Cluster growth initiatives, especially in high technology industries, are part of many countries’ attempt at developing a competitive edge in the global market. This chapter describes and analyses how Singapore attempts to develop three specific high technology clusters – media, aerospace engineering, and alternative energy. It highlights and examines the strategies used to promote cluster growth. It also discusses the different roles of the government in promoting high technology cluster growth and some of the challenges Singapore will face in moving forward in this journey.
Top2. Cluster Growth Strategy In Singapore
Singapore has a very impressive economic growth record since independence in 1965. Today, it has one of the highest per capital GDP in the world. However, because of global competition, the economy must continue to develop and replace the outdated strategies that were once successful. One of the recent economic strategies for Singapore to break through its economic development model of the 1990s is to focus on growing high technology economic clusters. Technological advancement affects many areas of modern society, including communications, education, health care, business, and even lifestyle (read, for example, Drucker, 1993, 1998; Greider, 1997; Ohmae, 1990, 1995; Poster, 1990; Postman, 1993; Webster, 1995). High technology fits into Singapore’s agenda very well because Singapore does not have natural resources or adequate land. Such economic clusters are able to create value significantly based on advanced knowledge creation, utilization and dissemination. Focusing specifically on high technology growth cluster initiatives is a strategic move on the part of the government to systematically respond to the emerging economic situations that the nation faces. Old factories are phased out. New ones based on high technology are initiated. Prime Minister Lee Hsien Loong, in his speech to the Parliament, explained,
…we have to ask ourselves how we can deploy our resources to maximum effect. Singapore is a small population, land is finite, and our resources are finite… so what can we do? We have to make judicious trade-offs - recover land from less productive and declining industries, make space for new industries which are bringing in better jobs. (Lee, 2009)
In 1994, a S$1 billion Cluster Development Fund (CDF) [US$1.00 approximately = S$1.25], managed by the Economic Development Board (EDB), was launched to catalyse these high-growth clusters (Ministry of Trade and Industry, 2010). According to Lee Yock Suan, former Minister for Trade & Industry and 2nd Minister for Finance, the objectives of the CDF are (Lee, 1997):