RELOCATION DECISION OF INDUSTRIALISTS IN SINGAPORE

Abstract

With the coming of the Pacific Century, where Asia is expected to experience phenomenal growth, besides the challenge of being a developed country, Singapore has to improve its overall competitiveness if it is not to fall behind the emerging economies, such as Malaysia, Indonesia, Thailand, Vietnam. According to Mr Yeo Cheow Tong, Minister for Trade and Industry, since Singapore does not have the critical mass to become a sizeable industrialised economy, it only means that the going will get tough. Having learnt the lessons that Europe experienced, Singapore has to adapt fast in order to keep its business environment competitive. Market sentiments, however, carry worrisome elements. Layoffs in the manufacturing sector was hitting the headlines more frequently as high costs and scarce labour pool push many companies out of Singapore in search of cheaper haven of production. Besides the shifting out of many local industrialists, multinational corporations such as AT&T and SGS Thomson also experienced massive retrenchments. Hence, according to Chuang, it sets one wondering whether all these market phenomena spells the death of manufacturing as Singapore joins the ranks of developed nations next year. This dissertation is an attempt to study the reasons for industrialists shifting out of Singapore in search of alternative business environments. It also aims to elucidate an understanding of locational dynamics of manufacturing investors in Singapore. The study concludes with findings about the push-pull factors that initiate industrialists to uproot their operations in Singapore and to relocate elsewhere. In relocating manufacturing plants out of Singapore, industrialists gave more weightage to the production factors such as labour and raw materials for influencing their decision to relocate. At the end of the spectrum of locational factors affecting relocation decisions are factors such as the future destinations' state of political stability, linkages to the major traffic routes and the proximity to the central area.