A Knowledge-Based Economy: The Case of Singapore

By Caroline Wong.

Published by The Organization Collection

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Article: Print $US10.00
Article: Electronic $US5.00

In the last decade, Singapore became one of the most ICT (information and communication technology)-specialized economies in the world having achieved one of the top 10 highest Knowledge Economy Index (KEI) in the World Bank comparisons (World Bank-Knowledge Assessment Methodology).

Foreign direct investment (FDI) has been an important factor in Singapore’s economic competitiveness (Chia, 2000) and its success as a knowledge-based economy. Singapore adopts a liberal FDI policy that saw the establishment of 6,000 multinational companies (MNCs) set up their operations in Singapore (EDB Media Releases, 2003). As such, Singapore has continuously relied primarily on knowledge transfers through MNCs and foreign talents (Toh et al., 2002). The Economic Development Board of Singapore (EDB) recognized the need for Singapore to compete in the global economy with a broader knowledge-based economy. The 1998 Report of the Committee on Singapore’s Competitiveness (CSC) and the EDB’s Industry 21 Master Plan set the vision for Singapore to become a globally competitive knowledge-based economy.

The knowledge-based industries in Singapore have so far contributed to a rising increase in the GDP from 48 percent between 1983 and 1985 to 56 percent in 2001 (APEC Economic Committee Report, 2003). To that extent, Singapore’s efforts in creating a KBE through knowledge acquisition and dissemination within the last decade have been a commendable effort (Wong, 2004). Although knowledge transfer has provided a significant share of the innovation activities and knowledge spill-over in Singapore, the challenge lies in the creation, ownership and exploitation of new knowledge by the local entrepreneurs. This high dependence on foreign firms contributed to the lack of a critical mass of indigenous entrepreneurial firms for the global economy (Wong, 2004).

Overall, the social and cultural attitudes in Singapore towards entrepreneurship are much lower than the overall averages for all the OECD countries (Wong et al., 2006) and this reflects a rather conservative perception where entrepreneurship is concerned. The weak entrepreneurial spirit is attributed to a prevailing culture that seems to discourage creativity, risk taking and failure (Wong et al., 2006). This might have implications for Singapore trying to transit to the creative economy.

Having invested heavily in ICT, the Singapore government is now keen to use content and creativity to enter the next wave of development. This has prompted the development of the Creative Industries Development Strategy to enable Singapore to compete in the global knowledge economy aiming to nurture Singapore as a creative centre (ERC Report, 2002). The question remains if Singapore is able to negotiate the paradigm shift from a city-state with an image of conservative ideology and strict censorship to one that involves a free-spirited dynamic creative hub in the making especially when Singapore’s current development utilizes technology and information to navigate and mediate its people, resources and capital (Yue, 2006).

Analysis of the knowledge-based economy suggests that competitive advantage is increasingly derived from investment in intangibles, particularly information and knowledge-based competencies. The film industry is chosen as a microcosm level of analysis to examine the state of the creative economy as the latest phase in Singapore’s economic development as technology and information are increasingly used to navigate and mediate its people, resources and capital. The objective of this research is to examine the types of competencies that enable firms in the industry to stay competitive in the contemporary knowledge-based economy in the light of technological development in the industry. In so doing, it seeks to shed light on what matters for the industry and the role that government has in shaping the creative economy.

Keywords: Knowledge-based Economy, Knowledge Capabilities, Knowledge Competencies

International Journal of Knowledge, Culture and Change Management, Volume 8, Issue 6, pp.169-180. Article: Print (Spiral Bound). Article: Electronic (PDF File; 581.198KB).

Dr Caroline Wong

PhD candidate, College of Business and Economics, Australian National University, Australian National University, Canberra, ACT, Australia

Research Interests include: Cultural Capital and Creative Cities, Knowledge Management, Knowledge-Based Development of Cities and Regions, Creativity and Management, Entrepreneurship


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