FDI Not Enough, Innovation Needed to Grow Economy

It is no longer enough to bank on foreign direct investment to develop Singapore’s economy, even though the strategy of wooing multinational companies to set up bases here has been a major part of the country’s growth model, Education Minister Ong Ye Kung said on Friday.

“Our economy is maturing and we are already pushing the limits of our land and manpower resources,” he said. “In the meantime, technology is advancing rapidly, and our region is a booming market,” CNA reported.

For Singapore’s next phase of economic development, Ong said the country must embrace innovation, develop new products and services, and nurture locally-based companies to expand regionally and worldwide.

This is one of several examples Ong cited as he outlined the ways Singapore is remaking itself, in a speech at the Singapore Summit—an annual event where business leaders gather to discuss challenges to regional and global growth.

Ong pointed out that across the world, “politics and governance are becoming more short term and populist”.

“But in Singapore, we have chosen to keep our orientation firmly towards building for the long term,” he added. “It is the only way that a small state can survive and do well.”

To do well in innovation, Ong said Singapore has been “patiently investing” in research and development, and attracting R&D centers and laboratories.

“These centers and labs are at the frontiers of technology, delivering innovation which has the potential to be commercialized, spun-off into enterprises which can grow and create jobs,” he said.

In all, Ong said Singapore now boasts a “new value proposition” that includes sustained investment in R&D, a well-educated local talent pool and a well-regulated yet enterprise-friendly environment.

“We also have a network of Free Trade Agreements—with ASEAN, US, China, India, Korea, Japan, Australia and New Zealand. We’ve done well,” he added.

In a wide-ranging speech, Ong also touched on the country’s healthcare and education policies.

Meanwhile, Singapore is an important goods distribution center, the main products are tin, rubber, coconut, oil, rice, wood, jute, spices and coffee. The traditional economy is given priority to with business in Singapore, including transit trade, processing and export, shipping, etc.