strong intellectual properties,” according to its
Tony Chew, chairman of SBF.
The nine other 'multipliers' - - set-ups with strong business support services
or global networks - - will likely be country chambers such as the
Singapore-German Chamber of Industry and Commerce, EDB said.
A particular attraction of Singapore, apart from its famed
efficiency and its intolerance for corruption, is its protection of
EDB partners SBF to attract global mid-sized companies and Asian enterprises to Singapore. A Memorandum of Understanding (MOU) was signed between Dr Beh Swan Gin, MD of EDB (l) and Tony Chew, chairman of SBF, on Oct 06, 2010.
Last month, Singapore’s deputy prime minister and
minister for defence, Teo Chee Hean,
said the Lion City has attracted about 26 innovative foreign infocomm start up enterprises,
bringing in more than SG$50 million
(US$37.5 million) of investment and
creating 260 high-level jobs in the past
The start-ups, from the US,
Israel, Sweden and China, have
established engineering centres on the
EDB's Dr. Beh said on the strategy of attracting smaller enterprises: "We want them to know that
Singapore welcomes them even if their initial presence may be small, such
as a small sales or representative office."
Also this month, Singapore announced that it would invest S$3.7bn
(US$2.86bn) in biomedical
sciences research for the period 2011 – 2015.
Today, over 100 global biomedical sciences companies are based
on the island
and BMS manufacturing output for 2009 was
S$21bn, up by more than three times from S$6.3bn in 2000. In terms of BMS’s
share of Singapore’s total manufacturing output, it was 10% in 2009.
Irishman Declan J. Mansfield, who is based in South-East
Asia and Australia, has been in Singapore in recent days discussing funding
for biomedical products and he says in relation to the comparison of
Singapore and Ireland: "The difference between the 2
governments leads me to believe Ireland is in denial about its loss of
capacity, will, and financial ability to create a new Innovation Center for
Pharma other than as - - -a pass-through economy -- for Big Business profits
Exports from Big Pharma and medical device firms in Ireland
account for more than 50% of merchandise exports and in the period
2004/2009, exports from the sector increased by 25% but there were few jobs
The Big Pharma firms face losses of revenue of $100bn in the
next 5 years from patent expirations.
Expect a slowdown in Singapore's economic activity going forward, notes Selena Ling, head of treasury research & strategy from OCBC Bank. She tells CNBC's Lisa Oake and Bernard Lo that 2011 will bring about a return to more normalized growth levels.
Economy and Change
Singapore's economy plunged 9.5% from peak to trough during
the global recession and following growth of 18% in the first half of 2010,
there may be a technical recession in H2 but for the year, the growth is
expected to be about 15%.
trade to GDP ratio is the highest in the world at more than 450%.
Morgan Stanley economists say
policymakers intend to capitalise on the three secular trends of
urbanization, ageing and growing affluence, which would be manifesting most
prominently in Asia.
While Singapore may not yet have the solutions or
products catering to such emerging trends in the region, the idea is to
provide a platform in Singapore to bring together the public, quasi-public
and private sectors to test-bed and co-develop relevant products, which is
hopefully then scalable and exportable to global markets.
While the strategy
is laid out, issues still remain - - policymakers need to develop the unique
selling-point which would entice corporates to come to Singapore rather than
to test-bed ideas elsewhere in Asia. Moreover, after the test-bedding phase,
the difficulty also lies in identifying the part of the production
value-chain which Singapore can fit in and profit from. Just as some of
these mega trends are emerging, relevant industries in Singapore are also in
the infant stages and where expertise is absent; it would have to be
developed for the value to be milked.
The Infocomm Development Authority of Singapore (IDA) estimates that Singapore needs 10,000 more tech
workers each year, of which half will have to be met by importing foreign workers.
The authors say
that a key lesson from Israel is that innovation
is not just something that goes on inside
companies; it comes from a wider culture that
fosters both innovation and entrepreneurship.
Israel is a country of immigrants — there are
over 70 nationalities represented in this tiny
country. Two out of every three Israelis are
newcomers, or the children or grandchildren of
newcomers. The Israeli battery-operated car grid
company Better Place was founded by the son of
an Iraqi immigrant. The Israeli company Koolanoo
- - the third-largest social networking site in
China — was founded by the child of an Iranian
immigrant. The Internet music start-up FoxyTunes
— which was recently sold to Yahoo for tens of
millions of dollars — was founded by a young
Ukrainian immigrant. Walk around Israeli
neighborhoods, and you’ll find yourself dealing
with Israelis from Ethiopia, Poland, Yemen,
Russia, and Australia, to name a few.
Immigrants are natural risk takers since they
were willing to uproot themselves and start
over. In particular, the great wave of
immigrants from the former Soviet Union in 1990
to 2000 brought to Israel a tremendous boost in
engineering talent just as the tech sector began
to take off. Israel is also the most
pro-immigration country; politicians there
actually compete with each other with campaign
promises to bring in more immigrants, not fewer.
Singapore, which seceded from the Federation of
Malaysia in 1965, has had a record of success and there is a little doubt
that it will continue to be among the winners.
“Many Russian companies look at Singapore as a gate to the Asian money,” Andrei Sharonov, managing director of Toika Dialog, told CNBC: