03 Global Firms in the Industrializing East

Transcription

1 Human Geography: People, Places, and Change: 03 Global Firms in the Industrializing East 1 of 14 Human Geography: People, Places, and Change 03 Global Firms in the Industrializing East 1 01:00:24:07 CAPTIONING MADE POSSIBLE BY THE ANNENBERG/CPB PROJECT 2 01:00:30:21 [CAR HORNS HONKING] 3 01:01:03:21 [WOMAN] EAST ASIA IS BOOMING. 4 01:01:06:06 THERE ARE SO MANY OPPORTUNITIES, I THINK, IN EAST ASIA, AND SINGAPORE, I THINK, WANTS TO BE A PART OF THE BOOMING EAST ASIA REGION AND TO PLAY ITS ROLE. 5 01:01:20:06 [MAN] I THINK SINGAPORE IN THE FUTURE IS GOING TO HOST MOST OF THE COMPANY HEADQUARTER OF THIS REGION BECAUSE THEY ARE VERY ATTRACTIVE WITH THEIR NETWORK OF BANK, FINANCE. 6 01:01:34:00 A LOT OF DECISIONS ARE MADE THERE ALREADY, AND I THINK THIS WILL KEEP ON GOING. 7 01:01:48:07 SINGAPORE IS AT THE HEART OF THE EAST ASIA REGION. 8 01:01:51:21 MULTINATIONAL COMPANIES WHICH CAME TO SINGAPORE FROM EUROPE AND THE U.S. IN THE 1960s NOW HAVE THEIR REGIONAL HEADQUARTERS ON THE ISLAND, ALONGSIDE MANY OF THE WORLD'S TOP BANKS AND OTHER FINANCIAL PLAYERS. 9 01:02:03:16 AS THE EAST ASIAN ECONOMY HAS GROWN, SINGAPORE'S ROLE IN THE REGION HAS SHIFTED FROM BEING AN OFFSHORE HAVEN TO THAT OF A REGIONAL CROSSROADS IN ONE OF THE WORLD'S FASTEST-GROWING ECONOMIES :02:16:05 SINGAPORE HAS CHANGED DRAMATICALLY SINCE THE 1960s, FROM A TIME WHEN IT ACTED AS A LOW- COST MANUFACTURING BASE FOR OVERSEAS MULTINATIONALS :02:27:17 [WOMAN] IT WAS UNDERDEVELOPED, AND IT HAD THE

2 Human Geography: People, Places, and Change: 03 Global Firms in the Industrializing East 2 of 14 TYPICAL PROBLEMS OF AN UNDERDEVELOPED COUNTRY :02:34:09 UNEMPLOYMENT WAS HIGH :02:36:24 THERE WAS NOT MUCH ECONOMIC ACTIVITY GOING ON :02:40:08 I THINK THE FIRST PROCESS WAS REALLY SINGAPORE'S ACHIEVEMENT OF INDEPENDENCE IN :02:47:27 THAT WAS MOST IMPORTANT BECAUSE WHAT THAT MEANT WAS THAT SINGAPORE HAD TO BECOME INDEPENDENT NOT ONLY POLITICALLY AS A SOVEREIGN STATE, BUT ALSO ECONOMICALLY :02:59:06 AND BECAUSE OF THE NEED TO SURVIVE ECONOMICALLY AND THE NEED TO PROVIDE EMPLOYMENT FOR THOUSANDS OF PEOPLE, IT MEANT THAT IT HAD TO ACTUALLY LOOK FOR SOURCES OF ECONOMIC ACTIVITY :03:13:02 THERE WEREN'T ENOUGH INDUSTRIAL ENTREPRENEURS IN SINGAPORE LOCALLY, SO THEREFORE, THE GOVERNMENT HAD TO SOURCE FOR ENTREPRENEURS, AND THAT MEANT BRINGING IN THE MNCs :03:23:03 IN THE LATE SIXTIES AND EARLY SEVENTIES, SUCH HOUSEHOLD NAMES AS TEXAS INSTRUMENTS, HEWLETT-PACKARD, SONY, MATSUSHITA -- THEY ALL CAME TO SINGAPORE, FOR VARIOUS REASONS, BUT ONE OF THE MAIN REASONS WAS THAT LABOR IN SINGAPORE WAS RELATIVELY CHEAP AND DISCIPLINED AND HARD-WORKING :03:42:04 THE GOVERNMENT WAS...WAS :03:43:19 WAS VERY EAGER TO HAVE FOREIGN INVESTORS COME, SO THEREFORE THERE WAS VERY LITTLE RED TAPE THAT INVESTORS HAD TO ACTUALLY GO THROUGH IN ORDER TO SET UP THEIR INDUSTRIAL PLANTS IN SINGAPORE :04:00:08 ONE SUCH INVESTOR WAS SGS-THOMSON, A FRENCH-ITALIAN ELECTRONICS MULTINATIONAL AND ONE OF THE WORLD'S LARGEST MANUFACTURERS OF

3 Human Geography: People, Places, and Change: 03 Global Firms in the Industrializing East 3 of 14 SEMICONDUCTORS :04:09:16 THE COMPANY SET UP A MANUFACTURING OPERATION IN SINGAPORE IN 1969 AS A PART OF ITS SEARCH FOR LOW-COST LOCATIONS WORLD-WIDE :04:19:26 '69, OF COURSE, IS THE OLD STORY, VERY SIMILAR TO AMERICAN :04:24:11 ASIA PACIFIC GO FOR CHEAP LABOR :04:26:27 AND SINCE, PARTICULARLY AT THAT TIME, THE OPERATION OF ASSEMBLY AND TEST REQUIRED A LOT OF LABOR BECAUSE IT WAS MAINLY MANUAL OPERATION, WE SHIFTED SOME OF THE MORE MANUAL OPERATION AND MORE DIRTY TYPE OF OPERATION -- DIRTY NOT IN ECOLOGICAL SENSE, BUT IN A NOT SO WELL-PLANNED AND NOT SO WELL- AUTOMATED OPERATION, TO ASIA PACIFIC AT THAT TIME :04:54:01 AND SINGAPORE WAS ONE OF THE CONVENIENT PLACES :04:59:08 INITIALLY, COMPANIES SUCH AS SGS-THOMSON UNDERTOOK WHAT IS KNOWN IN THE ELECTRONICS INDUSTRY AS BACK-END WORK :05:05:08 THAT IS ROUTINE, LABOR-INTENSIVE ASSEMBLY WORK TYPICAL OW-COST LOCATIONS SUCH AS SINGAPORE AT THAT TIME :05:13:09 [LEE] FIRST, IT WAS THIS PHASE OF LABOR-INTENSIVE MANUFACTURING, AND IT WAS THE TYPICAL KIND OF LABOR-INTENSIVE MANUFACTURING PRODUCTS -- UM...ELECTRONIC ASSEMBLY, TEXTILES, SOME FOOTWEAR, I THINK, IN SINGAPORE :05:26:20 AND THEN, BY THE LATE SEVENTIES, I THINK SINGAPORE REALIZED THAT WAGES WERE GOING UP :05:34:21 WE ALREADY HAD ACHIEVED FULL EMPLOYMENT, AND THEREFORE, MANUFACTURING HAD TO MOVE ON TO THE NEXT STAGE, WHICH WAS REALLY MORE VALUE-ADDED, MORE SOPHISTICATED TECHNOLOGY- TYPE INDUSTRY :05:47:06 SO FROM THE SIMPLE, I THINK, ASSEMBLY OF

4 Human Geography: People, Places, and Change: 03 Global Firms in the Industrializing East 4 of 14 ELECTRONIC PRODUCTS, ONE THEN MOVED ON TO WAFER FABRICATION, FOR EXAMPLE, OF ELECTRONIC COMPONENTS :05:58:12 [VON SOMOGY] THIS ORIGINAL ROLE HAS COMPLETELY CHANGED IN THE EARLY EIGHTIES, BECAUSE AT THAT TIME, IT WAS VERY CLEAR THAT WE CANNOT SURVIVE EVEN AS A COMPANY PRODUCING ONLY ON THE MANUAL TYPE OF MACHINERY :06:14:16 SO WE HAVE TO COMPLETELY RE-ENGINEER THE FULL -- FULL BACK-END OR ASSEMBLY AND TEST AND MAKE IT REALLY HIGH-QUALITY AUTOMATED FACILITY, WITH MOST MODERN EQUIPMENT :06:28:06 TO THAT END, A LIMITED AMOUNT OF RESEARCH AND DEVELOPMENT WORK IS DONE IN SINGAPORE, ALTHOUGH VIRTUALLY ALL OF THE COMPANY'S ADVANCED RESEARCH AND DEVELOPMENT IS UNDERTAKEN IN EUROPE :06:42:06 [MAN] IN OUR TYPE OF INDUSTRY, R&D IS VERY IMPORTANT :06:48:18 MOST OF OUR R&D IS DONE IN EUROPE, AND I SAY "MOST OF IT" -- ABOUT 90% OF OUR R&D IS DONE HERE :06:57:21 IN R&D, THERE ARE SEVERAL LEVELS :07:00:23 ONE IS REALLY WORKING ON THE SILICON ITSELF, ON THE PHYSIC, SO THAT'S A BASIC R&D :07:07:04 AND MOST OF THE PRODUCT DEVELOPMENT, ADVANCED PRODUCT DEVELOPMENT -- LIKE NOW, WE ARE WORKING ON 16-MEGABYTE FLASH MEMORIES -- THOSE KIND OF PRODUCT DEVELOPMENT ARE DONE IN EUROPE :07:28:20 SO WHILE THE BULK OF THE COMPANY'S R&D IS IN EUROPE, SINGAPORE IS NO LONGER SIMPLY A LOW- COST LOCATION FOR SGS-THOMSON :07:37:06 IT'S NOW THE SITE OF ITS LARGEST WAFER FABRICATION PLANT, THE FRONT-END WORK THAT MARKS THE BEGINNING OF LIFE FOR ELECTRONIC CHIPS.

5 Human Geography: People, Places, and Change: 03 Global Firms in the Industrializing East 5 of :07:48:09 THAT LEFT THE QUESTION AS TO WHERE TO LOCATE THE BACK-END ASSEMBLY PRODUCTION :07:53:09 THE COMPANY CHOSE THE TOWN OF MUAR, A PREVIOUSLY UNDEVELOPED AREA IN NEIGHBORING MALAYSIA :08:02:28 [MAN] THERE WAS TWO INTERESTING POINTS FOR SGS-THOMSON :08:07:17 ONE, TO GO IN MALAYSIA AND NOT IN THE PARTICULAR DEVELOPED CITY LIKE KUALA LUMPUR OR PENANG, AND TO CHOOSE ONE CITY CLOSEST TO SINGAPORE BECAUSE WE HAVE ALREADY ONE OPERATION IN SINGAPORE FOR EXCHANGE OF TECHNOLOGY, FOR TRANSFER OF THE PRODUCT, TRANSFER OF THE LINE, SO MAKE EASY THE CROSS- FERTILIZATION BETWEEN THE TWO PLANT :08:34:20 THIS IS THE BASIC THING :08:38:20 THE FIRST MY TRIP IN MUAR WAS IN 1981, AND I CAN SAY THAT IN 1981, WE TRIED TO FIND AN HOTEL THAT'S SUPPOSED TO BE THE BEST, AND THIS HOTEL WAS COMPLETELY WOODEN, AND TO GO TO THE ROOM, I NEED TO CROSS A LOT OF PEOPLE SLEEPING IN THE FLOOR :09:02:16 I CAN SAY THEN AROUND OUR FACTORY, REALLY THERE WAS A JUNGLE, AND EVERY MORNING YOU COME AND YOU CROSS THE BRIDGE, YOU CAN FOUND MONKEY IN THE -- IN THE BRIDGE :09:15:05 NOW, NO MORE, BUT AT THIS TIME, THERE WAS MONKEY AROUND THE FACTORY :09:41:15 [RE] I CAN SAY THAT 95% OF OUR FORCE IS FROM MUAR, AND 5% WE HAVE OUTSIDE OF MUAR, BUT ALWAYS MALAYSIAN :10:01:20 OUR WORKERS ARE BASICALLY YOUNG WORKERS, FIRST OF ALL, RANGING FROM...17, 18 YEAR UNTIL 24, THIS IS THE AVERAGE OF OUR MEN :10:16:06 AND BASICALLY, OUR WOMEN COMING FROM AFTER IMMEDIATELY SCHOOL, OR COMING FROM PLANTATION.

6 Human Geography: People, Places, and Change: 03 Global Firms in the Industrializing East 6 of :10:27:16 ATTRACTED BY WAGES HIGHER THAN THOSE ELSEWHERE IN THE AREA BUT STILL WELL BELOW SINGAPORE'S, WOMEN WORK WITH STATE-OF-THE- ART TECHNOLOGY TO MEET THE DEMANDS OF THE EXPANDING EAST ASIA MARKET FOR SEMICONDUCTORS :10:41:29 [RE] THE MOST BIG INCREASE IN TERM OF MARKETS IS TELECOMMUNICATIONS AND AUTOMOTIVE :10:50:28 TELECOMMUNICATION IS REALLY, I THINK, IS A NEED OF THE LIFE :10:56:00 NOW EVERY COMPANY NEED TO DEVELOP, AND FAST, THE TELECOMMUNICATION :11:00:23 SO WE ARE WORKING LOT OF NEW CHIPS AND NEW INTEGRATED CIRCUIT TO IMPROVE THE TELECOMMUNICATION :11:08:12 AND THE AUTOMOTIVE, BECAUSE NOW THE CAR GETTING AND GETTING MORE ELECTRONIC PART :11:15:15 IT BECOME LIKE AN AIRPLANE :11:17:21 IN A FEW YEARS, THE CAR BECOME LIKE AN AIRPLANE :11:21:00 EVERYTHING IS ELECTRONIC :11:30:18 SO OVERSEAS MULTINATIONALS, WHO INITIALLY LOCATED IN SINGAPORE TO TAKE ADVANTAGE OF THE LOW COSTS, ARE NOW MOVING THEIR ROUTINE ASSEMBLY WORK ELSEWHERE, TO LOCATIONS WHERE LABOR IS STILL CHEAP :11:43:20 A 40-MINUTE FERRY RIDE FROM SINGAPORE TAKES YOU TO THE ISLAND OF BATAM IN INDONESIA, WHERE THE COST ADVANTAGES ARE EVEN MORE APPARENT THAN IN MALAYSIA :11:54:18 A SINGAPORE COMPANY, STIC, HAS SET UP AND NOW MANAGES BATAM INDUSTRIAL PARK IN THE CENTER OF THE ISLAND :12:02:05 [MAN] WE STARTED A PROJECT IN 1990, AND WITHIN JUST ONE YEAR, THE FIRST FACTORIES IN THE PARK BECOME OPERATIONAL AND HAVE GONE INTO

7 Human Geography: People, Places, and Change: 03 Global Firms in the Industrializing East 7 of 14 PRODUCTION :12:12:06 AND TO DATE, WE HAVE ALREADY 44 COMPANIES IN OPERATIONS WITH ABOUT 20,000 WORKERS :12:19:25 BY YEAR-END 1995, WE EXPECT THERE WILL BE 100 FACTORIES IN OPERATION SUPPORTED BY 50,000 WORKERS, AND THE TOTAL EXPORT VALUE IS ESTIMATED TO BE ABOUT U.S. $1 BILLION :12:34:18 BUT THE WHOLE IDEA IS FOR BATAM TO CAPITALIZE ON THE RESOURCES AVAILABLE BOTH FROM INDONESIA AND SINGAPORE :12:45:03 BATAM ISLAND HAS ABUNDANT LAND AND LABOR RESOURCES, WHILE SINGAPORE CAN SUPPLEMENT IT BY OUR VERY MODERN COMMUNICATION INFRASTRUCTURES AND OUR MANAGEMENT EXPERTISE :12:56:17 TOGETHER, THESE BECOME VERY ATTRACTIVE FOR MULTINATIONALS :13:00:04 IN FACT, THE PROXIMITY OF BATAM TO SINGAPORE IS ONE OF THE KEY FACTORS IN ATTRACTING INVESTORS TO BATAM :13:10:05 [LEE] I THINK THAT IN ELECTRONICS IN PARTICULAR, BECAUSE OF THE SHORT PRODUCT LIFE CYCLES, THE NEED, ACTUALLY, TO GET YOUR PRODUCTS ON THE MARKET VERY QUICKLY, SOMEHOW LABOR IS STILL VERY IMPORTANT AS A FACTOR OF PRODUCTION :13:25:24 THERE IS NOTHING AS FLEXIBLE AS LABOR :13:28:24 YOU CAN'T CHANGE PRODUCTION LINES AS FAST IF THEY WERE FULLY AUTOMATED AS YOU CAN IF YOU HAVE LABOR :13:37:06 SO FLEXIBILITY IS STILL A DISTINCT ADVANTAGE THAT LABOR HAS AS A FACTOR OF PRODUCTION, WHICH MEANS THAT YOU ACTUALLY NEED THE PEOPLE :13:45:29 AND THEN COST AND WAGES BECOMES AN IMPORTANT FACTOR :13:50:15 SO IF IT IS CHEAPER TO PRODUCE ON BATAM AND IF THE LABOR IS AVAILABLE, THEN BATAM BECOMES A

8 Human Geography: People, Places, and Change: 03 Global Firms in the Industrializing East 8 of 14 DISTINCT LOCATIONAL ADVANTAGE TO SET UP YOUR PRODUCTION :14:04:05 [MAN] OUR MAJORITY WORK FORCE ARE FROM INDONESIA, LIKE THE PROVINCE LIKE JAKARTA :14:12:11 JAVA... AND ALSO BATAM :14:15:27 THEY ARE UNDER THE CONTRACT, SO THEY ARE MAJORITY UNDER TWO YEARS CONTRACT :14:21:11 AFTER THE TWO YEARS CONTRACT, WE ARE PROVIDING A TICKET BACK TO THE HOMETOWN :14:26:28 IF THEY WISH TO CONTINUE AND WE FEEL THAT THEY PERFORM GOOD, THEN WE'LL ALLOW THEM TO CONTINUE, AND WE BUY A RETURN TICKET :14:35:21 THE WAGES IN BATAM, IT'S A FAIRLY LOW ONE COMPARED TO SINGAPORE :14:41:26 CURRENTLY, WE'RE LOOKING AT A RATIO OF MAYBE 1-TO-6 OR 1-TO-8 TIMES :14:49:06 WE PACKAGE FOR MULTINATIONALS ENTIRE LABOR PACKAGE, INCLUDING PROVIDING THEM THE ACCOMMODATIONS, TO AND FRO AIR TICKETS, ALL THE MEDICAL CHECKUPS, THE TRAININGS, AND SO ON, AND EVEN WITH THIS WHOLE PACKAGE, IT IS ABOUT 25% OF THE ENTIRE LABOR COST OF SINGAPORE :15:11:14 SO IN THAT SENSE, THAT LOW-COST PRODUCTION FACTORS BECOME VERY ATTRACTIVE FACTORS TO OUR MULTINATIONALS :15:21:21 SO OVERSEAS MULTINATIONALS IN SINGAPORE HAVE RELOCATED PARTS OF THEIR MANUFACTURING OPERATIONS CLOSE BY :15:27:03 BUT IT'S NOT ONLY THE MANUFACTURING ROLE OF SINGAPORE THAT'S CHANGED :15:31:09 SO, TOO, HAS ITS FINANCIAL ROLE, FROM THAT OF AN OFFSHORE BANKING SITE TO A CENTER OF GLOBAL FINANCE IN THE EAST ASIA REGION :15:40:19 [LEE] THAT ACTUALLY CAME ABOUT BECAUSE IN THE

9 Human Geography: People, Places, and Change: 03 Global Firms in the Industrializing East 9 of 14 LATE 1960s, AGAIN, THERE WERE LOTS OF AMERICAN DOLLARS FLOATING AROUND IN THE REGION, PARTLY BECAUSE OF COMMERCE AND BUSINESS, BUT PARTLY, I THINK, ALSO BECAUSE OF THE VIETNAM WAR :15:57:00 WHY SINGAPORE? 93 01:15:58:04 SINGAPORE BECAUSE THE GOVERNMENT AT THAT TIME, UNDER, I THINK, THE ENCOURAGEMENT OF OR THE SUGGESTION BY SOME PRIVATE-SECTOR FINANCIAL INSTITUTIONS, ACTUALLY SET UP SPECIFICALLY AN OFFSHORE CENTER, SO THAT ACTUALLY, THE WITHHOLDING TAX, I THINK, ON DEPOSITS IN THE OFFSHORE CENTER WOULD BE TAX-FREE :16:16:29 SO WITH THE ABOLITION OF SUCH TAXES, IT MEANT THAT IT WOULD ACTUALLY DRAW OFFSHORE FUNDS TO SINGAPORE, AND THAT'S HOW IT ALL STARTED :16:26:16 [MAN] THE HONG KONG BANK HAS BEEN HERE IN THIS PART OF THE WORLD FOR A LONG TIME, THIS PART OF THE WORLD MEANING THE FAR EAST AS IN THOSE DAYS -- THE COLONIAL PERIOD -- IT WAS PRETTY WELL KNOWN :16:40:00 CERTAINLY, FROM THE BEGINNING OF DEVELOPMENT OF THE SPICE TRADE, SINGAPORE HAS ALWAYS BEEN SEEN AS AN IMPORTANT :16:50:02 CONNECTING POINT :16:52:02 BOTH EAST AND WEST ROUTES, BOTH IN TRADE AND COMMUNICATIONS, CROSS HERE IN SINGAPORE :16:59:02 THE HONG KONG BANK, HAVING ITS TRADITIONAL ROOTS FROM BRITISH HERITAGE, SAW THE ADVANTAGES HERE IN SINGAPORE AND IN HONG KONG AND CHOSE THE TWO SITES TO BASICALLY BUILD THEIR NETWORK OF BANK BRANCHES AND FINANCIAL INSTITUTIONS IN THIS PART OF THE WORLD, AND I THINK IT HAS REALLY PROVEN TO BE A WISE DECISION, CERTAINLY FARSIGHTED ON THE PARTS OF THE FOUNDERS :17:30:05 [MAN] I THINK IN 1986, WHEN THE FIRST CALCULATION WAS TAKEN ON TURNOVER, THE FOREIGN EXCHANGE

10 Human Geography: People, Places, and Change: 03 Global Firms in the Industrializing East10 of 14 TURNOVER OF SINGAPORE, WHICH WAS, AT THAT TIME, IF MEMORY SERVES ME CORRECTLY, WAS ABOUT 6 BILLION PER DAY ON SPOT, TILL 1993, WHERE WE HIT ABOUT 100 BILLION U.S. DOLLARS A DAY :17:54:06 WHAT THAT MEANT WAS, UP FROM NOWHERE IN 1986, WE ENDED UP AS THE FOURTH LARGEST FOREIGN EXCHANGE CENTER IN THE WORLD, AFTER LONDON, NEW YORK, TOKYO BEING THE FIRST THREE :18:16:22 SINGAPORE HAS NOW ADDED A FINANCIAL FUTURES EXCHANGE TO ENHANCE ITS REPUTATION AS AN EMERGING GLOBAL FINANCIAL CENTER :18:24:17 [LEE BOON HUAT] SIMEX IS SHORT FOR SINGAPORE INTERNATIONAL MONETARY EXCHANGE :18:30:02 IT IS EQUIVALENT TO YOUR LONDON INTERNATIONAL FINANCIAL FUTURES EXCHANGE :18:35:05 IT STARTED IN THE MID-EIGHTIES, AGAIN ONE OF THE PROACTIVE DECISIONS TAKEN BY THE GOVERNMENT THAT FUTURES EXCHANGES WILL BECOME A VERY IMPORTANT PART OF SINGAPORE BEING A FINANCIAL CENTER :18:52:01 THIS ECONOMIC PROGRESS HAS ALSO DRAWN A LOT OF ATTENTION FROM THE MULTINATIONALS, FROM OTHER INVESTORS THAT SEE AN OPPORTUNITY IN TAKING PART IN THIS ECONOMIC BOOM, AND IN DOING SO, THEY BRING WITH THEM MONEY, FUNDS, CAPITAL TO INVEST IN THIS REGION, AND THIS INVARIABLY COMES IN SINGAPORE :19:21:22 WHAT'S IMPORTANT IS THAT...MNCs TODAY -- OR FOR THAT MATTER, ANYTIME -- THEY ARE LOOKING FOR SOMEONE WHO CAN PROVIDE THEM THE EXPERTISE, THE KNOWLEDGE, THE GROUND FEEL OF A CERIN COUNTRY :19:38:12 BECAUSE IF YOU'RE GOING TO MAKE AN INVESTMENT, YOU'RE GOING TO SITE AN OFFICE OR WHATEVER, YOU NEED TO KNOW WHAT THE WORKING ENVIRONMENT IS LIKE IN THAT COUNTRY OR REGION :19:51:00 CERTAINLY, IT'S IMPORTANT WHEN YOU'RE COMING

11 Human Geography: People, Places, and Change: 03 Global Firms in the Industrializing East11 of :20:06:12 LINE FOUR. IN NEW TO GET SOMEONE WHO CAN GIVE YOU THAT FORM OF CONSULTANCY, NOT JUST YOUR BANKING NEEDS, BUT IN TERMS OF FINANCIAL ADVICE AS WELL :20:14:05 SO SINGAPORE'S ROLE IN EAST ASIA AS A BANKING CENTER AND OFFSHORE HAVEN TO MULTINATIONALS HAS CHANGED CONSIDERABLY SINCE THE 1960s :20:23:01 AS WELL AS BEING A SITE OF MULTINATIONAL INVESTMENT, SINGAPOREAN COMPANIES ARE NOW THEMSELVES LOOKING TO INVEST IN SITES ABROAD :20:31:03 [TAY] TODAY, WE ARE SEEING AN OUTWARD MOVEMENT FROM SINGAPORE :20:36:02 PREVIOUSLY, YOU ARE SEEING MOVEMENT INTO SINGAPORE WITH THE RECOGNITION OF ITS IMPORTANCE :20:41:17 NOW WE RECOGNIZE OUR IMPORTANCE :20:43:18 I THINK IT'S WELL-ESTABLISHED :20:46:03 BUT WHAT'S IMPORTANT FOR US NOW IS THAT WE NEED TO CREATE ANOTHER WING OF OUR ECONOMY THAT'S TO GO OVERSEAS :20:55:17 SO WHAT THE GOVERNMENT IS ENCOURAGING IS THAT 1 -- SINGAPOREANS WHO ARE ALREADY OVERSEAS NEED NOT FEEL THAT THEY ARE OUT OF THE COUNTRY, ALTHOUGH PHYSICALLY, THEY ARE OUT OF THE COUNTRY :21:09:10 BUT THEIR ATTACHMENT TO THE COUNTRY IS A VERY IMPORTANT LINK FOR US :21:14:25 THEY MIGHT HAVE BROUGHT A BUSINESS OVERSEAS, BUT THEY STILL REPRESENT WHAT WE ARE HERE IN SINGAPORE :21:21:27 I THINK THEY ARE AMBASSADORS OF WHAT WE ARE HERE IN SINGAPORE, AND THEY CAN ALSO HELP US FACILITATE BUSINESS OVERSEAS COMING INTO SINGAPORE AND THEN USING SINGAPORE AS A PLATFORM INTO THE REGION.

12 Human Geography: People, Places, and Change: 03 Global Firms in the Industrializing East12 of :21:39:29 AS ONE OF THE WORLD'S FASTEST-GROWING ECONOMIES, COMPETITION IN THE EAST ASIA REGION IS BECOMING INCREASINGLY FIERCE :21:46:29 [LEE] IF EUROPEAN AND NORTH AMERICAN COMPANIES DO NOT TAKE ADVANTAGE OF THE OPPORTUNITY THERE IS HERE IN EAST ASIA AND MISS THE BOAT, AS IT WERE, THEY COULD LOSE OUT IN THE GLOBAL COMPETITION AMONG COMPANIES, WHICH MEANS THAT ACTUALLY IT WOULD BE THE WORSE FOR THEM AND FOR THEIR EMPLOYEES AS A WHOLE :22:10:02 THAT IS A SCENARIO WHICH I DO NOT WELCOME, BUT IT COULD WELL BE BECAUSE IN EAST ASIA, NOT ONLY ARE THE JAPANESE MNCs ALREADY EVERYWHERE, BUT, I THINK, THE -- THE INDONESIAN, THE THAI COMPANIES, ALREADY BEGINNING TO GO OUT OF THEIR OWN COUNTRIES IN A VERY AGGRESSIVE SORT OF WAY :22:30:13 AND I THINK THAT THE AMERICANS AND THE EUROPEANS ALSO NEED TO BE EQUALLY AGGRESSIVE, I THINK, IN TERMS OF HAVING A GLOBAL STRATEGY FOR THEIR COMPANIES :22:41:07 SGS-THOMSON CLEARLY RECOGNIZES THE NEED TO HAVE A STRONG PRESENCE IN THE EAST ASIA REGION AS A PART OF ITS GLOBAL STRATEGY :22:50:20 [DUTHEIL] SGS-THOMSON IS GLOBAL :22:52:25 WHAT WE MEAN BY GLOBAL IS BEING PRESENT IN EVERY PART OF THE WORLD, EVERY PART OF THE WORLD WHERE -- EVERY INDUSTRIALIZED REGION OF THE WORLD :23:09:05 TO PUT TOGETHER KOREA, HONG KONG, TAIWAN, SINGAPORE, PLUS THE REST OF THOSE COUNTRIES IN SOUTHEAST ASIA, THIS MARKET IS BIGGER NOW THAN THE EUROPEAN MARKET :23:23:05 SO IT'S PRETTY OBVIOUS THAT COMPANIES LIKE OURS NEED TO BE THERE :23:29:05 SO IT'S NO MORE A QUESTION OF LOW-COST LABOR -- IT'S OF STRATEGIC IMPORTANCE.

13 Human Geography: People, Places, and Change: 03 Global Firms in the Industrializing East13 of :23:41:25 OVER 95% OF THE POPULATION OF SINGAPORE ARE, IN FACT, OF CHINESE DESCENT, AND MANDARIN IS THE SECOND LANGUAGE :23:49:24 FOR SOME TIME NOW, EYES HAVE BEEN TURNING TO CHINA AS A POTENTIAL LOW-COST LOCATION FOR MULTINATIONALS AND AS AN EXPANDING MARKET :23:58:07 CHINA HAS ALREADY ATTRACTED MASSIVE OVERSEAS INVESTMENT FROM WITHIN THE REGION, INCLUDING SINGAPORE, SO THERE ARE OBVIOUS LINKS, THEN, BETWEEN SINGAPORE AND CHINA :24:09:15 [TAY] NOW WE ARE SEEING THE INCREDIBLE SIZE OF THE WHOLE CHINESE MARKET BEING OPENED, AND HERE WE ARE, A POPULATION OF OVER A BILLION PEOPLE, SPEAKING THE LANGUAGE MANDARIN, AND HERE WE ARE, A TINY LITTLE COUNTRY IN SINGAPORE, WHERE WE HAVE PEOPLE WHO CAN COMMUNICATE IN BOTH ENGLISH AND MANDARIN :24:30:13 THE IDEA OF KWONG SEE -- IT'S BASICALLY THIS IDEA OF A TRADITIONAL RELATIONSHIP UPON SOMETHING THAT IS NOT REALLY TANGIBLE, BUT PERHAPS IF I COULD DESCRIBE IT IN THE WAY OF THE ANGLO- SAXON TYPE NEXUS BETWEEN THE AMERICANS AND THE BRITISH :24:51:20 AT ONE HIGH POINT OF A RELATIONSHIP WHEN YOU LOOKED AT THE RAPPORT BETWEEN REAGAN AND MARGARET THATCHER :24:59:08 THAT SAME WAY, I THINK, THAT KIND OF A NEXUS DOES EXIST FOR SINGAPOREANS HERE AS WELL AS THE CHINESE IN CHINA :25:13:20 WESTERN MULTINATIONALS BASED IN SINGAPORE ARE ALSO LOOKING TO CHINA, NOT ONLY AS A LOCATION FOR LOW-COST PRODUCTION, BUT ALSO AS A MARKETPLACE, WHICH THEY, ALONGSIDE ASIAN MULTINATIONALS, HAVE TO BE INSIDE :25:29:15 [VON SOMOGY] PROBABLY IN THE PERIOD OF ABOUT 12, 15 YEARS, CHINA ALONE MAY BE BIGGER MARKET THAN TOTAL EUROPE :25:40:03 THE DEMAND IS HUGE WHEN YOU'RE LOOKING AT SOMETHING LIKE 400 MILLION FAMILIES IN CHINA.

14 Human Geography: People, Places, and Change: 03 Global Firms in the Industrializing East14 of :25:48:18 YOU ARE LOOKING FOR 400 MILLION TELEVISION SETS, 400 MILLION TELEPHONES, ET CETERA :25:55:05 SO THIS TYPE OF DEMAND STILL HAS TO BE MET, AND AS THE GROWTH OF INCOME IN CHINA IS VERY FAST, WE EXPECT THAT WITHIN THIS 7-, 10-YEAR PERIOD, YOU WILL MEET THIS DEMAND :26:13:17 CHINA IS GOING TO BE VERY, VERY IMPORTANT :26:20:13 CAPTIONING MADE POSSIBLE BY THE ANNENBERG/CPB PROJECT CAPTIONING PERFORMED BY THE NATIONAL CAPTIONING INSTITUTE, INC :27:11:04 Annenberg Media :27:14: :27:19:24 For information about this and other Annenberg Media programs call LEARNER and visit us at