SINGAPORE’S INDUSTRIAL DEVELOPMENT

Labor-Intensive Industries (1960s – Late 1970s)

Open to Multinational Companies
- Welcoming of investment and setting up of companies by MNCs

Incentives to Attract Foreign Investors
- Economic Development Board (EDB) visited 2000 companies overseas
- Cheap labor
- Pioneer Certificates were offered toe industries that manufactured new products not previously made in Singapore, or not produced in sufficient quantities
- Exemption from the standard 40% tax for 5 years or more
- Training subsidies and duty-free imports
- Government stability

Industrial Peace
- Labor law passed in 1968 to maintain industrial peace

Labor Costs and Working Conditions
- National Trade Union Congress (NTUC) formed as a federation of trade unions
- Its role being to improve the working conditions of workers and to promote good working relationship between the workers and employers
- Provision of training opportunities for skill-upgrading
- Labor law increased working hours and reduced public holidays
- Labor cost was cut down by reducing worker benefits
- National Wage Council made recommendations on wage

Technical Education and Skills Training
- Training institutes were established, often with the help of other developed countries
- Technical education was introduced in schools

Location of Industries
- Careful urban planning to fully utilize limited land space

Transport and Communication
- Transportation network improved
- Singapore became a major telecommunications center

Banking and Financial Services
- Development Bank of Singapore set up
- Foreign banks set up branches in Singapore

Industrial Restructing (Late 1970s – 1980s)

Serious Labor Shortage
- Small labor pool
- Foreigners were allowed to work in Singapore, mostly in unskilled sectors

Competition from Other Countries
- Many developing countries are also industrializing
- Other countries had a large population and hence labor cost is kept even lower
- Singapore’s productivity was lower than Taiwan and Hong Kong

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Higher Wages
- Mechanization, automate, computerize as a result of higher wages

Productivity Campaigns
- Advertisements and commercials

Change of focus in Education and Skills Training
- New industrial training institutes were jointly set up by the government
- Engineering intake was increased

Increased Emphasis on Research and Development
- Establishment of Singapore Science Park
- Tax incentives are given to manufacturing firms involved in Research and Development
- Funds provided to local companies for R&D

New and Better Industrial Facilities
- Wafer fabrication parks in various places
- Upgrading of buildings and infrastructure in older industrial estates
- JTC building of special industrial buildings and facilities

Better Support Services
- Changi Airport
- MRT
- Telecommunication links of Singapore upgraded annually
- Other support services (banking, advertising)