Hong Kong, Taiwan, Korea and Japan--watch out] Singapore, one of the rising stars of the Pacific Rim, is challenging the financial and technological strongholds of these countries. But as a result, Singapore is no longer the mecca for low-cost labor and ready-to-assemble manufacturing.
As a British colony until 1959 and part of the Federation of Malaysia until 1963, Singapore did not gain its independence until 1965. Today, much of Singapore's attraction for the West lies in its helpful and efficient bureaucracy and its political stability. Former Prime Minister Lee Kuan Yew, who stepped down from his post last fall after 31 years in office, receives much of the credit for making Singapore what it is today. Time will tell if Lee's successor, Goh Chok Tong, can maintain the same economic prosperity and political stability.
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Known throughout the United States and most of the world for assembling circuit boards and computers, Singapore got its industrial start by enticing U.S. and Japense manufacturers with its inexpensive skilled labor and government-supported factories. Now Singapore wants to shed its low-cost, labor-intensive image and get into high-tech, high-capital R&D.
Singapore is already successful at producing high-tech goods. For example, the nation is currently the largest producer of high performance disk drives made by U.S. companies and exported throughout the world.
Instead of just producing, Singapore also wants a hand in designing. Because it lacks the needed technology and R&D training, the government is trying to entice foreign companies to its receptive business environment. Here's where U.S. firms come in: Since Japan does not part willingly with its high-tech research methods, Singapore is turning to the United States.
Singapore's small domestic market should not discourage U.S. businesses. On the contrary, Singapore is a great first step for a company starting overseas operations. In addition to its own U.S. consumer market, Singapore can serve as the gateway to other Association of Southeast Asian Nations (ASEAN) markets and as the center of Southeast Asian shipping, air travel and communications.
Besides, Singapore--like Hong Kong--has a free trade market that is open to almost any product or service with few tariffs or restrictions. Most imports and exports remain duty-free, and the market is wide open. C.H. Koh, director of the singapore Trade and Development office in New York, doesn't recommend a specific industry for investment because "Singapore imports almost everything from consumer goods to its drinking water."
Still, some markets are more promising than others. U.S. firms that specialize in electronic production and test equipment; aviation and avionics equipment; computers, peripherals and office systems support equipment; medical and healthcare equipment; biotechnology; and tourism are apt to do particularly well.
Singaporeans also want all kinds of consumer goods, including clothing, cosmetics, toys, electrical appliances, furniture and jewelry. …