Investors still drawn to safe-haven nation - Singapore

Business Asia, Nov 2, 1998

Innovation and skilled workers vital for growth

Singapore's longstanding reputation as a safe and profitable business location means it is well placed to withstand a downturn in investment stemming from Asia's financial crisis

Even though Singapore's inward investment is expected to dip below the S$8 billion (US$4.77 billion) mark this year, that is still a significant sum given the nation's limited land and human resources.

Market intelligence agencies such as BERI and the World Competitiveness Report consistently rank Singapore among the safest and most profitable locations from which to conduct business in the Asia-Pacific region.

This year, for the first time, Singapore also came out on top in an Economist Intelligence Unit (EIU) survey of Asia's best business cities. It replaced Hong Kong, which dropped to third place. What's more, the EIU predicts that Singapore will retain its number one position for the next five years.

Meanwhile, Singapore has retained its position as the world's second most competitive country (after the United States) in the annual study compiled by the Swiss-based International Institute for Management Development (IMD).

"Because of their size, these countries have become highly efficient niche players," the IMD said of Singapore and Hong Kong, the only Asian locations in the top 15.

"Singapore's priority now is to ensure that we remain a highly attractive location for business," said Economic Development Board (EDB) chairman Mr Philip Yeo.

"For EDB, we must continue to attract both foreign and local investments and nurture promising local enterprises. Investment will flow if we have strong capabilities and first-rate infrastructure and remain cost competitive."

Mr Yeo said that for Singapore to be a "vibrant and robust hub of knowledge-driven industries", manufacturing must be innovation-driven, employment more skewed toward knowledge and workers more highly skilled.

"We already have in place schemes to encourage companies to undertake innovation projects," he continues. "For the existing workforce, we are upgrading and re-skilling workers through the Skills Redevelopment Programme to ensure they have the requisite skills to remain employable."

There is no doubt that Singapore's superior infrastructure (telecommunications, financial services, IT capabilities and so forth) plays a large part in its attractiveness to investors. For many manufacturers and traders, logistic superiority can give a real competitive edge.

"Logistics is increasingly being viewed as a competitive tool and an integral part of a company's value chain," said Mr David Chin, deputy chief executive officer of the Trade Development Board.