Singapore Local Economic Development: The case of EDB For the City Economic Development: The Agency Question World Bank HQ, 14-15 May 2008 Dr Belinda Yuen Presentation outline Introducing Singapore Why EDB? Who is EDB? What does EDB do? How does EDB promote LED? Concluding remarks 2 1
Introducing Singapore City-state of 699 sq km Population of 4.6 million (3.6 million resident population) Labor force of 2.3 million Unemployment rate of 3.4% Per capita GDP S$44,666 (2005) Asia s most competitive economy; Asia s no. 1 place to live, work and play; World s easiest place to do business 3 4 2
Why EDB? 5 Like many other developing countries 6 3
Development Problems (1960s) High population growth: 4% p.a. Stagnant economic growth Rising unemployment: 13.5% of labor force 7 Development Challenge How demand for housing and employment could be met UN mission estimates the need to create 214,000 new jobs (50% increase in workforce) for 1961-70 And a further 40,000 jobs with the British troop withdrawal during the 1970s 8 4
Policy Goal to achieve a society where all citizens could have a decent living by providing jobs (and rising incomes) for everybody who was willing and able to work through continuous and rapid economic growth 9 Development Imperative A bold and comprehensive program of industrialization is needed Labor-intensive industries are prime target BUT Singapore has no industrial tradition, capital or manpower 10 5
Problem-Solving Model Economic Development Board (EDB) set up in 1961 to spearhead industrialization program, to create jobs and promote economic development 11 Who is EDB? 12 6
Introducing EDB EDB is Singapore s 1-stop and lead agency for planning and executing Singapore s economic development strategies Established by Act of Parliament-Economic Development Board Ordinance 1961 Has extensive power and functions for industrialization promotion and economic development 13 Responsibilities Functions streamlined to concentrate on investment promotion in 1968 industrial financing moved to DBS Industrial land and estate development to JTC Responsible for economic development of Singapore To create sustainable GDP growth for Singapore To create good jobs and business opportunities for the population 14 7
Vision To promote Singapore as a compelling global hub for business and investment Singapore as a Total Business Centre Singapore as gateway to Asia Investment promotion worldwide: 19 offices in N America, Europe and Asia Goal to double Singapore s total manufacturing output to S$300 billion and annual manufacturing value-added to S$80 billion by 2018 15 Organization Chairman Managing Director Global Operations Planning & Policy Industry Development New Businesses Corporate Development 16 8
Statutory Board Autonomous government agency created by special legislation to implement specific socioeconomic development Legally separate from civil service Answerable to reporting Ministry Operating budget comes from reporting Ministry Allocated operating grant of S$107.7 million (FY2006) 17 What does EDB do? 18 9
Services Provide extensive range of programs, policies, incentives and schemes to attract 3 target groups: Investors Startups Individuals QuickTime and a decompressor are needed to see this picture. QuickTime and a decompressor are needed to see this picture. 19 To investors Strong and stable physical, legal and social infrastructure Pro-business policies and tax regimes Wide range of flexible financial schemes Highly skilled domestic labor force and easy entry of foreign talent Expanding network of free trade and investment guarantee agreements 20 10
To startups Information and networks Market opportunities Work pass Financing options 21 To individuals Global Investor Program Connect foreign investors with local business networks Immigration facilitation for individual s entry and stay in Singapore 22 11
Achievement (FY2006) Projected commitment levels to be S$8-8.5 billion of fixed asset investments in manufacturing and S$2.5-2.7 billion of total business spending in traded services Achieved S$8.8 billion commitments in manufacturing investment and S$2.8 billion in new business spending from service companies Contributed to >40% of Singapore s GDP 23 How does EDB promote LED? 24 12
Economic Development Planning Work closely with MTI to provide long-term planning and strategic industrial trends and target industrial sectors Work with other government agencies to coordinate development, e.g. JTC to provide adequate supply of industrial land and estate in right location for target industries Manpower ministry, polytechnics, universities, etc on manpower training for target industries 25 26 13
Active Engagement Provide incentives and schemes to attract investors to Singapore Awards programs to recognize investor contributions e.g. Distinguished Partner in Progress Award, Friends of Singapore (Business) Award Invest in projects to produce the necessary manpower, skills and technologies for industries, e.g. Skills Development Fund EDB Investments Pte Ltd 27 Approach, evolving to stay competitive Not only MNCs but also SMEs Not only in Singapore but also in the region To capitalize on regional growth opportunity To transcend Singapore s domestic constraints Senior Minister Lee Kuan Yew: successful mature economies have this external dimension which broadens their domestic operations and helps them to upgrade their economy' 28 14
Strategies Strengthen industry clusters Identify and grow new clusters e.g. diversification to services, clean energy, water Nurture innovation-driven enterprises Develop new geographies Make Singapore environment conducive and competitive for global business 29 Industrial Transformation Source: Seetoh and Ong, 2008, p116 30 15
Concluding Remarks 31 Key Learning Points Clear and strong government support Empowered institutional framework Clear vision and mission committed to deliver, courage to dream and bold in design Capacity to change Know the trends, innovate and quick adjustment to changing times 32 16