WHY aspire to be a second Boston or second London and not a first-rate Singapore?
It's time - particularly during a global crisis - for Singapore to rethink its economic model and employ niche targeting right where it has unique strengths to become a world leader, rather than stay a follower in various sectors, an economist suggests.
While highly successful so far, Singapore's growth model - built on wooing multinationals to drive key sectors here - may not be sustainable in the changing environment, says Linda Lim, professor of strategy at the University of Michigan's Ross School of Business and director of its Center for South-east Asian Studies.
A Singaporean academic who has been in the US for some four decades, she was a speaker at the Singapore Economic Policy Conference yesterday.
In her view, the Singapore growth model has both tried to do too much - going against what theories such as comparative advantage and diminishing returns propose - and achieved too little in terms of delivering returns for Singaporeans relative to foreigners and foreign firms.
'Singapore cannot be internationally competitive and a world leader in semiconductors, life sciences, healthcare, education, financial services, creative industries and casino tourism, all at the same time,' she says in her paper for the conference.
Speaking to BT, Prof Lim said: 'Of course you can make an argument for doing 10 sectors instead of three; you say diversify. But if we do all, everyone becomes uncompetitive; all face rising costs as they compete with each other for scarce land and talent.'
Outlining her alternative strategic vision, she says that the starting point is to take stock of 'what you have, including your geographic location'.
Then look for a strategy of differentiation: 'What do you have, what can you do that nobody else can do? You want to develop a blockbuster drug? Any number of places in the world can do it. You have to look at what is specific about you.
' Perhaps it may be that if we want to have financial services, then we cannot have life sciences, integrated resorts. You have to make a choice, you cannot have everything. You choose the thing you can do better than anybody else.'
And one indicator of a 'market advantage', she says, is whether a country needs to provide 'inducements, or investment incentives, otherwise known as subsidies' to attract talent.
'If people are naturally coming here, that's fine.'
And not least, 'let the private sector do it', she says, suggesting that capital and talent be released to local entrepreneurs, to be allocated according to market forces. When and if private enterprise fails, it will take only small parts, rather than big chunks, of the economy down with it, she argues.
Singapore is particularly well-placed for a whole cluster of economic activities 'from finance to forestry and fisheries', Prof Lim says.
'Where are we? We're next to the biggest forests in the world. Why not be a carbon finance centre? People are doing this in San Francisco! They are doing Indonesian . . . avoiding deforestation . . . out of San Francisco! Why can't we do it from here?
'Why do we want to be a second Boston or second London? We want to be a first Singapore. There are already second, third and fourth Singapores all over the world - people are copying our strategy.'
Singapore could also be a centre of expertise in creative fields such as traditional and modern Asian arts and culture. Already, Singapore is the best place in the world to do South-east Asian studies, Prof Lim says.
Economic growth here has focussed on quantitative targets, but it may be time to look at the qualitative aspects such as its 'purpose' and nature.
'I'm saying, look at net value creation for citizens. 'People for growth' - growth as an end in itself - is not the same as 'growth for people', growth as a means toward greater welfare for people.'
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