Chapter 11: Singapore's Economic Landscapes: Local Transformations and Global Networks
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196 11 Singapore’s Economic Landscapes: Local Transformations and Global Networks Karen P.Y. Lai Introduction With its geographically small land area, maritime positioning and few natural resources, Singapore’s historical role as an entrepot means it has always been dependent on its external networks for survival and prosperity. This outward-looking attitude continues to guide the country’s economic development policies through the challenging periods of post-independence. But more than ensuring its survival as a young nation-state, the economic development strategies of Singapore back then also highlighted the increasing significance of cities as engines of growth and in changing the economic and urban dynamics of countries and regions around the world. The vision for Singapore to achieve global city status was articulated as early as 1972 (refer to Chapter 5) but it was only in the 1980s that global connectivity and interdependence became a reality, driven by information and communications technology (ICT) innovations and the surge in cross border activities of transnational corporations (TNCs). These ICT innovations, changes in TNC activities and responses to regional and global competition are reflected in the different phases of economic and industrial development that have taken place both within and beyond 11 C-Landscapes.indd 196 7/30/13 10:39:54 AM Singapore’s Economic Landscapes 197 Singapore’s borders as the nation-state continues to capitalise on its regional and global networks. This chapter maps out the economic development of Singapore from a labour-intensive manufacturing hub, to a regional centre for advanced manufacturing and headquarter functions, to one that is now an important node of financial services and research and development (R&D) activities. Singapore currently enjoys a widespread image and reputation as a global city. Such success has been due to its role as a command and control centre for coordinating financial flows and business activities. However, while this shift from manufacturing to service-based economic activities reflects Singapore’s effort to remain relevant and competitive in the global economy, there continues to be a strong commitment to maintain high value-added manufacturing activities as a pillar of Singapore’s long-term economic growth. The organisation of the chapter is as follows: the next section introduces key concepts for understanding the globalisation debate and the importance of global cities in facilitating and managing global flows of capital, people and ideas. This will set the conceptual basis for examining major developments in the economic landscapes of Singapore from post-independence (1960s) to the contemporary period (2000s). The final section highlights future challenges to economic development in Singapore. Globalisation and Global Cities While there are continuing debates surrounding the mechanism, agency and impacts of globalisation (see Jones 2010), one of the most influential works remains. Held et al.’s (1999) now classic characterisation of the three “schools of thinking” on globalisation: the hyperglobalist, sceptic and transformationalist positions. The hyperglobalist stance is characterised by the view that contemporary globalisation represents a new epoch in human history in which everyone is increasingly subjected to the discipline of a global marketplace. This is championed by business and management gurus such as Kenichi Ohmae (1995) who argue for the declining relevance and authority of nation-states in the face of a unified global economy. The increasing global scope of business activities by TNCs is taken as a key indicator of the power of global capital and global markets. This results in an integrating global economy that imposes a market logic on governments around the world. In contrast, the sceptic school questions the pervasiveness of a unified global market, pointing out that most financial and trading activities take 11 C-Landscapes.indd 197 7/30/13 10:39:54 AM Karen P.Y. Lai 198 place around three regional blocs—Europe, North America and Asia. They also point to the continued resilience of nation-states and the importance of home countries or regions in influencing the headquarter locations and key decision making functions of TNCs. As such, current economic processes are better described as continuing earlier trends of internationalisation rather than true global integration. The third school of thought is the transformationalist perspective that argues for a qualitatively more sophisticated conceptual framework for understanding globalisation as a process and its geographically uneven impacts (see Yeung 1998; Held et al. 1999). This position argues that globalisation is a powerful transformative force that thoroughly reshapes societies, economies, institutions of governance and world order. The outcome of this transformation process is unpredictable as globalisation is a process that emerges...