Singapore’s economy has put up with many challenges in the
global environment. The development of new technology, international
competitiveness and rising economic nationalism are interfering with
Singapore’s economic potential. Along with tackling these challenges, Singapore
is also dealing with the effects of the decline in population growth and
productivity growth, increasing costs and weak innovation volume. To be able to
deal with all these it is important that businesses in Singapore and the
government to adjust deal with these issues as if they don’t then Singapore may
not be able to deal with these challenges for global growth in an increasingly
competitive global environment. Singapore are lucky in given opportunities to
grow through the economic development of China, India and ASEAN.
(lowyinstitute, 2019) According to the IMD world competitiveness ranking in
2019, Singapore ranked first which means it moved up two places from 2018, this
shows the adaptions Singapore are making to deal with the global growth are
working. (imd, 2019)
Britain is number 22 of Singapore’s trading partners, this
means the world’s biggest trading bloc known as Brexit may not have much impact
on Singapore. Some businesses in Singapore may benefit from the drop in the
sterling pound against sing dollar as this means imports from the United
Kingdom are less expensive so therefore increases profit margins. Although there
are concerns that Brexit may upset Singapore’s overall economy if British
businesses stop investments in manufacturing because of the drop in the pound
to sing dollar. (straitstimes, 2019)
Singapore’s location is a valued strength that supports their
place as a regional business hub. It assures that the local SMEs are situated
to make use of the area’s growth opportunities but it is important that the
SMEs take advantage of foreign markets for frequent growth outside the limits
of the domestic market as this can support their survival and avoid the
inactivity of the economy. In spite of the many advantages of globalisation,
there are also many challenges for SMEs, first challenge being finance. Finance
is a challenge as SMEs tend to have lower budgets so it is important they
carefully use their funding to make profits or increase productivity. Manpower
is another challenge, in Singapore the SMEs are reluctant to give their
employees training opportunities so therefore a lot of SMEs do not have the
necessary skills or people to start and keep cross-border actions. Majority of
SMEs work lean operations but they don’t have the dimensions to measure their
manufacturing to see any extra demands, as a result this may restrict their
ability to discover growth opportunities globally. The final challenge
Singapore SMEs face is their own knowledge and networks, trading
internationally needs a lot of knowledge on foreign markets and their rules,
having the appropriate network in the market they are targeting is important
for business to grow. (sbr, 2019)
Increasing protectionist policies has become a risk for Asia’s
success, ambassador of Singapore’s Ministry of Foreign Affairs, Tommy Koh
declares. He states that the increase of protectionism in the United States and
Europe may threaten Asia’s prosperity, as after World War 2 Asia has developed
massively due to the generous economic demand that United States and the United
Kingdom made. In 2003, the United States and Singapore contracted a free trade
agreement but just lately President Trump removed the U.S. from the
Trans-Pacific Partnership as he said it would negatively affect the United
States manufacturing. (cnbc, 2019)
In 2006 the Singapore economic growth was 7.9%,
which was higher than the initially predicted 7.7%. The Singapore government encourages
high saving and investment through a compulsory scheme, the Central Provident
Fund, which is a retirement saving system. A huge amount of the budget are used
for education and technology, with the previous rate is 21% back in 2001
whereas spending in the U.S. is 4% but most of Americas education is funded
from state level. Singapore’s plan for its economy has resulted in growth that was
averaged at 8.0% from 1960-1999. For Singapore to stay as a main competitor,
the Singapore government pursue to encourage developed actions that add value
to the manufacturing and services areas. Plans are on way to open the financial
services, power generation and telecommunications to overseas and better competition.
(globaltenders, 2019)
A major opportunity for global growth in an increasingly
competitive global environment is Biotechnology. Singapore promotes and
develops its biotechnology business, millions were invested into this to grow
the organization, fund the research, and recruit scientists. Pharmaceuticals
are responsible for over 8% of Singapore’s manufacturing production. (globaltenders,
2019)
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