A TOAST TO AN IMPROBABLE NATION: THE FIRST WAVE OF INVESTORS

If we build it, they will come...

Prime Minister Lee Kuan Yew (top) touring Jurong industrial estate, set up in the 1960s to draw multinationals to the island-state. Former EDB chairman Chan Chin Bock (above), now 82, recalls that in his first year at the board, he went up Jurong Hil
Prime Minister Lee Kuan Yew (above) touring Jurong industrial estate, set up in the 1960s to draw multinationals to the island-state. Former EDB chairman Chan Chin Bock, now 82, recalls that in his first year at the board, he went up Jurong Hill almost every day, either to help arrange for factory openings or with investors to view potential sites.ST PHOTOS: CHEW BOON CHIN, ONG WEE JIN
Prime Minister Lee Kuan Yew (top) touring Jurong industrial estate, set up in the 1960s to draw multinationals to the island-state. Former EDB chairman Chan Chin Bock (above), now 82, recalls that in his first year at the board, he went up Jurong Hil
Prime Minister Lee Kuan Yew touring Jurong industrial estate, set up in the 1960s to draw multinationals to the island-state. Former EDB chairman Chan Chin Bock (above), now 82, recalls that in his first year at the board, he went up Jurong Hill almost every day, either to help arrange for factory openings or with investors to view potential sites.ST PHOTOS: CHEW BOON CHIN, ONG WEE JIN
Prime Minister Lee Kuan Yew (top) touring Jurong industrial estate, set up in the 1960s to draw multinationals to the island-state. Former EDB chairman Chan Chin Bock (above), now 82, recalls that in his first year at the board, he went up Jurong Hil
Jurong industrial estate was the brainchild of Dr Goh Keng Swee (far left).ST PHOTO: HAN HAI FONG

... such was the determination - and drive - to attract MNCs to set up production in Singapore

In 1964, Mr Chan Chin Bock, now 82, was tapped by the Economic Development Board (EDB) to help Singapore in its push to industrialise through import substitution, taking the lead from Malaysia's focus on the auto industry.

The strategy - to develop local products to replace imports - was known as Plan A. But with Separation on Aug 9, 1965, Mr Chan found himself thrust into Plan B - that of wooing foreign investors here to produce goods for export.

He was sent to the United States and tasked to start contacting the more than 300,000 multinational companies scattered across 50 states. It was his first trip to the US and he had no idea where to start.

Six months after he landed in New York City in 1968, he contacted General Electric (GE) after drawing up a shortlist of the 50 largest firms headquartered in the city and screening them to see which was a Fortune 500 company with an export ratio of at least 30 per cent of total sales, and a well-known brand to boot. He figured that if he could attract a well-respected "big name" MNC to Singapore, it would serve as a showcase to get other investors interested.

Mr Chan visited GE's consumer electronic division in Bridgeport, Connecticut. After several meetings, he convinced division head William Bourne to visit Singapore to check if it was a suitable site for a clock radio factory. At that time, Mr Bourne was worried that the Red Guards of China's Cultural Revolution would descend upon Hong Kong where GE had a factory and disrupt operations.

  • GROWTH PHASES

  • 1965 TO LATE 1970s
    • Low-cost location for global manufacturing.
    • Focus on creating jobs for
    fast-growing, young workforce.
    • First wave of MNCs starts operations here.


    LATE 1970s TO EARLY 1980s
    • Higher value-added production through automation and computerisation.
    • Skills training centres set up to train workers for skills-intensive jobs, enabling them to earn higher wages.


    MID-1980s TO 1990s
    • At full employment, so job creation no longer key focus.
    • Shift to knowledge-based activities; chemicals, biotechnology, pharmaceuticals and infocomms become important drivers.
    • Programme to stimulate growth of local SMEs.
    • Launch of regionalisation drive to grow “second wing”.


    2000s
    • Major push to diversify economy, promote services sector, including education, healthcare, finance and law.
    • Research and development identified as important driver for long-term growth.


    2010 TO PRESENT
    • Major restructuring to raise skills and productivity to advanced-country levels.Help for local SMEs to internationalise.
    • Location for MNCs’ strategic activities, so they plan, coordinate and finance Asianand global operations out of Singapore.

"Singapore was his insurance protection in case Hong Kong didn't work out," recalls Mr Chan.

Mr Bourne chose a site in Toa Payoh "for its ready availability of workers", says Mr Chan. By the end of 1969, the factory was in operation, employing close to 1,000 workers.

By 1970, GE had 10 investments in Singapore making products such as TV components and carrying out the repair and overhaul of aircraft engines. It employed a total of 13,000 workers at that time.

Mr Chan's strategy of wooing GE paid off; dozens of companies, including Sundstrand and Motorola, were influenced to invest in Singapore "because GE is there", he recalls. Then came non-American MNCs like Rollei of Germany and Japan's Seiko; followed by the US' National Semiconductor, Fairchild Semiconductor, Hewlett-Packard and Texas Instruments.

Once again, Mr Chan's timing was fortuitous as the semiconductor firms were looking to move labour-intensive production to low-cost countries in Latin America and Asia.

"The single most attractive feature was that we are an English-speaking country," Mr Chan says.

Foreign investors also liked that Singapore was a small country with only one level of government. The Government's support, in terms of "Pioneer Certificates" that provided tax holidays, and well-planned industrial estates were other draws. The first of such estates was in Jurong, a vast area which cost millions to develop.

The man who dreamed it up was Dr Goh Keng Swee who, in the early days, worried that if investors did not come, Jurong would go down in history as "Goh's folly".

But come they did and, by 1968, there were some 300 factories employing 21,000 workers. The unemployment rate fell from 14 per cent in 1966 to around 4.5 per cent in 1975. Small and medium-sized enterprises benefited from selling goods and services to the MNCs.

Mr Chan recalls that in his first year at EDB, he went up Jurong Hill almost every day, either to help arrange for factory openings or with investors to view potential sites.

The fallback Plan B was to produce goods for export to a global market. "In a way, this was the precursor to globalisation. By the time globalisation became a catch-phrase in the 1980s, Singapore had already been on our Plan B for 20 years!" Mr Chan says.

Today, manufacturing remains a key engine of growth and Singapore's exports have evolved from labour-intensive to high-value-added products such as electronics, chemicals and biomedicals. More than 7,000 MNCs also have regional or global HQs here.

As for Mr Chan, he went on to open 19 EDB centres across the US, Europe and Asia. He helmed the statutory board's overseas network till his retirement in 1988 and stayed on as adviser till 1995.

Reflecting on how few people know export-driven growth was actually an alternative plan, he says: "We did not talk much about it in the early days because we were afraid it'd make our jobs harder after we revealed the secrets!"

A version of this article appeared in the print edition of The Sunday Times on August 09, 2015, with the headline 'frst ! The wave of investors frst ! The If we build it, they will come...'. Print Edition | Subscribe