The lesson from Singapore
04 May 2009
I have two things on my agenda this week – one in Europe and the other in Asia. The second of these has been inspired by the latest column from our American correspondent, Susan Mucha, who has written an excellent ‘Focus on Singapore’. This account was based on a recent trip that was intended principally as a demonstration of how government support plus supply chain can deliver success.
The parallels between Singapore and the electronics industry in Western Europe and the US start with maturing of both technology and the local economy, in as much as Singapore is far from the low cost labour geography it once was, but that is where the parallel stops. This is because while ‘Western’ administrations have recently pledged vast sums of money to propping up their economies, Singapore has, as Susan makes clear in her article, for a long time concentrated on putting in place the infrastructure necessary to keep its electronics industry in good health.
I put it to Susan that it is easy for Singapore to create this sort of infrastructure because it was so small (only 710km²), but her response reflected the positive approach the government has taken: “I agree that Singapore’s small size does factor into why this works, but most of these companies have satellite facilities in the surrounding regions and still manage to keep that extended supply chain functioning (and their customers get the advantage of operating through a company in a country that is business friendly with ethical practices). I think the real issue is that the goal of the government appears to be listening to its manufacturing base and structuring an environment that gives them the tools they need to succeed (and that would be a positive thing for other regions to emulate).”
This has been a bug-bear of mine for some time. The investment in the manufacturing industries seems to be increasingly poor the wealthier that country gets. The real money comes from corporate ownership and the financial sector – not from making things. However, it is making things that provide real wealth as the recent financial collapse has demonstrated. The recent bail-out has been of the financial sector, not the wider economy and not directly into the manufacturing industries where it would do most good. I do believe that this should have been the time when some of the more established western governments should have looked at the bigger picture and realised that countries like Singapore have got it right – not just supporting individual manufacturers but helping to create complete qualified supply chains, even for niche products and services. Unfortunately it is long term stuff which is not the strong point of many western governments, whose world of cut-throat politics means that short-term public pleasing is more important for the opinion polls.
However, for a more in-depth account of how it can work I recommend that you read Susan’s article.
My other mention this week goes to the week’s big event, SMT in Nuremberg. With economic problems far from resolution and the swine flu health scare keeping people away from airports, this is not the best of times to be having a trade exhibition. Yet the German’s have an unfailing ability to put on a good event and this show has become one of the leading events on the global trade show calendar. Most of the leading suppliers to our industry will be there, many with their latest offerings designed to make your manufacturing more efficient and productive, so if you have the time this week (Tuesday 5 to Thursday 7 May), then it could prove to be a valuable use of time.
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