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The Manufacturing Sector of Singapore

Singapore is a country that has relied on the manufacturing industry to develop its economy. A manufacturing sector is a unit in the economy that deals with the processing, production, and development of goods from raw materials. It involves the biomedical manufacturing, electronics, precision engineering, general manufacturing, transport engineering, and chemicals.

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Importance of Manufacturing Sector to Singapore’s Economic Growth and Development

Singapore’s economy relies primarily on exports. Therefore, it has to produce goods internally for trade with its neighbors. Recently, 2015, it became the first country from the ASEAN region to sign Free Trade Agreement with the European Union. Its future of manufacturing is aerospace, precision engineering, and the biotechnology. Singapore will rely on the manufacturing sector to balance trade with its business partners. About 20% of Singapore’s GDP comes from the manufacturing sector (Katsikas 2015). It also employs about 20% of the workforce in the country.

Demand and Supply Factors that Increase Manufacturing Output

The country has opened up its borders to neighboring countries and distant nations. It has enabled the government to increase its network of trade. The government favors globalization and free trade. As a result, it has demands for its produce both within and outside the boundaries. Countries like China, Indonesia, Japan, South Korea, the US, and Hong Kong are its trading partners (Kozulj, 2011). Saudi Arabia and Malaysia are also its markets. Due to the availability of ready market, it has created demand for its produce. One of its greatest imports is oil (Palangkaraya & Yong 2009). It is critical to the production industry to enable the goods to be ready for uptake. The nation is also a member of NATO, ASEAN, and other multinational trade organizations. As a result, it has created the need for its products in the market. It is anticipating growth by upgrading its workforce in the electronics sector.

Challenges and Problems in the Manufacturing Sector

One of the biggest challenges that Singapore is facing is the lack of skilled labor. The country has to train a majority of its workforce to prepare for the journey it is undertaking in all its sectors. The sector is also facing competition from the service industry. The manufacturing unit must continually grow and create opportunities for the country (Lee 2014). The lack of sufficient ram materials for the developing industries is also a major concern. The cost of production also has to come down for its private businesses to thrive. The country has to find alternative means to energy. The cost of energy affects the production levels. It will culminate in the reduction of the prices. The sector also relies on oil from imports. It increases the cost of production. The government supports the manufacturing sector by funding the studies that lead to innovation. It has released funding to research institutions.

The universities have joined the campaign to develop the production industry. For instance, the Nanyang Technological University has already started a course that will guide in the set up of research mechanisms. The Institute will also seek to establish the pan-Asian consumer needs, wants and preferences. It will issue out guidelines to organizations. They can use them to develop their products and brands in a modern way. It will also guide them to develop the Asian and market-related brands, goods and services. It will also nurture the next generation of marketing talents needed to support the growing consumer research and brand management activities in Singapore.

Government’s Role

Singapore’s capacity for Continuing Education and Training has expanded in recent years to local institutions of higher learning, particularly in the polytechnics. The Singapore Workforce Development Agency has also partnered various training providers to offer management and technical proficiency courses for working adults in different fields under its Singapore Workforce Skills Qualifications scheme (Bandopadhay 2009).

The Singapore Economic Development Board is promoting its ‘Host to Home’ strategy. It is a vision to encourage companies to anchor themselves in Singapore and turn their local operations into a home away from home. They can nurture their talent and improve their business and innovation.

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The government through the Ministry of Education is working together with the Economic Development Board to develop a syllabus that fits the market needs. The relationship has produced an Industrial Postgraduate Program that is critical to the sector. Program candidates enroll in participating universities in Singapore as full-time Ph.D. students. The beneficiaries of this visionary course also take the time to work on current industry projects. They join the Research and Development team both locally and internationally to enhance growth. The students graduate with a Ph.D. degree in the field (Katsikas 2015). The government seeks to increase the number of trained graduates in the R & D sector who will help nurture the manufacturing industry. The skills will speed up development in the corporate and private sector for an advanced economy.

The government has qualified advisors. It is moving the economy to include more of the activities that have higher value additions (Lee 2014). The sector should also rely less on foreign workers. It has a clear aim. The government is also considering the best options on improving the country’s overall productivity and competitiveness.

The global pharmaceutical and MedTech industries share the same vision. They want to increase revenue by improving Research and Development productivity and the efficiency of new market entry (Kim & Cho 2015). There are very high considerations for product R&D, manufacturing processes, and supply chain management. The stakeholders are also working on the market entry that is needed to drive the industries’ continual growth.

Singapore is well positioned to facilitate the development and implementation of these advanced innovations. Its location is strategic. It is at the center of a rapidly expanding Asian market. It has strong economic fundamentals (Chua et al. 2014). The nation continues in its commitment to long-term growth. It has involved experts to fasten the growth strategy that will build confidence in the local and international investors. Singapore’s research institutes and local enterprises have continued to partner with foreign companies and organizations for sustainability of their studies. The relationship has forestalled new business opportunities, developed innovations, and explored new ideas. It has also led to the inclusion of new management and marketing strategies. And hence, these variables have made Singapore a very attractive investment destination.

Future Planning and Strategies

As far as the economy of Singapore is concerned, the tiny state has made the best of some unfavorable conditions. Singapore is just a small country of not more than 800 km². It does not have enough land for farming. Only 1.3% of the population works in the agriculture sector. Agriculture only makes a small contribution to the country’s GDP.

However, Singapore’s location is its competitive advantage in the region. The coastline has natural deep-water ports. It is situated along important shipping routes in Southeast Asia too. It relies in business transactions with its neighboring countries. The government’s effort to invest in education for many years has also borne fruit. The nation’s available labor force has significantly contributed to economic growth.

There is an agribusiness park where the country produces some foodstuffs for local consumption and export. Other agricultural products include orchids for horticulture or ornamental fish (Kim & Cho 2015). Some industries do not contribute much to the growth of the country’s economy

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The manufacturing sector is paramount to the nation. The industry gives the government approximately a third of its contribution to the GDP. It also employs not less than 10% of the population. The petrochemical industry plays a significant role in its import activities. Imported crude oil is useful in the industry for the processing of refined petroleum products.

Singapore produces semiconductors and consumer electronics. It also makes ships and transport equipment. The government is also trying to foster future growth sectors such as aerospace, precision engineering, and the life sciences including biotechnology, medical equipment, and pharmaceutics (Michl, 2016).

Singapore’s business-friendly environment has continually encouraged investment in manufacturing. It has also supported the service sector that drives the economy. The sector employs 80% of workers and creates over 75% of the gross domestic product (Kozulj, 2011).

Some of the service industry players include the banking, finance, and insurance segments. It has become one of the great centers for business in the Asian community. Singapore’s Central Business District has been able to invest in its capital and manage the wealth efficiently. Its management principles are the best in the region.

The country’s pro-trade environment and commitment to free trade had created an easy and efficient place to do business (Chua et al. 2014). The future looks bright for the country because of its investment in high-tech research and development hub.

Due to its attractive business environment, it has tapped into the talent industry for the growth of the city-state. The strategies have helped to shape the environment and promoted the high standard of living. Despite all the efforts, there are still some pending issues that the government needs to address. It has to ensure that it deals with the population’s inequalities.


Bandopadhay, T 2009, ‘Forecasting enclaves, informal sector and urban unemployment a theoretical analysis’, The Singapore Economic Review, vol. 54, no. 1, pp. 89-99.

Chua, S, Lim,Y, Ter, T & Chew, S 2014, ‘Efficiency wage theory: evidence for Singapore manufacturing sector’, The Singapore Economic Review, vol. 59, no. 3, p.1450021.

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Katsikas, A 2015, ‘Confessions of a project finance modeler’, The Journal of Structured Finance, vol. 20, no. 5, p. 150.

Kim, S & Cho, B 2015, ‘Determinants of south Korea’s intra-industry trade with her major trading countries in the manufacturing sector’, Singapore Econ. Rev., vol. 15, no. 1, p.1550091.

Kozulj, R 2011, ‘Development, poverty and energy, in the 21st century’, ME, vol. 02, no. 4, pp. 483-497.

Lee, B 2014, Efficiency and productivity of Singapore’s manufacturing sector 2001-2010: an analysis using bootstrapped truncated approach’, The Singapore Economic Review, vol. 59, no. 5, p. 145.

Michl, T 2016, ‘Capitalists, workers and Thomas Piketty’s capital in the 21st century’, Review of Political Economy, vol. 28, no. 2, pp. 205-219.

Palangkaraya, A & Yong, J 2009, ‘Parallel imports, market size and investment incentive’, The Singapore Economic Review, vol. 54, no. 2, pp. 167-181.

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