DOING BUSINESS REPORT AND SINGAPORE
During the past few classes we learned about the World Bank's Doing Business Report. This publication ranks the world's economies across several dimensions that reflect the ease of doing business. Some of these dimensions include ease of starting a business, registering property, getting electricity and getting credit. After discussing the methodology behind the report, we began to look at the background of the country that has consistently topped the list: Singapore. A guest lecturer educated us on how Singapore has used the past fifty years to emerge as a powerful and thriving economy.
The Republic of Singapore gained its independence from Malaysia in 1965. Having began as a port city, the city-state is home to a thriving multicultural society in which many people speak several languages.
Beginning in the 1960s, we learned, Singapore began to undergo a physical and economic transformation. In the 1970s, Singapore's economy was labor intensive. In the 1980s as the nation advanced, the economy grew more skills intensive, focusing on skilled labor. In the 1990s, Singapore saw a shift towards a technology and service- based economy. Finally, at the turn of the 21st century, Singapore's emerged as a modern, knowledge and innovation based economy. Over the decades, Singapore's GDP increased to USD 276B USD by 2011.
Singapore's geographic position has made it an ideal location for some 37,000 multinational companies. Located in the heart of Asia, Singapore provides connectivity to regional markets in the Middle East, India, Southeast Asia, and Eastern Asia.
In today's Singapore, the manufacturing and service industries are twin industries of growth. Aerospace, biomedical sciences, logistics and headquarters are also major contributors to Singapore's GDP.
Despite its success, evidenced by GDP growth and its consistently high ranking on the Doing Business report, Singapore still has some growth challenges to face. Singapore would like to evolve from a "host" country, one that firms just use for its strategic location to a true "home", a location where business growth, innovation and strategy are driven. Our guest lecturer saw this as a very possible opportunity; if firms truly want to capture share in the regional markets, geographic proximity is key to understanding the needs of the consumers there. Furthermore, because of the location and and diversity, Singapore can be viewed as a microchosm of the regional markets- a great living lab in which to test products or ideas.
In these ways, Singapore is well poised to be not only a strategic hub, but a valuable location for innovation and business development.
The Takeaways:
Learning about the Doing Business report was one of the most salient takeaways from this session. While I had been introduced to this report in previous courses, the methodology and the standings have since changed. Reacquainting myself with this framework and the rankings of different nations was a useful exercise.
Further, I appreciated this opportunity to learn about a framework and then see it applied. It was very powerful to learn about the Doing Business report, learn the rankings, and then discover the underlying reasons behind why a particular nation achieved a certain high ranking. As the Doing Business report points out, strong economic performance does not always translate to a high doing business ranking. If the Doing Business rankings were purely a reflection of GDP, the ranking would be purposeless. Singapore's location, history, culture and policies have all contributed to its ease of doing business and consistent high ranking.
Finally, I found interesting the Similaries between Singapore and the city states I will visit on my study abroad trip this winter. As I learned at the open skies debate, the central location has allowed Emirates airlines to operate a profitable hub-based business model. Singapore appears to enjoy similar benefits for the regional connectivity it offers. I look forward to learning which factors beyond location have helped these city states to flourish.
