Five Country Competitiveness

Singapore's Competitive Advantage in the Hard Disk Drive Industry

I Singapore is known as one of the most competi­tive nations in the world. Between 1995 and 12001, the country ranked second in the na­tional competitiveness scoreboard released by -based IMD (International Institute for Manage-it Development). Hard disk drive (HDD) production in Singapore reached about $10 billion accounted for approximately 70 percent of the word's production of HDDs in 1999.

HDDs are highly standardized and easily transportable. Demand is primarily driven by their technical and operating characteristics. This allows manufacturing to be located in distant locations away from con­sumers. Many world MNEs and do­mestic companies use Singapore as the platform of HDD manufacturing and as the gateway to international markets, particularly to other Asian countries. Seagate, a world leader in the industry and the largest industrial employer in Singapore, has built a $130 million facility there for assembling disk drives and making printed circuit boards.

Singapore's workforce was rated the best in the world by the Business Environment Risk Intelligence (BERl), based on such factors as relative productivity, worker attitude, technical skills, and legal frame­work. Although not rich in natural resources, Singa­pore is situated in a strategic location on a major trading route across continents and is a focal point for Southeast Asian shipping routes. Singapore is also a thriving financial center served by 149 commercial banks, 77 merchant banks, and 8 inter­national money brokers. Additionally, Singapore has first-class infrastructure in telecommunications and communications. The National Science and Technol­ogy Board (NSTB) was established in Singapore in 1991 in order to promote R&D through a financial assistance program, coordinating with several re­search institutions such as the Institute of Microelec­tronics (IME) and the Institute of Manufacturing Technology (IMF).

To promote growth and productivity in the elec­tronics industry, the Singaporean government established several major agencies. Apart from the NSTB, the Economic Development Board (EDB)-devises in­centives to attract competitive companies into the nation's electronics sector. In addition, the National Computer Board (NCB) was created to drive Singa­pore to excel in the information age and to exploit the information technology (IT) niche. The NCB spearheads the implementation of Singapore's na­tional IT master plan—ITZOOO. The government also initiated eight large-scale industrial parks in China, Indonesia, India, and Vietnam. These flagship pro­jects, each of which is geographically concentrated in the same area, are positioned as premier invest­ment locations, only for Singaporean investors but also for other foreign firms and local enterprises. Singapore is increasingly dependent on the value-added edge that a highly skilled workforce brings. Therefore, through research aid and program devel­opment, the government assists higher educational institutions in providing a skilled workforce. 

Questions for Discussion:

1.      Why do countries differ in their over cornpetitiveness in the global marketplace?

2.  Why is a country competitiveness salient In some industries? For example, why do Swiss watches or pharmaceuticals dominate the world as do German upscale cars or Italian gold and silver jewelry?

3.  What roles should firms and individuals play in shaping country competitiveness? For example, can Japanese firms' total quality management Improve country competitiveness?

4.      How does a foreign country's competitiveness Influence the strategies and decisions of MNEs?