THE LOCALIZATION OF MODERN MANUFACTURING INDUSTRIES IN FOUR AREAS OF SINGAPORE : A STUDY OF LOCATION FACTORS

Abstract

This dissertation presents a study of a random sample of 116 industrial firms in Singapore, with special emphasis on their location factors. The four main areas of industrial localization in Singapore are demarcated for study, the aim being to discover the reasons why firms in each area chose their particular sites. Prior to 1960, industrial development in Singapore had been at a slow rate, largely because of the dominance of the trade sector in the economy. The problem of unemployment and the threat of a decline in Singapore's entrepot trade were among the more compelling reasons behind the Government's concerted effort to industrialize the State in the 1960s. Positive steps taken by the Government included the development of industrial estates and the introduction of fiscal incentives designed to raise investors' profit expectations. The 116 survey establishments in the four study areas are analysed in some detail to establish the background to their location decisions. The individual firm's choice of a site may be influenced by such plant characteristics as the type of production engaged in, the area of land required, the number of factory workers, and the markets it will serve. Significant differences were noted between the four areal groups of survey industries in regard to types of industry, plant area, capital investment, labour intensity and so on, and consequently certain location factors tended to be more important in some areas but not in others. The more labour-intensive nature of a number of industries, for example, has led to their location in the Alexandra-Queenstown and Kallang Basin industrial areas; here they can draw upon the population in low-cost housing estates close by for their labour. In Jurong, on the other hand, this factor of proximity to labour was not cited; instead, government direction was the most significant single factor explaining the location of plants in that estate. Practically all heavy and noxious industries are compelled to locate their plants in Jurong. Nineteen survey establishments had relocated their plants. Their reasons for relocation range from lack of space and other problems at the original site to the attractions of a new site. Dissatisfaction with their present sites was expressed by 23 other firms, but the high cost of disinvestment is deterring their movement to alternative sites. Singapore's industrial prospects look good, but these prospects are ultimately dependent on external factors beyond the Republic's control.