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International Business

Using Porter’s Competitive Advantage of Nations: Diamond Factors: Discuss the competitive advantage of Singapore. Use theories & examples to illustrate your answer.

To Porter (2001), Singapore is one of the most impressive economic success stories of the 20th century. Even though it was bequeathed with political unrest after its independence, Singapore has managed to achieve remarkable economical growth in the last four decades. In 1965, Singapore’s per capita GDP stood at a mere US$512. By 1998, it had rose to US$28,200, the second highest in the world after the USA, surpassing even Japan, Germany and Switzerland (Low, L. & Johnston, D. M., 2001). A check on website ‘Statistics Singapore’ shows the latest per capita GDP figure to be at US$35,163 in 2007.

The growth of this “little red dot” could not have been more remarkable. Late Chinese leader Deng Xiaoping was so impressed by the country during his visit in 1978 that he sent hundreds of Chinese delegates to study the island so as “to plant thousands of Singapore in China”. Dubai, one of the seven emirates and the most populous city of the United Arab Emirates (UAE), also modelled after Singapore on how it welcomes multi-national enterprises (MNEs) with generous incentives and tax rebates. Till date, thousands of planners have been sent from all over the world to study about the “Singapore model” so that it could be replicated back in their home country.

Singapore’s Economic Development

The rapid economic growth of Singapore was achieved through industrial restructuring and upgrading. While labour-intensive manufacturing was responsible for Singapore’s economic growth in the first decade after its independence, technological upgrading in manufacturing propelled its high sustained economic growth in the subsequent two decades.

Foreign direct investment (FDI) has been and still is the principal source of external capital for growth in Singapore. With more intense competition from Singapore’s...