Singapore's future lies in services, says WTO
Published: 10 Jul 2002 08:32 BST
With China's rising importance as a production hub, mature countries such as Singapore should turn to exporting its knowledge-management expertise in the form of services to stay relevant in the global economy.
The advice came from Supachai Panitchpakdi, director-general of the World Trade Organization (WTO), in a high-level industry forum hosted in Singapore on Tuesday by computer systems maker IBM.
"Beyond the trading of physical goods, Singapore can exercise some flexibility...by delivering services across its borders," said Panitchpakdi, making mention of industries that range from healthcare and education to transportation and logistics.
Panitchpakdi pointed out that there is a shortage of operational managers in China and India's education sectors. He reckoned that the under-supply will create opportunities for Singapore, which has built up extensive management know-how among its workers.
In another example, Panitchpakdi noted that China's lack of maintenance and support services is an area Singapore companies can exploit. Although the mainland is a good manufacturing spot for automotives, the country has not done a good job in after-sales services as these were previously driven by the government instead of the private sector, he said.
"The shift from an asset-based economy to knowledge-based does not mean the end of the road for Singapore," added the former deputy prime minister of Thailand, who will start his new job with the WTO in September.
Panitchpakdi's message was timely as many established manufacturing bases in Asia are scrambling to maintain their attractiveness in light of rising competition from China, following its accession into the WTO.
Among many electronics and technology brands, Toshiba, Sony and Dell have begun to transfer manufacturing activities from other parts of Asia to China to take advantage of lower operating costs.
Singapore's prime minister, Goh Chok Tong, had last August warned of trying times ahead, with increasing rivalry from China as a major exporter and magnet for foreign investments. There has also been greater emphasis on education, medicine and biotechnology to reduce Singapore's reliance on electronics export. The electronics sector accounts for nearly half of all manufacturing activities in the island.
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