Diversifying the economy Venturing abroad Managing resources efficiently

1. SEQ: Which of the following is the most important strategy in helping Singapore to overcome challenges brought about by Globalisation? Diversifying the economy Venturing abroad Managing resources efficiently

2. Challenges brought about by Globalisation. Bring this up in INTRO • Intensive competition from other countries. E.g. China + India • Economic problems in other countries affecting Singapore • Increase mobility of people and companies -lead to brain drain? Companies outsourcing to other countries? • Local access to foreign goods may reduce the size of the local market for local producers.

3. Diversifying the economy • Important strategy that ensures that the Singapore economy is not over-reliant on a particular area. • Examples: • Diversify manufacturing to include technologically intensive, high value-added activities such as chemical engineering and pharmaceuticals. Venture into Life-Sciences, build up on Research and Development. A*STAR and IMCB. 2010: Bio-electronics • Tourism • Regional Hub for Education • Financial + modern services hub • Leading consumer business centre etc

4. Diversifying the economy • Analysis? How does diversifying the economy with the above examples help to overcome challenges brought about by Globalisation (this is also the link) • By diversifying itself into different secondary and tertiary sectors, this strategy ensures that Singapore is not overly-reliant on any particular area, such that the economy is still sustainable even if one sector collapses, or if the work is outsourced to other countries. • By re-inventing herself, Singapore ensures that she is always up-to-date and in tuned with global trends, so as to leverage on the positive forces of Globalisation, rather than be eliminated by other competitors.

5. Venturing Abroad • Due to Singapore’s limited land, labour resources and market size, Singapore has to look beyond its national boundary to achieve further growth. This can be achieved through regionalisation, through investing in nearby countries that have abundant land, lower labour costs and new markets. This is important as Singapore companies are also competing with foreign companies and it is restricted by the small market size in Singapore. • E.g. Singtel expanding into regional markets in Thailand.

6. Venturing Abroad • Moreover, Singapore needs to spread its investment around the world to ensure that Singapore’s economy is maintained even if one region is weakened. • -Investing in new markets such as Middle East, Africa, Latin america and Central and Eastern Europe. • -Also investing in China: Suzhou Industrial park 1994 • -and in the International Tech Park in Bangalore India.

7. Venturing Abroad • Analysis: As globalisation has brought about the movement of MNCs around the world, Singaporean companies also have to venture abroad to benefit from the ‘comparative advantage’ that some countries, such as India and China have in terms of providing low cost labour; and to play a bigger role in the regional and international market once the Singapore national market becomes saturated, in order to yield greater revenue for Singapore, which in turn will give it the means to upgrade its infrastructure such that it still remains appealing to overseas investors. Venturing abroad to diverse regions also ensures that Singapore is somewhat cushioned from global recessions that tend to affect Western developed countries more.

8. Managing resources efficiently • Management of human resources is the most important strategy in helping Singapore to overcome challenges brought about by Globalisation. • Crucial for Singapore, as human resource is Singapore’s only resource. • Need to ensure that people have the right skills and minds to thrive in a globalised world • Also need to instill in Singaporeans a strong sense that Singapore is home. To prevent brain drain.

9. Managing resources efficiently • Example: Government needs to be appreciative of talent and come up with various methods to stretch and nurture these talents. So as to prevent a brain drain from occurring due to the perception that Singapore is unable to nurture its talents. Provision of scholarships. + attracting foreign talent. • E.g. promoting entrepreneurship and technopreneurship to develop talent. National productivity fund – provides funds to support industry • E.g. Promoting continous learning for PMETS and workers. (Singapore Workforce Development Agency est in 2003) Programmes like employability skills system (ESS) to equip and upgrade skills of workers.

10. Managing resources efficiently • Analysis: • Extremely important that Singapore manages its resources efficiently. Ensures that workforce is up-to-date and competitive, so as to lessen the chances of MNCs outsourcing to another country due to superior workforce in the other country. • Needs to develop its own human resource rather than be reliant on foreign talent which might be more mobile in that they have no emotional ties to Singapore. • Therefore, need to ensure that Singaporeans are not only well-trained and skilled, but also have the commitment to Singapore, and have the desire to see Singapore progress further.

11. Conclusion • Managing resources efficiently is the underlying and therefore most important factor. Without skilled and a flexible workforce, Singapore would not be able to diversify its economy as this requires re-training of workers and constant up-grading of skills. Like-wise, it is not possible to venture abroad if Singaporean companies do not have the resources to not only manage the national market, but also the capabilities to manage the regional and international market. This requires a talented workforce which is comfortable in working in different cultural environments, and have an open-mind towards adapting to local conditions.