Technology and Skills in Singapore 9789814377157

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TECHNOLOGY AND SKILLS IN SINGAPORE

The ASEAN Secretariat, based in Jakarta, was formally established by an agreement signed by the ASEAN Foreign :VIinistcrs during the First Meeting of ASEAN Heads of Government in Bali in February 1976. The Secretariat provides a central administrative organ for the co-ordination of the activities of ASEAN bodies and the implementation of ASEAN projects and activities. It is headed by a Senctary-General, appointed on a rotational basis among member countries. The Secretariat has three functional bureaus - Economics, Science and Technology, and Social and Cultural - each headed by a Director. Tht· Japan Institute of International Affairs (.JIIA), founded in 1959 by fonner Prime Minister Shigeru Yoshida, is a non-profit research organization concerned with international affairs. The Institute's priority areas of research arc on the ASEAN countries, China, Korea. the Soviet Union and Japan's relations with these countries. Research projects are conducted by the Institute's research staff members in cooperation with university scholars and researchers from other institutions in the public and private sectors. Research output is published in the form of either books or articles in any of the Institute's five periodicals, including the monthly Kokusai Mondw (lntcrnatumal Affairs). The JIIA currently serves as the secretariat in Japan for the Pacific Co-operation Committee, the ASEAN Regional Studies Pmmotion Programme, and the Japan-Indonesia C:onfnenct'. The Institute of Southeast Asian Studies was established as an autonomous organit.ation in May 1968. It is a regional research centre for scholars and other specialists concerned with modern Southeast Asia, particularly the multi-faceted problems of stability and security, economic devdopment, and political and social change. The Institute is governed bv a twenty-two-member Board of Trustees comprising nominees from the Singapore Government, the Nationall'niversity of Singapore, the various Chambcrs of Commerce, and professional and civic organizations. A ten-man Executive Committee mersees dav-to-day operations; it is chaired by the Director, the Institute's chid academic and administratin· officer. The ASEAN Economic Research Unit is an integral part of the Institute, coming under the overall supervision of the Director who is also the Chairman of its Managt·rrwnt Committee. The Unit was formed in 1979 in response to the need to deepen understanding of t'COIJomic change and political developments in ASEAN. The day-to-day operations of the Unit arc the responsibility of the Co-ordinator. A Regional Advisory Committt't', consisting of a senior economist from each of the ASEAN countries, guides the work of the llnit.

ASEAN Regional Studies Promotion Programme General Editors: C.Y. Ng, R. Hirano, Robert Y. Siy, Jr.

EFFECTIVE MECHANISMS FOR THE ENHANCEMENT OF TECHNOLOGY AND SKILLS IN SINGAPORE

Chng Meng Kng (Principal Researcher) National University of Singapore

Linda Low National University of Singapore

Tay Boon Nga National University of Singapore

Amina Tyabji National University of Singapore

The ASEAN Secretariat and

Japan Institute of International Affairs in collaboration with

ASEAN Economic Research Unit Institute of Southeast Asian Studies

Cataloguing in Publication Data Effective mechanistm for the enhancement of technology and skills in Singapore, Chng Meng Kng ... [et al.]. Papers prt>sented at a meeting held for ASEAN Regional Studies Promotion Programme: Phase II, Tokyo. 1985. I. l'cclmology transfer - Singapore 2. Technology and state - Singapore 3. Technological innovations - Singapore 1. Singa]X>re - Industries I. Chng, Meng Kng II. ASEAJ\' Regional Studit·> Promotion Programme: pha-,e II. HC I !:J.8 Z9TH25 1986 ISBi\' 9971-988-32-1

Published bv Institute of Southeast Asian Studies Heng Mui Keng Terrace Pasir Panjang Singapore 0511 .·\11 rights reserved. 1\'o pan of this puhlicuion may he reproduced. stored in a retrieval system, or trammitted in any form or hv any means, electronic, methanical, photocopying, recording or otherwise, without the prior consent of the Institute of Southeast Asian Studies. " 1986 Institute of Southeast Asian Studies Tht· rt'.\fJOnsibilitv jor facts and ofnnion.\ t'Xfnrs.w·d in this publication rests exclusiwly with the authm.1 and their interpretalions do not necessarily reflect thf' uif'U'S or lhf' poh86

31i,l67A

2,222.7

21.8'>8.7

9,%:,_9

132,392

33,9({J

2:).9

fi\.7

7 L/

1983

3,61ti

37.221-"

2,1 13:!

22,610.8

9,822.1

I 37.259

:J6.230

26.1

n.a.

n.a.

Sot'RC~s,

.,"'

Singa1xm·. Department ol Statistics, Eumunuc and Suczal Statistics, Singapore 1960-82; Economit Dew·lopnwnt Board, ,-lnnual Rrport !982 8!; and Singapote, lkpartrnent of Statist its, Crn1us of Industrial Prodw tiun, 1981.

chnology and Skills in Singapore

TABLE 3 Composition of Manufacturing Output, Value-added and Direct Exports,

1974 and l9H3 (In per cent) lndmtria1 Code

311~

.'ll2 'll:l 311

Output Industl\ Major Group

Food

1971

\'a1ue-added

1983

1971

1983

'"'

Direct Exports 197~

1983

~.2

3.6

Ul

L7

tUl 0.:-,

1.3 1.2

15 0.9

OJ

0.3 0.1

2.2

0.7

2..1

LO

23

05

2.0

9. _.:)

2.2

'H

2.5

2.9

Leather & leather products

0.2

0,]

0.2

(),]

0.2

],()

7.0

Rewrage Cigarettes & other tobarco pnxluns

0.7 Ll

321

Textiles & textile manufactures

322

\\'e:ning apparel except

323

0.1

footwear

32~

Fttbli,hillg Pharmatcutistment with regard to the typt> of organization, t>quity participation, or employment of expatriate staff. Firms also have a free hand in the import and use of technology. There are no comrols on, nor even the need to disclose, the terms, conditions and cost of technology agrt>ements. The general perception of the government is that any curb on the frt>edom of firms in such mattt>rs can only reduce their competitive efficiency, with adverse effects for Singapore. As far as possible, national economic objectives should be pursued via the market mechanism. Thus, regarding the important objective of the indigt>nization of managerial and professional personnel in fort>ign firms, the approach of the government is to improve the quality of local manpower such that it is in the competitive interest of the foreign companies to train, upgrade and indigenize their professional staff rather than make these statutory requiremt>nts. As part of its global-city approach, Singapore eschews the pursuit of an independent technological capacity. It aims to become an important, if not indispensablt>, technological nodal point in the increasingly integrated global system of production - performing a regional as well as international role. Partly bt>ctuse of the maintenance of a non-discriminatory market framework and avoidance of ovt>rt t>conomic nationalism, a strong local industrial entreprent>urial class has not so far emerged in Singapore compared, for example, to Hong Kong, Taiwan or Korea. In 1975, a Bureau for Joint Ventures was set up within the EDB to promote joint vf'ntures betwe), the Small Industries Finance Scheme (SIFS, 1976), the Product Development Assistance Scheme (PD:\S, 1978). and the SDF Dn·elopnwnt ConsultancY Scheme Small Industries Technical Assistance Scheme (SITAS, 1982). In 19H I, the :\Iinistry of Trade and IndustrY received from the :\linistn of Finance a block \Otc comrniunent of SS50 million to finance directed research on a projcctby-projel t basis in public institutions such as the 1\'l TS, SISIR, ARC:. TAS. Public \\'orks Department (P\\'D) as well a;, private companie:-, under the Research and De,clopmt·nt Assistance Scheme (RDAS). The private ( ompanie;, may be local or multin;uional, including those alreadv enjoying other tax incentin·:-, and grants. HowcnT. their projecu, mu;,t invohe the actin· parti( i pat ion of a pu blic-sectm organiLation. The SDF has also three financi~d assi,tance schemes \\·hich assist firms to afford traming, mcchaniLation, and comult~mcv facilities. The SDF is ~dso to admini;,tcr a recentlY announced scheme (ailed Intech. 1 ~ l 'mlcr this scheme, all companies and mganizations registered in Singapore in the priori tv areas lio,ted, such as automation and robotics, micro-electronics, information technology, biotechnology, optictl and laser technology, cngincning 'cicnn· and materials -,cience, can applv for subsidies of up to 90 per cent of manpower costs. Those engaged in research and dneloprnent rnay also seck grants or low intnest loan;, for financing ;,ophisticated equipment and rnMhinen.

Institutions Despite the lais.1e~ fairr· approach to ;,cicnce and technology, the gm ernmcnt pLl\, a central role in the pro(ess of technology transfer between recipient and supplving firms. Figures 2 and 3 portra) the structure of technological institutions in the public sector- that is, gonTnmcrlt ministries and departments as well a;, statutm) boards - invohnl in the production and or dissemination of technical knowledge. in 197! and 19Hl. respectively. In 197·1 (Figure 2), four ministries wen· involved in technology transfer, in one \\·ay or another. The i\Iinistry of Science and Technologv (:\1ST) was established in 196H, in the ;,arne vear that the Technical Education Department in the i\linistrv of Education was set up. both in recognition of the urgent rwed to restructure the education S\stern for indu;,trial needs. The :\1ST wa'i to promote science and technology in the education sy;,tern and the onTall dndopnwnt of the e(onomv. In particular, the Science Council, established in 1967. took durgc of scientifi( services, including scientific and technological research ami development in

uo

F!GllRF 2 Tt'chnological Institutions in SingaiXJJC, 1974

1\.lini~ll\

ol Finawe

:\ltnl~tl\

o!

.',ttt'Jl({'

0

:\.lmi'>ll) ol l'.du{ atiOll

,md Te

~ing:a{X)It'

re!embct 1978, as reponed in SfJPeches, Ministry of Culture, SingaJXHe. Sec abo, the Opening Addtt·" ll\ i\lt Jek Yeun Thong at the Third Congress of the Singa)X)re National Academy of ScietHt', 14 July 1977. 8. See Linda Low, "Publi< Enterprises in Singa)x>re". in Singaf)()re: Twnzty-Fn•r· }'em\ of Dn;elopmntl, edited by You Poh Seng and Lim Chong Yah (Singafxnc: i\'an Yang Xing Zhou Lianhe Zaobao, 1984), pp. 253-87. If subsidiaries of subsidiaries, that is, all companies in which the governrnent has direct or indirect interest, are included. the ntunber conw.\ to ·190 corn panic.\ with S$2.4 billion paid-up capital, and S$18.2 billion in fixed a>St'ts, as n·vealni in the Strruts Tlme.1, 6 April 1985. 9. See Aerwpate Indwtry irz Singapore 1984 (EDB and the Department of Civil Aviation, 19tH).

34

Technology and Skills

111

S1nga{}()re

10. As cxp~t·sscd Ill the :\!inistcz for Tzadc and Indmll). Dz Ton) Tan Kcng Yan1. Singapmt', l'arlwn1entary /k!Jatr·.\, 0((111111 HejJrnt. ,·ol. 10 no. 3 (I'> Scptcmbct llJ7HJ. I I. Details of tltc>r· tax in< cntiws and the li11an< ial assistance :xhc!IH's can be found in the f~r OI/0/1111 /)l'i't'lojmzn11 lioard .llll1lflfi H.cf)()r/.1, \arious \Cars. 12. Sec Stwlt.1 Tmzn. 2:1.\ugust Ivelopment

FIGURE 4 Composition of Council of Professional and TedmiGJ.l Education

:\lini'>tn of Trade & lndu-.tq

Joint Indu-,uial lwrnt·..,

l'tdHHng ~
6

95

66

72

97

'>7

B. Eng. (Chemical)

-

B. Eng. (Industrial) Sub-total Total (all graduate') Sub-total as

·~

of Total

25

20

,,,

67

79

100

107

llO

IK>

19

21

21

2f1

27

19

28

702

608

07S

681

653

682

562

'>05

707

769

759

895

1,075

1,269

2,132

2,032

2,106

2,181

2,380

2,408

2.357

2,122

2.763

2.603

2.3·15

2,581

3.409

28"'>

2H.3

32.-1

29.9

....

"e

::l

29

1,776 395

""::::;

421 636

28.7

23.3

21.1

29.2

27B

29.2

3H.2

-lUi

37.2

• Figures up to 1980 include graduates from :\';myang lTniversity.

+ Prior to 1982 '83. students graduated with B. Sc (Chern. Engine

78 79

79 80

80 81

81 82

(:unndatin' Total

TECHNICIAN GRADUATES Aeronautical :\laintenann· Engineering

-

-

-

-

24

47

-

-

-

-

-

71

An hitectut

~ r,

;:,. ;:1

.18

53

66

360

2'>

27

30

82

1,637

1,790

2,037

16,540

0

;:1

CJ:.

;:1

~.

~

'g~

Vl

[

TABLE 7- cont'd

:;;;t'r1

Graduate Statistics of the Singapore Polytechnic

;:I

iS ;:I

7L72

72173

73 71

71175

75 76

76 77

77 78

78 79

79 80

80 81

81 82

C:umulatin· Total

"";:l " :! "' "'-

1,854

.g

CERTIFICATE GRADUATES Industrial Technician Certificate

258

431

508

657

.'i9

65

:J.)

16

19

Architectural Draughtsmanship Mechanical Draughtsmanship

-

Rubber Technology

I

Works Management/Industrial Management

.,

-

69

~

69

87

-

146

127

Ill

211

-

I

-

1,005

35

-

-

2

-

81

97

]]()

95

II''

6i2

127

74

39

12

6.)~,

21

2:i

15

20'J

Proce>S Plant Engineering Design

17

17

Plastics Mould Design

11

H

29

57

Certificate of Completion in PreAeronautical Engineering·

"" -
0

g "'

;:$

""(/)

~

[;;"

;:; ;:;

(/)

(lq

5"' ~

47

Skills Enhancement and Manpower Development

TABLE 11 Enrolment in Educational Institutions (In thousands)

Primary Secondary & Junior Collt>ge' Academic ·rechnical 1 Commercial 1 Technical & \'ocational Institutes" Universities & Colleges TotaP

1960

1965

1970

1975

1980

1981

1982

285 59 58

357 114 103

36~

328 176 153 20

297 170 147 17

290 177 149 18

289 177

12

9 3

6

]()

11

146

137

147 18

8

12 11

5 lei

10 19

12 22

13 2'1

15 27

353

187

528

533

502

504

508

Figun·, from 1960-70 include enrolment 111 technical, commercial and vocational stream,, and Boys' Town Trade Schm)l. " The 1969 and 1970 figures include enrolmclll at the Industrial Training Centre. From 1971, enrolment at' the Boys' Town Trade School is included. ' Totals may not add up due to rounding. 1

Sot 'RC.F: Singapore, Department of Statistics, Economics and Social Statistics, Singapore, 1960-82. partnership with Computervision Corporation of the United States in February 1983, the ASEA-EDB Robotics Training Unit (AERTU) with ASEA AB of Sweden, in 1983, and thte JAPAX Group-EDB CNC Training Unit (JECTU) with JAPAX lktegai and Hamai of Japan, in November 1983. Thte EDB has thus consciously tapped the resources and expertise of the MNCs in and outside Singapore as well as those of developed industrial countries on a governmental level. The SDF, which is funded from a levy on employers based on 2 per cent in 1979, raised to 4 per cent in 1980, and lowered to 2 per cent in 1985, of the payroll of all employees earning less than S$750 per month, is usable, upon application and approval, by employers to upgrade the skills of their employees and to acquire better technology and equipment under three schemes. These are the Training Grant Scheme, the Interest Grant for Mechanization Scheme, and the Development Consultancy Scheme. Some cross-subsidization is evident; the levy is an earmarked tax whose incidence is probably shifted among employers, employees and the government. Employers, whose trained workers have been subsequently poached, would at least have been subsidized by those who had no training schemes, but who had to contribute to the levy. This subsidization may, however, not be ideal or wholly equitable. The SDF also has a financial assistance scheme for companies to groom their personnel and training staff to become more effective trainers. 11 The SDF has also been vested since 1984 with the administration of the lntech Scheme referred to in Chapters I and 3. The lntech Scheme underlines the shift in

...

TABLE 12 JITS Apprentice Output, 1974-84

1971

Trade

1975

1976

1977

6!

!!6

Fine sheelmelalwork

00

1978

1979

1980

1981

1982

!983

1984*

Curnuhuive To1al

!51

!50

1'>5

209

326

243

274

1,685

!0

!0

Precision rna< hining

Machining (grinding) Machining (milling)

6 6

II

20

II

20

Machining (lurning)

6

9

15

Fining 6

Pattern, model & mould making Maimcnance rnachine-lool building

6

16

16

!8

18

-

68

86

63

91

82

53

!Ol

58

99

32

25

25

38

34

59 44

106

Precision mechanics

50

809 318

20

22

24 4

22 9

22

26

12

12

50 23

2'> 6

45

Precision oplics Autolathc setting Plastic mould making

30 4!

II

233 86

23

30

69

Tool & die making

II

Toolroom machining

!5

-

-

·±7

35

63

H

33

16

267 93

~

lmtrumentation

l'l

16

27

3!

89

";:;;:,-

Eknrical Consumer electronics

20 10

13

21

27

81

0

12

24

24

Industrial electroni< s

15

14

27

23

70 79 3,980

0

~

"'

;:;

"'VJ

Total

30

!75

193

270

302

294

326

'>83

677

517

613

Cumulative To1al

30

205

398

668

970

1,264

1,590

2,173

2,850

3,367

3,980

[

:;;-

;:;· VJ

5

"Projected

~

'1:)-

0

Sot'RCE:

ED B.

~

Skills Enhancement and Manpower Development

49

significance to high-technology service industries such as micro-electronics and information technology, in contrast to the stress on manufacturing firms all along since 1979. Nonetheless, the SDF is still skewed towards nurturing manufacturing skills rather than management and supervisory training programmes. Another institution involved in skills enhancement is the National Productivity Board (NPB), which evolved from the National Productivity Centre (NPC) of the EDB. Its programmes are more short-term in nature, aimed at raising producti\·ity consciousness and improving labour-management relations. The SISIR and the Science Council can also be mentioned as institutions involved in the mobilization of scientific and technological knowledge to improve indigenous technology. Finally, the recommendation by the Committee on National Computerization in January 1981 to promote Singapore as a regional centre for computer software and services also has implications for skills enhancementY This is in so far as computer education constitutes a general skill which is increasingly being used in the administration, production and distribution activities of industries. A twofold strategy to train computer professionals and to increase computer awareness, saw the setting up of three specialized institutes. These are the Institute of Systems Science (ISS), set up in 1981, and the JSIST and the Centre for Computer Studies, both in 1982. These institutes, together with the Department of Information Systems and Computer Science at the NUS, and the National Computer Board, which acts as the co-ordinator, spearhead the training programmes for computer personnel. The ISS, planned to be the apex of advanced computer training, is another joint effort with private industry, namely, the IBM. The Centre for Computer Studies, set up jointly by the Ngee Ann Polytechnic and lmernational Computer Ltd of England, represents another instance of link-up with foreign sources of expertise. The government's unrelenting effort to encourage computer applications in industries is further underlined by the formation of a committee which has proposed a four-pronged plan to push Singapore further up the technological ladder over the next ten yt>ars. J:J This plan calls for: I.

CAD/CAM training for more than 7,000 students at the polytechnics and tertiary institutions annually, supplt>menting the efforts of the EDB which is training another 2,000 in CAD; CAl\1 skills a year; 2. a CAD/CAM centrP for research and development through a tie-up betwt>en the 1'\Tl and an American high-technologv aerospace company (Grumman Corporation); 3. an information centrP to collect and distribute data 011 the latest CAD CA:\I technology; and 1. the establishment of a national committee to oversee CAD· CAM education programmes. By 1987, postgraduate courses in C:ADICAM would be available, followed by original research and development in CAD, CAM, fully automated factories, and designing complex integrated circuits by 1990. It is envisaged that Singapore would become a consultancy centre for factory automation and related activities by 199·1. The success of such a centre would, however, be contingent upon the surrounding countries' needs for such servicing industries, given their choice of technologies and resource conditions.

Technology and Skills in Singaf)()re

50

Impact of Manpower Policy and Labour Deployment \\'ith the curnutlliH· attainment of targets in progrcssin' stages since manpower dnclopment policy ,,·as actively pursued from the 1970s, Singapore's labour force \Hmld snn' both the restructured manufacturing and service sectors. The supply of 'arious catt'gorit·s and grades of manpm,Tr from the formal institutions and nonformal sclwmes has been to precipitate their demand and deployment, in the course of "·hich the industries and acti,·ities sought after bY the gm·ernment would be simultaneously fostered. As the labour market reaches saturation, the government lids hc(otnc mmr conscious of preparing manpower requirements and skills in "lccted industries in advance of the foreign inn'stors' ani,·al. \\'henncr the opportunitY ~n·ails itself, the government has tapped and mobilized private-sector, especial!\ :\I~ C. participation in skills enhancement. One ad\·antage of such contribution is that actual factory en\·ironment and conditions are prm·ided to supplement theoretical training. Furthermore, the employers themselves knm\ best and can elighten the EDB, for instance, what these firm-specific skills are. Some companies with fairly comprehensive and extensive training programmes include the ~ippon Electronic Company, Fairchild, Siemens l\Icdical Engineering, i\Iatsushita Technical Centre, Cummins, l\Iecomb, l'\ational Semiconductor, E. I !opt. lleligcpore, Pepper! and Fuchs, and SKF l\1anufacturingl 4 The survey o! four industries in Chapter 5 reveals that the firms are generall) satislied with the technical and skilled work-force trained by the various institutions and schemes. Some of the JITS graduates have also set up their own production after working for a few years with some :VINCs or larger firms, and this itself is indicative of tcdmology transfer, as conceptualized in Chapter 2. Some industries, in fact, want to hire more of -,uch trained manpm,Tr, and ncn feel that the gonTnment should relax ih national sen·ice requirements for such trainees under present shortage conditions. The brgn firms may consider that their contributions to the SDF exceed their benefit.-, from it. I lmH'\er, at the rnacro-lnd, cross subsidization has fulfilled the objcctiH' of retraining. Financial assistance for the training acti\ ities of almost 5,000 finns has been granted, and Tablt 13 shows the disbursement of funds from the SDF. TABLEI3 Skill.-, Development Fumi Collections and Commitment:, (In millionS$)

191)1

19R2

198:!

1981

112

113

112

109

Training Grants

11

54

52

63

Interest Grant for :\IechaniLation

II

II

13

11

Annual Collections c:ommitmcnts

Development Consultancy

4

Initiatives in New Technologies Sm ·Ret:: Singapore, t:conomic Suruf'}' of Singapore, ,·,uious vears.

I

34

Skills Enh ancrment and Alan f;ower De1dopm en t

51

For the BEST p rogra mmes. there is some d rop-out as reflected in the number of companies a nd workers registered in the scheme and those who remained to complete it succcssfull y1 ' The to ta l number of workers who have u ndergone such p rog ra m mes has increased from 22,000 in 1983 to "11.000 in 1984. a nd to 21.1 2 1 in J a nuary 1985 (half-year fi g ure). T he d rop -out rate fo r th e learnin g of English has declined from 26 per cent in January 1983 to lil per cent in January 1981, and for Mathemati cs. from 47 per cent in J a nuary 1983 to 18 per cent in Julv 198·1. However, the n umber of workers who passed in Eng li sh a nd ;'vla thema tics as pct-u:n uges o f the to ta l enrolled was il5 per cent a nd 47 per cent respect ivel y in 1984, a lthoug h the percenta ges for those wh o sat and passed the examinati o ns wnc higher at 92 per cent a nd 82 per cent respectively. The n umber of companies which dropped out do ubled in .Janua ry 1985, compared with Jul y 198'!, despite the la rger number of 79 new companies which joined in Janua ry 1984, com pared with GO in Jul y 19Rl. Em p loyers are uncerta in of the standing of the Cenifica te in Basic Education, while few wo rkers go furth er a fter completing the BEST courses . The VIT B reported tha t onl y 8 H) wo rkers h ave g one to its Eng li sh a nd :vla them a tics modules. \\· hik o nl y 270 ha ve gone for its academic and skills cou rses. The government has clearl y a nd dili gently laid the founda ti o ns for hi ghtechnology in terms of manpower p lanning a nd skills development. Still , one expen rec ko n s tha t Singapo re needs u p to fifteen yea rs to achieve the a im of beco ming ;1 centre lo r hig h-techno logy. research a nd dl'\·cl opment , as there is not yet suflicient scientific m a npower. a nd its university intake would have to be doub led within this tirne. 1' On the other ha nd , the hig h-technol ogy servicing industries presently do not ha n ' as much problem s rccruit.ing en g ineering gr~1du a t es as fin di ng experienced eng ineers a nd gradu ates with practical experiencc. 17 To assess in more quantitat ive terrns, by re lating th e enrolment a nd supp ly of students in the educa ti onal institutions to demand and df' ployment in the la bo ur ma rket, o r to m easure the level a nd extent o f indigcniza ti o n of skills atta ined o r effected , a re both o nerous tas ks. Ro ugh o r proxy indica to rs such as value-added per e mp~9. See Tan Huck Yang, "joint Industrial Training Ct'ntrcs in Singapore: An Ev ), cols. li'J'J-60; and Stmi/.1 Timt.l, I 0 J unc 191-G. rhis is the opinion of the outgoing Israeli ;\linisteJ of .'it it·ntt· and Dt'\clopnwnt, ha-,t·d 011 his t·xpnit·nu·s a.s the ]>lime mmt'l of b1ad\ high-1('( hnolog\ l""h. Set• Swuia) Tunn. 16 St'fllt·mbt·J 19H L Sin~ajJo}(> Bu.llllt.\.1, ;\l:nch l'lHl. p. 9.

5

Technology Enhancement in the Surveyed Industries

Development and Performance of the Surveyed Industries The surveyed industries, namely, machinery except electrical and electronics (industrial code 382, or industrial machinery, in short), instrumentation equipment, photographic and optical goods (industrial code 386, precision equipment), electrical machinery, apparatus, appliances and supplies (industrial code 383, electrical), and electronic products and components (industrial code 384, electronics) can be broadly typed as components of the capital goods industry. 1 Some capital goods, like those in the metal-working or engineering industries, are difficult to distinguish from consumer durables, though products such as radios and television sets are more distinctly consumer goods. A strong indigenous capital goods sector is desirable because it contributes to the expansion of output and employment, and at the same time enhances capital formation and raist's the productivity of industrial invt'stments. Furthermore, capital goods are decisive instrumt'nts for generating and diffusing tt'chnology and changt' throughout the economy. In industrializnl countries, the share of value-added of tht'st' capital goods industries in manufacturing is usually over 40 per cent. The surveyed industries' value-added as a proportion of total manufapt eleoticd Lifts, e..,< ala tors, & 2

91,1%

8:'"l.9:J~

S,S44

2.92:3

107372

I 01./:lO

;,,642

(j

1-l'l 3.b7fi

11.27:, 208,151

10

:)~9

~2,:"">~Ui

I:\,809 198,%1 21Yl'l

!66 9.189 I ,057

I

I.'!H7,'1:l2

t.H67,H2S

6.821

92'3.2:3:3

907.229

221.0:\1 11,:,77 0 Ji0.'!17

217.:J2~

ll'J,507 lli,004 li,'Ji2

2,164 !)!)~

in~uuments Tran~fonners

38:321 'lH'l22

lnpuh

lndu~tr)

Code

2j,,)26 86.160 lfi.l:"l2 7.002 17.798 200.01H

1~.888

1.417

s\vitche~

38332} 38333 38339 :3H:Hl} 'lH'l.J2 38313 'l8'l50 38%0

Eledrical cable.197

71.'l:l7 SOI.O:)·l 170.I!J:, 117. 1:,o

ti7,'lll'l 189.0% l'l0.2!1 J:lti.H71

6,833 l !,959 20.254 10,576

II

797

19.7:ll

IH.l'l2

I.S79

9

l.OiiH

2fi,ti27

H!Hti

2,HO

16

l,:illi

22.199

19.Fll

2.745

10

1.786

78.894

7S.OH2

3,812

1\Iicrophotw~. lou(hpeakns, & amplifict"' Cramophon{' n·lntmcnb &

supplit·~

Pho10guphic & optical good:-.

\Vatchc" & do,767

~i.l2 I IO'lK>6

23.920 323,079 !5,808

2.1'>1 292,99~

'> ..'>93 .J:\.'>39 li.979

1,610 30.'>62 S,977

ll~l.HOO

7:>6,9:\{j 180,-12:,

7,018.611 l.:lii'l.\06 .)~)1 ,9'38 78,189 682381i

1.911,!80 :197.27! 166.'>:3.) 32,7!')2 170..J:l9

7.029.'>62

li!O,HS!

752,118 '>8,}89 61,0W 19,717 6:!,066

:!91.912 95,779 1:\,612 :\,178 10.617

'>l.tiOO 11.25:; 7',1.709

21,3-!0 H,951 112.6'!9

2.918 I:'J./73 10,!91

{,:)~.)

l.li21 769 1,676 '30,238 2.1,.')71

11,898 1..'!71 :l,H\iO 1.000

:);"d) It)

12.{i83 li8.826

26.292

7.tl69

22 ..Jti1

1.3~7.717

10'>.677 77,129 686.80!

I l,.i27 li.I.Jii,l08 I ,256,262 :30H,OH:>

3'l.I21J

IOHJO

:JH2 2.202 7.12'>

1.1,:)07 18.119 H2,62.J

87.8'>6

:10.:)30

'J'J./69 7ti7 .:ZI :,

,)6.222 2~)2,:~,20

88.701i 100.6')') 777.981

!0.21il

1'>'>.6'J:l

2.02'>.7'J:l

:\92,73~

2.ll'>l.820

1,9!2,992

189,.'>87

I:li.761

1.729 6,07!

27.621

llli.ll.'l

l~l.li!O

ti!)2.269

1,087

80.8'78 :>-!.SOt)

li81,6!7 268,691

70,077 182.1 !I 200.2'>9 120.1'> I

11.'>,669 68:3.117 li70,921i 268,088

90,626 '>89,:317 1.')0,987 2'>1.210

:31,661 83.'JH2 92.S7·1 'l9.921

I:UHH :H.l97 29.'>'H :lli.'l!H

2')0

H.IW

38,888

lH.Hti'i

:39, I H:l

:l3,S'>I

10,151

2,002

79

12.681

l:i,071

IH,:\69

11.682

!2.9'>8

10,092

2·!,200

lliO

15,818

li2.:F>1

:l9.1i'J:l

62,2 J:l

:Jti5 17

19,1:39

}.~H9

2SH

17.'>38

122.:!77

l.'L22;J

121.9HI

118.181

20.2.39

1.397

10,89:l

TABLE IS C:umulati\'e Foreign Imestment in the l\1anufacturing Sector, IJ\ Indusu:y Croup- (;ross Fixed Assets as at End 1970-83 (In millionS$)

8 1'170 31

Food Hnnagc & roh:tu o

1'171

1972

' "!

10

Tn.tik

I'Ji:l

1971

I'J7:,

1971i

1977

1'17H

1'179

I'JHU

I'IHI

l9H~·

3

ti2

17

~~~

~~~

\\'ood & Cod' P1odw

17

70

'10

I'll

lti2

Iii()

I :, ~~

lti2

I h~l

220

21'1

~.-,1

1.1'>

}'J')

IH

':!.7

'\1

.'F>

ll

11

12

II

:,9

H'J

102

m

1.)2

125

70

h:)

til

7'l

90

100

ti~l

7.1

96

122

17tl

!HI

649

h

Papt·J & l\qx·1 PHxlw t-.

lndu..,tJial (:hcmit:tl.., Otht·t ( :hcmit al PJtx:!tt< I'> ex< q>t PLt'>tic Pe11olcum K: Pcuokttlll Ptodu< I'>

til

'17

Iii

ti2

li8

HI

102

ll'l

II'>

1'>1

173

2ti7

100

11.'>

.-)~):)

7:/2

I.I'>K

I ,2ti7

IJ'IIi

I .1~6

I .'>20

l,iil7

~JIH

2.627

'UiiO

3.1'10

.1,'103

!,0:'>3

22

~l ()

~12

1.1

II

lli

til

r,

'IH

98

IHO

1'>7

1')9

:\on-mct:tllH :\linn a! Ptodw h

~ll

.11

11

l ~~

:,2

~) 7

71

Wl

H~

'l~l

1~:,

131

129

152

Rl'.,i< \kt.d lndu ... uic..,

J(j

2:'">

'lH

'2.7

~H

~~ 0

PJa..,tH Ptodw h

H

FaiHit

lliH

20!1

217

287

326

387

339

121

192

531

2t)

9/

!(~)

!Iii

I 12

1'>0

In

212

272

3H

240

239

2'>9

IS

'>9

H

76

72

70

5,212

6,.11'1

7,:;~o

s,6.>9

9,60~\

10,874

17

i(i

,n-,

I ,57;)

:!,2H3

~n

:HJ

2'>

21

:tl

2.1i">!l

'),()01

.1,:\HO

.1,i'l'l

!,IF>

;!

c

g "'"';:!

Vl

~

E;'

Note: Data for 1974-78 arc not comparable with those of previous years tm account of reclassification of companies according to the Sinf!;apore Industrial Classification 1969. Data for 1979-82 are comparable with those of previous years on account of reclassification of companies according to the SSIC Rc\'ised 1978. * Reclassification of sources of foreign im·estment from 1982. Sm·Rcl': Singapore, Economic Dewlopmenl Board Annual Report, 1982 8'3, and 1983 84.

~

"

;:,-

B2

Cood~

Othn' :\!a nub< Ill! ing Indu'>ll it·:-.

Total

7!1

l

2'>8

J\LHhim'l\ cxccpt EkctJicdi

Elt·t llit al Elct llmw ,\l,:u hJllc", :\ppd!;JIJJ-., .\ppliaiH c..,, & Supplic~

:>1 I~

s Vl s

(Jq

~ c ~

~ ,..,

TABLE 19 Growth in the Industrial Machinery Precision Equipment Industry and Electrical!Electronics Industry, 1971-83

;:,;:l

~

""1'>1 ;:l

;:,-

Fstahli-"ltmcnt'i

Ycat

Industr)

Employment

Owpw

1971 197'> 19HO 1983 :\nnual ;nnagc

107 21H 2'F> 311

growth ( ~)

10.1 17 32

1

Pteci..,ion Equipment

Annual ~1\'('Jagc gtowth (a~)

Ekcnical

1971 197'> 1980 19H:l Annual

I ~171 197:"> 1980 1983 Annual .tH'tagc gtowth

Sot'RC.L:

'>'>li.O 1,086.0 1,668.9

8.2 19.7 36.7 38.8

11.7

13.1

13.8

19.9 26.3 36.1i

:,\.7

15 12.6 16.:, 2:1.1

li.l

8.3

ll.6

2~f>.9

17.7 'l:l.H

10.7

17.8

26.1

2:->.tl

Hi

I ,2H8 6.911 IO.I:ili :>.197

1823 :182.8 268.7

'>.H 87.8 172.1 120.2

1'>3.1 O:Hi.H 2:>1.2

8.6

12.'i

2l.ti

28.7

'>0 87 II!) 112

6,6:>9

12.278 1'>.933 1'>.311

118.1 Ill.'> 97l.l 1,200.2

I:U 1'>0.7 3'>6.H HiJ

'>8l.li 7263 11.9

i:>l.7

\' al uc-added per OutptH

\'aluc-added per Employment

Export_., Output

61.2

78.2

65 12.3 22. t 29.0

'i9.2 13.7 11.8 12.-l

0.0082 0.0197 0.0367 0.0388

22.7 -18.2

0.00-15 0.0126 O.OIIi:> 0.0231

i'J.()

ll.7

73.7 6'>.3 81.1

"' ;:l

R ::l

" i! 5 ;:;:. "

[/)

"~

""""'...... ;:l

8-l.O 88.0 93.'>

"'-

"':;"::;;·

""

36.7 36.1 36.6 :\7.1

O.Oiili;·, 0.0123 0.0221 0.0290

·lli.O

0 0108 0.016:"> 0.023:l 0.0290

71.1 60.0 60.'>

a\t'U!:!,('

gtm\·th ( 0 o)

Eke uoni("'

137.H

20.H ·F>.O 82.0 91.1

1,662.7 2,0'>0.1

;~):,

6.621 lti.7'>:l 20,271 22.!3:l

\'alue-addcd pet \\'orkcr

($'000)

'>1.0 330.0 7H.H 870.2

1971 197:> 1980 198:1

Output per \\'orker

$m

:\o.

Indu..,trial :\Ia< him·

\'aluc-added

Din·ct Export_.,

0

( ~)

7.0

7.2

21.3

21.1

2~

II ,817 2-l,:l'>l 71.727 t):·J,9 ..Jl

278.3 1,229.3 [>,3-H.O 7.018.6

127.'! 102.2 I ,668.8 1,9115

I ,122.:l 4,508.1 6.116.1

1'>.1

30.9

25.3

23.7

63 172 20.3 17.9

Singapore, Department of

S~atistio,

1'\.2

I:U

2:\.:, 11.'> llki.l

10.8 Iii.'> 2:l.3 29.0

I'Ll

7.0

!'JO.:"'J

~)2.7

31.2 27.2

91.3

Hl.l 87.6

Censu.1 of Industrial Production, 198'3. Ol

62

Technology and Skills in Singapore

efforts, there was a spurt of investment in that year, particularly by U.S. firms in the semiconductor sector. Since then, the electronics industry has quickly grown to become the largest employer in the manufacturing sector with a high degree of export orientation. However, its technological level and the adequacy of its supporting industries were still low up to 1976. In 1978, the government stated its long-term objective of achieving a fully integrated electronics industry 3 Firms were urged to integrate backwards into the manufacture of semi-finished and intermediate products and to extend production to cover assemblies such as television picture tubes and quartz crystals. Up to 1982, however, the electronics sector was still perceived to be modernizing too slowly probably because labour was relatively cheap compared to the high costs and inflexibilities involved in automated processes. 1 Little R&D was clone locally as the market is too small for the Ml\'Cs, which continue to dominate this sector, to locate such activities here. Backward linkages in terms of the development of supporting industries in tool-making and mould-making were also low, probably because of insufficient local entrepreneurial drive compared, for example, to Hong Kong. Furthermore, over the years Singapore has seen a dimunition of its pricecompetitiveness, especially in labour-intensive products. However, to move from labour-intensive assembly operations to sophisticated manufacturing/testing and product design involves a technological leap that is not easily achieved. Some electronic firms, unable or unwilling to make such a jump, rationalize with their parent companies to keep their Singapore bases as regional outposts to concentrate more on marketing, administration and import-export activities (as shown by our survey results later). The EDB is aware of the problems of the industry and has made strenuous efforts to overcome them. Much effort especially has been directed to promoting R&D. The full integration of the sector may now be in sight, with three companies (SGS Semiconductor of Italy, and Fairchild, and Honeywell Stnettek, both of the Cnited States) announcing they will design integrated circuits heres Another six companies are reported to be planning to do so. The designing of integrated circuits is the first step in the whole process of the manufacture of integrated circuits. Apart from employing local engineers for design work, the design centres are also important from an infrastructural point of view. Their presence could pave the way for technological innovations and encourage product development through the use of custom-designed integrated circuits. The other three industries also have the potential for upgrading and technological advancement, as borne out by the emphasis on them in the EDB's list of priority industries (in Chapter I). They are also most likely to benefit from the technological progress made in the electronics sector.

Survey Methodology In designing and mounting the industry survey, preliminary discussions were first held with the Department of Statistics and EDB personnel to tap their resources and to gauge the requirements of such a survey. A mailing list of firms was then drawn up on the basis of the Department of Statistics' Singapore Manufactures and Products Directory, 1982, and the EDB's Directory of Electronic Firms, 1984.

63

Trchnology Enhanament in the Surveyed Industries

Given the objectives of this study, almost all Japanese firms were included in the mailing list. Other firms, Singaporean, American, and European, were chosen with a view to attaining a fair sample of firms in terms of nationality, industrial sector, and siLe. As far as possible, the leading firms, both Japanese and others, were included. Table 20 gives the breakdown of the selection by nationality and industrial sector.

TABLE 20 Sample Size, by Industrv and :\1ain Source of Capital (No. of firms)

Main Capital Source

Japan

Singapore

Other Foreign Countries

21 13

7

24

52

2

17 50

9 6

10 6 8

25 32 21

64

101

24

48

21

194

Industry Industrial Machinery Precision Equipment Electrical Electronics Total

N"ot Stated

Total

Mailed questionnaires were sent and responses received between May and August 198'1. Table 21 shows the response rate of the surveyed firms. Of the 194 firms surveyed, 65 replied, giving an overall response rate of 33.5 per cent. The response rates bv nationality of firms varied slightly, with 32.2 per cent for Japanese firms, 34.0 per cent for other foreign firms, and 39.1 per cent for local firms. To gain a greater understanding and insight into the activities and operations of these firms than can he adequately conveyed by a mailed questionnaire, a follow-up interview of 60 respondent firms was conducted. These firms were generally very co-operatiw and helpful, expanding on their survey returns and showing us around their factories.

Survey Results and Findings Ouerall Characteristics of Sun!('yed Firms The main characteristics of the 65 firms which responded may be summarized as follows: I.

2.

Tht' ownership by type of capital structure and nationality of the responding firms can be broken down as shown in Table 22. \Vholly foreign (72 per cent) and mainly Japant'se (58 pt'r cent) firms dominate the responding firms. Wholly foreign firms form tilt' majority (72.3 per cent), followt'd by joint ventures (20.0 pt'r cent). Japant'se firms constitute 58.5 per cent of the respondents, followed by other foreign firms (27.7 per cent).

:t::

L\BLE 21 Response Rates of the Surveyed Finm (1\:o. of firms unless otlwrwisc stated)

Japan ~

Total"·nt Responded lnltnitwcd Refused in tel\ iews

l

Iii

!'J

Total

Ekctrit a! Elcctwnit

lndmtrial i\lat hint·n· Prt•t ision EqUipllllll!

1\;o. of Qut·Siitmnain·s

Singapore

Otht·r

Total

Japan

Singapmc

Other

Total

Japan

Singapore

Othet

Total

TABLE 24.2

00

lmt",tmcnt l\Ioti\ation;, of Foreign Firms Sur\'eycd, by Type of Industry and ;\.'ationality (No. of finm)

l'ypt• of Industry ~ationalit)

L

'
0

HF">

2

;)2 152

77

21

].',

16

()thct lc">tcign

I

()

Singapotc

2

123

9

78

'lH 7

8'>

()

9H

161

9

173

0

'l1

I:>

17

32

0

9

0 0

()

2

15

0

15

0

I

!">

20

38

0

:>

112

()

112

3

2

()

()

13 13

0

()

18 10 12

PH·ti..,ion Eqltipment

Japant'"-'

"

Ell'< tri"d Japant'"ot' Othct foreign Siug~qxnc

h)

II

lli2

71

lOti :'>36

2:'">

0

2~>

J~IJ>:'">

/()

Singapore

101

21

Other foreign Singapore

All

10 7 2

9 0

2 26 :8

Ele< Iron it JaJKlllt'.'lt'

r,

122

87

lH

209 2Kl

0

2.'l'> 6

()

6

()

191 831

2·10

11i2

:\27

li3

2

17

12:'">

197

10

102 :l90 207

()

::: ;::\

it

......

2

1

3

0 1

0 0

:J

1

0 0 .'\

\\'F \\'L

:,

J\'

2 7

0

Subtotal

;;:.

"

"'".,_

EquiJHlll'lll

\\'L ]\' Subtotal

;::!

;;·

Prcci'>ion \\'F

.,;,-'"" ~ "'3 "~

IIH.lustrial Ma(hinerj \\'F

8

2

5 0 0 5

1 0 0 1

2

2

0 0

I 1 I

1 0 1

()

0 0

0 0

()

0 0

:\

1 H

1 0 1

0

2

0 0

0 0 I I

()

7

0

;,

()

()

()

I I

2

1 0 I

2

17 I 2 20

0 1 0 I

0 0 0

I 0 0 I

7 0 I H

0 0

II 12 0 2

'I li 1 2

()

2

0 0

3 0

7

0

0

2

2

2 0 0 2 0 0 I I

2 0 1 .~

I 0 I

I 0 0 I

2 0 (I

2

1

y

()

0

0 1

1

5

I I I :l

()

'I I

9 0

I

I

()

()

2

()

0 I

0 0 0

10

;:, .,_

>:::

"'

~-

()

0 I I

9

Ele( tlolli(., \\'F

10

\\'1. ]\'

1 I

Subtotal

12

Total

3'\ 2.J

lj

:\

I '\

\\'F \\'L

J\'

(j

..,

2

:,o 37 :\ 10

2

3 0 0

()

1 0

0

()

:\

2

I

.J I 1

.j .~

6 3 1 2

0 I

()

lj

0 I 10

21 II 1 ti

8 I I 10 28

21 3 I

.j

2

0

0

(I

()

()

I

2

10

II

I

9 H 0 I

7 I

2H 20

2:\ 17 1

H

1 2

:; :,

:,

2'\ I 2

26

li :l

():J

7 0 I

2

1:\

17

00

\\'F

=

whollv foreign

\\'L

=

whollv ltxal

]\'

=

joint venture

""

TABLE 30.2 Degree of Autonomy, by Nationality of Firm and Industry in Surveyed Firms (No. of firms)

~01

T\JX'Of

Indu.'-.trv Firm

High

Medium

Lov·:

Stated

High

:\kdium

LO\\.

Not Stated

High

l\Iedium

Lo\\·

Not Stated

Indu.'!tiial :\lac hincn Japanc . .e Other fm eign Singapo1c Subtotal

j

2

j

"

0 I

(j

I

2

()

3

ti

()

0

0

3 1:,

0 I

()

2

2 2

2 2 7

0 0 0 0

0 0

()

()

0

0 0 0 0

3

I 0

II

3

0 3

I I I

I 0

2 I

:;

s

0

2

0

3

I

0 3

0 3

I H

()

Prtnses scratch-proof, was bought from a Japanese firm, again for a lump-sum pannent plus royalties based on sales. The Japanese firm sold the chemicals lor the coating procf'ss, together with a manual and the design of the machine. The local firm, in fact, adapted and simplified the machine after \isiting the Japanese factory. In both instances, the American and Japanese licensers have disallowed the bifocal flat-top and scratch-proof lenses to be marketed by the local firm in the l:nited States and Japan respectively, as well as the transfer of the lic!='nsing agreements. The research section, with the assistance of an American mathematician, rt·cruited on a contract ba,;,is, and a Product Development Assistance Scheme (PDAS) grant of S$100.000 from the EDB, has developed progressive bifocal lenses. The progression in degrees has eliminated the \'isible dividing line of such lenses. The patent for this invention has been approved in the United States and has also been filed on an international basis. The company has not sold this technology to others. Apart from such R&D efforts, new technology has also been acquired via contractual arrangements \\·ith supplins. The relationship between suppliers and optical manufacturers is a svmbiotic one. The local finn ha.-,, for instance, signed a contract with a supplier whereby it gets the first right to evaluate and use any material the supplier comes up with, and in return would report to the supplier the possible applications of the material. In addition to suppliers, international trade magazines, patent magazines and international trade lairs arc other sources of new ideas. In all its endeavours, the local company has primarilv used its own manpower and resouncs with minimal token financial assistance from the EDB's PDAS grant. \\'hile the gonTnnicnt\ attitudes and policies have been deemed as co-operative, the company is less cnthw,iastic about what the ARC. SISIR, 1\'PB. and SDF can offer, though its liaison with the Nl TS is somewhat more satisfactorv. This company may haw proved that the current mechanisms lor technologv transfer can be made more effective and efficient by locals, given the right combination of inno\ative adaptations, skill;,, and "home" inn·ntions. A third local company, incorporated in 1979 to support its group's activities in oil, soap, and canned prodw'l'., has diversified into precision components for a wide

Technology Enhrmccrncnl in thr Sun•e:ved Industries

89

range of equipments. For example, a leading computer finn in Singapore now purcha,es fine-blanking parts from it to send to the fonner's sub,idiaries elsewhere. Thi' finn's technology is mainly embodied in the machine' it pun ha'c' from .Japaneo-e and Swiss suppliers, who also send their engineers onT, as well as recci\e technicians for training. The Swiss engineers have been contracted to come ;mnuallv for a period of fin· years, beginning in 1982. \\'hen it acquired C:\'C (computet munerical control) machines from .Japan, for its tool-and-die operations, Japanese engineers came to install the machinco., and training for the machine operators was conducted in the training centre of the Cl\:C machine agent in Singapore for one week. The company has its own R&D division and does its own laboratory testing of materials and tool-and-die designing. The other two local firms, both in electronics, were incorporated in 1981. One was startt>d by a chemist who had worked for twelve years-in an American :\1:\'C: as a researcher, and left because of conflict with management policies. A number of like-minded staff lt'ft with him to stall this company to supply printed circuit boards to the many foreign customers with whom they had established contacts when they were in the American Ml\'C. Presently, 60 pt'T cent of the company\ sales are to foreign multinational companies, while the rest are to local MNCs. The managing director operates as a ont'-rnan research and developnlt'nt unit, keeping up-to-date through specialized magazines on printed-circuit fabrication. The finn is aware of the limits of the present arrangement for keeping abreast with new technologies - that is, with only one person who relies solely on printed literature. It has asked the FDB to introdwt' some technological link-up or a joint venture \\·ith American firm .., to work out tt'chnical sharing arrangements. The other local electronics company, a member of a diversified group of companies, produces thick frames for hybrid circuits and communications equipment. It has an R&D unit with 25 professionals, comprising about 10 univnsity graduate enginens and the rest, polytechnic diploma holders. The company has acquired technology through joint-\'t'll\L!I'e link-ups with foreign companies and through licew,ing arrangements under which it manufactures the products of the foreign manufacturers. l!ndcr these arrangements, most of the finn's R&D as well as pwduction cnginens have rccein·d various forms of training overseas. In addition, technology is also purchased if theory and principles and not just opt'rational know-how is sought. Royalties are paid for licences and purchased know-how. The holding company of the group of companies to which this clccnonics company belongs has, without doubt, one of the largest indigenous R&D set-ups in Singapore, discounting the l\1;\/C:s. The group as a whole straddles a technological domain, namely, armaments and electronics. Any results from R&D which has commercial potential arc exploited. Licew,ing and joint ventures are the main channels through which technology is obtained. The main rationale for licensing is production -and technology translcr, though important on its own account, is only a necessary condition for such production transfer. In the case of joint ventures, the main rationale cited by the company can still be production -especially in joint \·enturcs with bigger M:\'Cs. Here, MNCs with the desired product lim·s, markets and technological capability are solicited through joint-venture agreements to set up production facilities in Singapore. However, joint vcntun·, with smaller firms formed, say, by a group of

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Technology and Skills in Singapore

scil'IHists, who have the ideas but art' lacking in capital, art' also sought. The main rational