Singapore Economic Development Board’s next big thing: connections
[SINGAPORE] Singapore’s economic planners continue to scan the horizon for the “next big thing”. But this is no longer just about picking out unexplored sectors to zero in on and make winners of, as they once did with electronics, petrochemicals or biomedicals.
Rather, the next big things now are the ligaments connecting these industries: potentially disruptive technologies such as 3D printing, digital advancements, consumer analytics, supplier networks, and access to the growth market of Asean.
“What Singapore has done to date is to build up very strong industry verticals,” says Yeoh Keat Chuan, managing director of the Economic Development Board (EDB). “Competitive, they stand very well on their own. What we started doing about a year ago is, we started to look at the connections between the verticals and ask ‘Can we strengthen that?’ And as a result, ‘Can we build clusters of clusters?’
“I think moving forward, you will see a mix of approaches and outcomes,” he said in an interview with BT.
So EDB, the government’s lead agency for planning and executing Singapore’s economic strategies, will continue to explore new industry clusters, or “verticals’ in EDB parlance. But only those adjacent to the city-state’s existing strengths will be developed further.
Mr Yeoh said: “We moved into biologics. Why? Because we had strengths in pharmaceuticals. It was something of a leap. Companies said making large molecules is quite different from small molecules. But we sent Singaporeans abroad to be trained and they came back and built it up.”
There are now eight biologics facilities here – $2.4 billion worth of investment that has generated 1,700 jobs so far.
Similarly, the satellite industry, “the new kid on the block” for which $90 million has been set aside, has been identified as an emerging area of growth because the skills needed are closely related to those deployed in Singapore’s electronics, aerospace and precision engineering sectors.
Critical to Singapore’s future economy, however, are the “horizontal” planks which cut across multiple sectors. Hence this is where the bulk of the $500 million set aside for “the future of manufacturing” earlier this year in Budget 2013 will be put to work.
One type of connecting tissue all sectors would gain from is a strong regional supplier base and network. Some $250 million of the $500 million earmarked will go to supplier development to ensure local suppliers meet the highest manufacturing quality standards and to building a regional network.
“This time around, we looked beyond Singapore’s borders and boundaries. We’re a small island; it doesn’t really make sense for us to do everything here. We have to work closely with our neighbours to see how we can form a much more complementary ecosystem,” Mr Yeoh said.
Other “horizontals” include advanced manufacturing technologies that may disrupt production cycles: 3D printing or additive manufacturing, robots, Asian consumer insights, and big data.
Data analytics is one “horizontal” that extends beyond manufacturing to established services sectors here: security, healthcare, urban solutions, retail, finance, and supply chain management.
“We felt that the positioning for Singapore was to be a global hub for applied analytics enabled by data. Again, not the basic science, but the applied analytics: how to predict for supply chain management what you will need, or when engines must be sent for servicing,” Mr Yeoh said.
Earlier this year, Lenovo launched its global analytics hub in Singapore, adding to an analytics-based supply chain centre IBM launched last year, and Deloitte’s data analytics think tank set up in 2011.
The government has said it hopes to train 2,500 data analytics professionals over the next five years, but feedback from companies already suggests this may not be enough, the EDB MD said. Prioritising the “horizontals” alongside “verticals” is no sudden shift in gears, said Mr Yeoh, who rose through EDB’s ranks to become its MD last July.
After all, it has been more than four years since the lead agency for planning and executing Singapore’s economic strategies first articulated its “host-to- home” strategy – one which “is gaining a lot of traction”, Mr Yeoh said. It is perhaps EDB’s broadest “horizontal” stroke, to get global and Asian businesses to view Singapore not just as a kindly host, but a home to plunge their roots deep into, with regional headquarters, innovation and talent.
He cites examples of companies that seem to agree with EDB’s pitch. Unilever’s chief operating officer, GlaxosmithKline’s officer in charge of all markets outside of the United States and Halliburton’s intelligent completion tools business chief – they all sit in Singapore now. Applied Materials has its most advanced vacuum chambers manufactured out of Singapore, while Unilever, Sony and Samsung have also set up corporate universities or global training facilities here.
Yet, successive rounds of policy changes to slow the growth of foreign manpower over the last four years have led foreign business chambers and companies alike to voice discomfort at the reduced ease of hiring even skilled talent.
“Talent is always a critical success factor. The question for us is how do we work with our universities to ensure that they are providing the right training to meet our industry’s needs,” said Mr Yeoh.
In his view, preparing people for new jobs is also about capturing imagination and sparking a sense of excitement in Singapore’s youth over future job possibilities. That too, is part of EDB’s role, he said.