Since the 1970s, Singapore’s industrial policy consistently intensified private sector participation in the industrialisation process by promoting spending for industrial developments through generous fiscal incentives. In addition, the government also focused on the privatisation of industries and provided a strong functional framework for private sector-led industrial development. In spite of fierce competition both regionally and globally, the country’s private sector expansion gave rise to efficient industrial development in sectors such as shipbuilding and petroleum refinery (Huff, 1995; Kim and Lau, 1994). By early 2000s, in the midst of ever-increasing private sector expansion, Singapore became one of the world's largest manufacturers of disk drives, refrigerator compressors and computer peripherals with about 6000 MNCs. These MNCs are now responsible for about 75 percent of Singapore's manufacturing output and 80 percent of the country’s exports (Goh, 2005; Tan, 1995; Huff, 1994). With branches and subsidiaries in Singapore, the MNCs had also expanded their scope of business over the years beyond mere off-shore manufacturing to other areas like merchandising, logistics management, customer support services, financial management and regional procurement. To foster new economic activities through greater private sector expansion, the government outlined the Industry 21 vision to supplement the country’s present role as a manufacturing base for MNCs and a services hub for regional economies . Hence, indigenous firms were encouraged to participate in large-scale industrialisation projects in an attempt to help nurture them to be global MNCs. The government realised that for Singapore’s future economy to be sustainable over the long-term, indigenous firms must be more actively involved in industrial investments and should also own a major proportion of the private sector’s wealth. With Singapore’s GDP reaching US$93 billion in 2003, the country’s sizeable economy is now ready to embark on high value-added industrial development for the manufacturing sector and to further diversify private sector expansion into other knowledge-based sectors.
Due to growing global competition, Singapore’s government decided to promote efforts in developing entrepreneurial capability. For instance, various industrial policies were introduced to change the mindset of the population with themes like “educate for entrepreneurship” or “be an entrepreneur”. Industry-wide initiatives such as the Technopreneurship 21 Plan were implemented to support the goal of building a culture of entrepreneurship centred on technological innovations . With a strong governmental commitment to enhance entrepreneurial opportunities for industries such as data storage, healthcare, logistics, multimedia, microelectronics, wireless communications and manufacturing technologies, the country mounted ambitious programmes to raise competence levels of entrepreneurship, in technology-based industry sectors, to international standards (Liao and Chew, 2000; Young, 1995; Chew and Goh, 1993; Krause, 1987). Because the domestic market was also too small and over-saturated to sustain long-term economic growth, the government also embarked on a regionalisation drive to develop an "external economy" by encouraging Singaporean firms to hone their entrepreneurial capabilities abroad (Tan, 1995; Lee, 1992). Notably, it was widely acknowledged that indigenous entrepreneurs possessed limited capability in gaining access to foreign markets since they knew little about foreign preferences and business environments, distribution systems and regulatory frameworks. To kick-start the regionalisation efforts, the government also jointly developed Singapore-modelled industrial parks with countries like China, India, Indonesia and Vietnam. Learning from the experience of MNCs, Singaporean firms increasingly began to operate their businesses in these countries to enjoy economic factors of production and to explore new markets. One case in point was Singapore's involvement in the co-operative partnership to develop new economic zones such as the Growth Triangle . These industrial policy initiatives are also very timely as almost all Asian economies around the region are beginning to adopt more open-door industrial policies to accelerate the industrialisation in aid of economic development.
With the country's industry structure continuing to diversify into sectors that are more technology-intensive, knowledge-based and higher in value-added output, the government began in the late 1990s to focus on developing high-tech industries (e.g. wafer fabrication plants and pharmaceutical plants). Realising that technological progress is crucial for industrial growth, there was a concern amongst the bureaucrats and academics that Singapore’s economic growth based heavily on factor accumulation would not be sustainable (Bloch and Tang, 2000; Kim and Lau, 1994). Instead, there is growing demand for developing industries with a high knowledge and technological content. Since the early 1990s, the government has been making continuous efforts to transform the entire economy into a knowledge economy . As the MNCs have already provided a strong inflow of technology to Singapore, a key objective of its industrial policies was thus to root them in the country to deepen the industrialisation process in tandem with its long-term economic and technological advancement. However, in recent years, Singapore’s government has started to invest heavily on indigenous technology development. Industrial policies are thus implemented to build a network of industrial assets and capital-intensive investments to provide the potential for technology acquisition, transfer and development. T o increase industrial growth through the creation of new technological innovations as what the Americans, Europeans and Japanese have succeeded in doing for several decades now, an Innovation Development Programme  was launched to support Singapore’s vision of becoming an innovation-driven knowledge economy. Incentives such as tax exemptions for workers’ training are used to upgrade the country into an economy that builds its own indigenous innovations rather than on imports of ready-made technologies through the foreign MNCs based in Singapore. The government also understood that industrial development would increasingly depend on its ability to transmit, adapt and commercialise scientific and technological knowledge than on factor accumulation (Young, 1995; Huff, 1994; Kim and Lau, 1994). Hence, to further accelerate technology inflows, the Singapore’s government adopted industrial policies that favoured liberalisation, for example, in the telecommunications sector (e.g. cellular phone and radio-paging services). Other policies urged the information and communication technology sector to engage in licensing of foreign technologies and the use of advanced process technologies and process management capabilities (Wong, 2002). These policies helped the economy to leverage technology-based capital investments and technology transfer arrangements to secure further industrial growth.
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