Singapore Competitiveness Report Singapore Competitiveness Report 2009 foreword by Michael E. Porter Harvard Business School Christian Ketels Ashish Lall Neo Boon Siong with research assistance from Stevenson Q. Yu LEE KUAN YEW SCHOOL OF PUBLIC POLICY Susan Chung Lai Ling NATIONAL UNIVERSITY OF SINGAPORE 469C Bukit Timah Road, Oei Tiong Ham Building, Singapore 259772 www.lkyspp.nus.edu.sg/ACI b SINGAPORE COMPETITIVENESS REPORT Singapore Competitiveness Report foreword by Michael E. Porter Harvard Business School Christian Ketels Ashish Lall Neo Boon Siong with research assistance from Stevenson Q. Yu Susan Chung Lai Ling SINGAPORE COMPETITIVENESS REPORT 1 2 SINGAPORE COMPETITIVENESS REPORT Table of Contents Foreword ...............................................................................................................................7 Executive Summary ..............................................................................................................9 Chapter 1: Introduction Singapore’s Competitiveness Challenge in 2009 ..........................................................................................19 The Report’s Conceptual Approach ..............................................................................................................19 Report Outline ............................................................................................................................................... 21 Chapter 2: Economic Performance Standard of Living .........................................................................................................................................25 Prosperity ....................................................................................................................................................25 Equality .......................................................................................................................................................27 Quality of Life ............................................................................................................................................ 28 Components of Prosperity Generation ........................................................................................................ 28 Labour Productivity................................................................................................................................... 28 Labour Mobilisation .................................................................................................................................. 30 Purchasing Power ....................................................................................................................................... 31 Assessment ....................................................................................................................................................33 Chapter 3: Intermediate Economic Outcome Indicators Trade ..............................................................................................................................................................37 A Case Study: Electronics Exports .............................................................................................................41 Investment .................................................................................................................................................... 47 Innovation .................................................................................................................................................... 49 Entrepreneurship .......................................................................................................................................52 Assessment ....................................................................................................................................................53 Chapter 4: Competitiveness Fundamentals Assessing Competitiveness ...........................................................................................................................57 Endowments ..................................................................................................................................................57 Macroeconomic Competitiveness ................................................................................................................ 58 Social Infrastructure and Political Institutions ........................................................................................ 58 Macroeconomic Policy .............................................................................................................................. 60 Microeconomic Competitiveness .................................................................................................................61 Business Environment Quality ..................................................................................................................61 Factor Conditions ................................................................................................................................... 62 Context for Rivalry and Strategy .............................................................................................................73 Demand Conditions ................................................................................................................................75 Supporting and Related Industries ........................................................................................................ 76 Company Sophistication ........................................................................................................................... 80 Singapore’s Competitiveness in Perspective ................................................................................................ 80 Chapter 5: Conclusions Summary of Findings ................................................................................................................................... 85 Implications .................................................................................................................................................. 86 Recommendations ........................................................................................................................................ 87 SINGAPORE COMPETITIVENESS REPORT 3 Boxes Box 1 The Global Economic Context: What Changes Will the Crisis Bring? ............................................................. 44 Box 2 International Rankings of Innovative Capacity .................................................................................................70 Box 3 A Case Study of Singapore’s Interactive Digital Media Cluster .........................................................................78 List of Figures Figure 1.01 The Competitiveness Framework: Determinants of Prosperity ........................................................................20 Figure 1.02 Assessing Competitiveness ................................................................................................................................. 21 Figure 2.01 Singapore’s per-capita GDP per capita, in thousands of 1990 PPP$ ..................................................................25 Figure 2.02 Comparison of GDP per capita ...........................................................................................................................26 Figure 2.03 GINI Coefficient Comparisons, latest year .........................................................................................................27 Figure 2.04 Singapore’s Gini Coefficient among Employed Households ..............................................................................27 Figure 2.05 Human Development Index and Components ..................................................................................................28 Figure 2.06 Labour Productivity and Growth ........................................................................................................................29 Figure 2.07 Relative Productivity and Prosperity ..................................................................................................................29 Figure 2.08 Change in Sectoral Labour Productivity .............................................................................................................30 Figure 2.09 Participation and Growth ....................................................................................................................................30 Figure 2.10 Contributions to Change in Labour Mobilisation, 2000-2008 ...........................................................................31 Figure 2.11 Comparison of Female Labour Participation Rates, 2009 Estimates .................................................................31 Figure 2.12 Country-level Price Comparisons .......................................................................................................................32 Figure 2.13 Normalized Comparative Price Levels of selected Cities ...................................................................................32 Figure 2.14 Price Accessibility for Selected Products ............................................................................................................ 33 Figure 2.15 Total Factor Productivity .....................................................................................................................................33 Figure 3.01 Trading Trends .....................................................................................................................................................37