BGR Takeaways for Session 4

Post on 05-Oct-2015




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Takeaways for BGR MBA Class of 2015

BGR - Session 4

Case:Singapore HBS, April 5, 1995Reading:Accounting for Productivity Growth HBS, September 14, 1994

1) Singapore has perhaps the best investment climate in the world. Its doing business indicators are excellent. The government is not only transparent and above board but also its meticulous and transparent economic planning as well as consequential extensive capital spending in anticipation of future needs provide clear signals to the business community regarding the kind of commercial activities it seeks to encourage -- and this enables business groups to fall in line with and take advantage of the direction provided by the Government.

2) However, it has to be recognized is that Singapores frequent changes in economic direction (before realizing optimal gains) means the incurrence of waste in capital expenditures, as also the inability of labour to benefit fully from climbing the learning curve. This together with large capital sums expended in advance to cater to future needs each time a new economic direction is adopted effectively lowers the return on capital utilized and demonstrably lowers the overall efficiency achieved in the deployment of labour and capital. Notwithstanding all this, the Singapore approach --- executed in the most competent manner - has clearly maximized welfare and fostered the best possible environment for business to thrive, particularly those aligned with the objectives of the countrys economic planners.

3) To set up a business venture in Singapore, there is no need for a local partner or close relationships with authorities. Expect to be dealt with on merit and be closely regulated. Essential to understand and follow laws/rules/regulations.

4) Singapores location, superb infrastructure (real and financial), services, connectivity, integrity, availability of highly skilled (albeit expensive work force) make it ideal for high tech or sophisticated service businesses with a global or regional reach. This would also be in consonance with Singapores current economic thrust that seeks to emphasize all aspects of a knowledge economy and activities at the cutting edge of technology.

BGR MBA Class of 2015 (Semester IIIB Nov 5 Dec 27, 2014)