Extracts from an essay
by Gary Dean (who specialises in the culture, economics, history
and politics of SEA countries):
This ability to innovate is crucial to an economies ability to
extract rents from the market for new products. Because Singapore's
export economy is dominated by non-Singaporean transnational
corporations (TNCs) who have not been burdened with the need to
directly share their technologies, Singapore's capability
to innovate is said to be much less than that now displayed by
Taiwan and South Korea.
Along with the other NIEs, Singapore shared certain factors that
tended to increase its international competitiveness, among them
stable macroeconomic policies, sound financial systems and good
infrastructure, an educated workforce, a work ethos, and policies
which encouraged entrepreneurial activity. However, in the area of
foreign investment Singapore took quite another path compared to
South Korea and Taiwan. In fact, the Singapore government's
treatment of foreign investors -- at least in the early years of
development -- was almost preferential when compared to indigenous
capital. Through infrastructural subsidies and tax
incentives to foreign exports, the local Singaporean business class
was to an extent marginalized.
In both cases, a huge anonymous underclass of cheap labour
supported the superstructure; in the case of Singapore,
Malaysians (of every race, not just Malays) and other Southeast
Asians, who are offered only the barest of legislative protection
by the government.
However, one important weakness in Singapore's approach is the
question of technological innovation, considered the last stage of
technology transfer.[10] For a variety of reasons, state-of-the-art
R&D by TNCs is nearly always concentrated in a few developed
countries, and high technology tends not to be developed outside
the TNC's home-base. Cutting-edge R&D in particular is usually
undertaken close to management and decision-making centres where
there exists a large local market, and a pool of advanced and
specialist technical skills.[11] Another important weakness
is that the very presence of strong TNCs can inhibit local
companies from deepening their technological capabilities,
preferring to import foreign technologies that are proven and
ready-to-use, rather than invest in their own R&D.[12]
This is arguably what has already happened in Singapore as a
consequence of their developmental path.
The cost in human terms of this success has been high:
Singapore today is an authoritarian corporatist state that
intervenes in virtually every aspect of citizen's lives. Singapore
has become a nation of functionaries who serve the interests of the
TNCs and the Singaporean state elite. Within such an environment
there exists very little true entrepreneurship.
FDI has not assisted in the development of an innovative
population; rather it has assisted in the creation of a
self-satisfied, arrogant society that seems content to live off its
natural advantages.[23] Singapore today resembles an enormous
air-conditioned shopping mall, with squeaky-clean streets and
traffic so orderly as to border on the bizarre.
http://www.okusi.net/garydean/works/fdising.html
