An International Comparative Analysis
New Horizons in the Economics of Innovation series
Chapter 4: The Singaporean Model of Increasing Government Intervention
Although a small city-state with a population of only 3.9 million and with practically no natural resource endowments, Singapore has shown spectacular economic results. These economic results have very often been attributed to the non-interventionist nature of its government and have largely emanated from the operations of numerous foreign-owned companies whom the Singaporean state has encouraged. While this may be true, increasingly the government has resorted to interventions, especially in the area of technology development.1 The primary purpose of this chapter is to survey the various instruments that the state has put in place to encourage local technology development even by aﬃliates of MNCs. I propose to discuss the issues in three main sections. In the ﬁrst, I present some basic and distinctive features of Singapore’s manufacturing sector. The second section focuses on the end result of its innovation policies and the third one analyses the various policy instruments and institutions that would have contributed to this end result. A summary concludes the chapter. THE ENTERPRISE SECTOR IN SINGAPORE The country has a very eﬃcient manufacturing sector (Table 4.1). The manufacturing value added has been growing at a rate of 8 per cent per annum during the mid-1990s. During the same period there has been much productivity growth and consequently the unit business cost has been decelerating at a rate close to 2 per cent per annum. The sector is also very export intensive with about two-thirds of the total sales revenue being from export sales. There are...
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