Country Snapshot: Singapore
The republic of (Singapore in short Singapore) is a small city state in South East Asia. The state is an island with a group of islet surrounding it: it is situated south of Malaysia and north of Indonesia. Economically, it is the most successful city states contributing about ½ % of the global economy. Its economy has continuously expanded since is freedom back in 1960 where its GDP was about US$0.7 billion to 2014 attaining its highest GDP in its history of us$308 billion (International Conference on Manufacturing & In Xu 49). Among the reasons that has led to this rapid and continued growth were liberalization of the economy, low corruption and concerted efforts to improve its ease of doing business which attracted investment, rapid industrialization especially manufacturing and subsequent development of service industry. Stable legal political environment has also played an important role in this development. There are several product categories in which entrepreneurs and investors would invest in in Singapore. Three of these product categories will be discussed as well as the marketing advice one would give to people entering Singapore market.
Electronics Manufacturing and Precision Engineering (PE)
Among the industries that are highly developed in Singapore is manufacturing industry which generates about 33% of the country’s GDP. Electronic and its complementary, precision engineering (PE) are the greatest and the most established sectors of the country’s manufacturing industry (International Conference on Manufacturing & In Xu 72). Electronics manufacturing is roughly three times larger than precision engineering sector and earns the economy S$75billion per year while employing 90933 workers at various levels. Precision engineering sector employs 30311 workers. Electronic manufacturing contributes approximately 7.15% of the country’s GDP annually while combined with precision engineering contributes close to 11% of the country’s annual GDP (Kalpakjian & 21). Precision engineering is mostly evaluated together with electronic manufacturing as it is used to assemble and fabricate small electronic parts including programmable chips. This industry (electronics manufacturing and PE) is very crucial for the state economy as well as the global economy (International Conference on Manufacturing & In Xu 77).
Electronic manufacturing and precision engineering offers a unique opportunity to persons or firms intending to begin operations and/or sell products in Singapore due to a number of reasons. As far as Global environmental drivers is concerned, there is need for efficient systems with less or no emission which requires superior electronics that can are assembled and programmed to achieve these tasks. For instance, emission free cities such as Masdar city in UAE have its power and water systems ran exclusively by a system of sensors and computer chips. Additionally, assembly of equipment’s needed for environmental conservation equipment such as photovoltaic solar projects need electronic engineering and PE. The development of such projects requires more sensors and programmable electronics. For this reason, investing in this sector promises more growth and increased returns in all runs.
Singapore is a free democracy and as a result enjoys political stability. It also has an established and credible judiciary with a fully-fledged commercial courts system which ensures that the process of establishing and running a business is lawful and that not party is disadvantaged. Business contracts are protected and corruption is near zero. This makes this country a suitable one for establishing a business or investing in any sector including electronic manufacturing and PE: this country has an international trade policy framework that allows for easy and cheap importation of raw material, manufacturing and exportation. These include low or no tax on imports which lowers the price of exports in the global market, large and efficient port and monetary fiscal policies that regulate the currency without affecting banks interest rates. This will favor investors and entrepreneurs willing to invest electronics manufacturing and precision engineering. International trade and policy frameworks, economic, political and legal process all require advanced programmable chips in their computers and other devices. All these make these product category very viable opportunities for the present and the future. The evolving needs for products in this category fosters continuous innovation leading to better products and more capabilities. Innovation as well as research and development create numerous opportunities for investment and further economic development.
The Information Communication Technology (ICT)
ICT has become a crucial aid to trade in the twenty-first century. In Singapore as in other economies, it has led to reorganization and subsequent empowerment of all sectors of economy hence social and economic advancement. Singapore as an economy has embraced ICT which has increased the effectiveness of its enterprises through increased efficiency (Zhao $ Sui 34). This has subsequently increased output in sectors such as manufacturing, education, finances, tourism among others (Zhao $ Sui 37). As a result, the country has become a regional ICT hub and large corporations such as Microsoft, IBM, Google and web based service providers such as amazon.com and salesforce.com have begun their operations there (Tay & Cher 54). Many start-ups have also been begun in this area. This sector has shown the steadiest growth in the entire economy, for instance, for the five years leading to 2010, its annual revenue growth was 13%. The same period saw ICT workforce grow at a rate 5% every year to a total of 141300 employees, 74% of who worked for ICT firms and the rest for ICT consumers (Zhao $ Sui 39). The total revenue for ICT sector for 2010 was US$ 70.4 billion (Zhao $ Sui 56). ICT has a marked importance in the economic environment in that it makes the production process more efficient: for instance in the manufacturing process, the fast movement and dissemination of information saves time. ICT in banking and financial sector for instance has enabled them to decentralize services which have made services available in almost every place. It has also enhanced service delivery in legal and political system and offered a wide range of assistance in enhancing transparency. These are all areas that provide opportunities for potentials entrepreneurs or investor to venture in. ICT has enabled the development of the social media and has an important role in culture (Huang & Jon 61). This provides unparalleled opportunities for mobile apps developers, online marketing, and information sharing among others. Its role in culture extends to popularization and sharing of music, arts as well as general communication that enhance social ties.
One important niche in ICT lies in the culture of the Singapore citizens, the friendly business environment as well as the small size of the country. For this reason, a firm can produce ICT products for the neighboring countries and still be able to sell them at a competitive price to the neighboring countries.
ICT can also play a crucial role in Singapore’s legal and political system. An aspiring entrepreneur can make and market mobile apps and other services that can help the people have their freedom of speech and assembly. This falls in the area of legal political factors, peoples culture as well as the economy. The idea would focus on using ICT to assist people to express themselves in virtual platforms without being victimized. Additionally, it can be based around assisting the citizens to assemble virtually as the government restricts freedom of assemblage. A business can also effectively market its products in this country using all the channels availed by ICT as the government and other players have laid down the required infrastructure.
Singapore’s Biomedical and Pharmaceutical Industry
As the country’s economic development has is majorly based manufacturing, pharmaceuticals and biomedical chemicals has greatly grown and offers a promising future. The country’s demand for pharmaceutical chemicals is US$ 1billion: the budgetary allocation for the country’s healthcare takes up 6% of the GDP and was above US$ 12 billion in 2014 (Goodman 12). It is expected to rise to US$23 billion in 2018 (Goodman 15). This product category offers many opportunities to firms. Concerning the global environmental drivers, the country has embarked on research and development to develop ways of pharmaceutical manufacturing that has least impact on the environment. This has attracted global firms such as GlaxoSmithKline and Takeda (International Conference on Advanced Materials and Engineering Materials & In Kida 34). Singapore’s legal political environment offers a unique opportunity for research and innovation due to high level of protection for intellectual property. This product category is also attractive in terms of International trade frameworks and policy in that the countries strategic location, importation and exportation policy and research and development has provided opportunities for strategic co-operations between private labs, the government, institutions of higher learning, public hospitals, investors and entrepreneurs to develop new medicine and treatment procedures. This is done to serve both the local and the global markets and provide numerous opportunities for new entrants.
One Product that would do well in Singapore
Singapore exported approximately US$410 billion for the year 2014, Over 30% of which was electronics. This shows how important electronic manufacturing and PE is to this economy. This coupled with the advanced IT sector, one product that has a potential of doing well for this economy is mobile phones. The economy has highly developed electronic industry that can make quality phone hardware, qualified programmers who can write advanced program and ICT experts that can take care of the current trends in features and capabilities of phones and other hand held devices. The development of mobile phones would be flavored by Singapore’s favorable economic environment that would make it easy to raise capital to start. This would also generate substantial internal demands. Additionally, legal political environment that enables acquisition of raw materials will help in making the final product competitively priced. This product will also be more successful as people will be motivated to work on it owing to Singapore’s culture where people like being engaged in activities that are technologically advanced as a sign of sophistication.
The size and diversification of an economy is very important and dictates product categories including the specific products that would perform well in such an economy. In addition to this, political and legal environment, economic environment, people’s culture, global trends such as environmental concerns are very important. Any firms or investors who wish to produce or successfully market their products in a country need to consider all of the above factors. Singapore’s mix of these factors favors production and marketing of some products and not others as seen earlier. However, the strength of this economy increases the range of products that can be produced and marketed there, mobile phones are one product that can be produced and marketed in this economy as described earlier.
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