SINGAPORE: “In my generation, matters had been simpler … if you labored difficult more than enough, you obtained admission to university, additional or less you’d be ready to find a fantastic occupation with a fantastic salary, and then a occupation route in entrance of you.”
These words and phrases could very easily go off as those people of an more mature Singaporean reminiscing about the previous and lamenting the stiff opposition that young Singaporeans getting into the workforce right now confront.
“But now with the globalisation of the economic climate, with a whole lot of opposition and other matters – that will become a bit complicated,” Hong Kong Main Executive Carrie Lam ongoing, in a new interview with Channel NewsAsia.
Lam was in Singapore at the invitation of Key Minister Lee Hsien Loong, and the sentiments she expressed around the worries resonated with many Singaporeans.
It is obvious from Lam’s assertion that Hong Kong and Singapore confront comparable economic worries. However, their responses to these worries differ.
Pace BUMPS IN HONG KONG’S Growth
Both Singapore and Hong Kong have followed a comparable advancement trajectory, with both emerging to come to be Asia’s primary money powerhouses, using on the swift enlargement of money solutions in Asia around the previous 3 a long time.
When Hong Kong’s money sector has a considerably extended heritage than that of Singapore and remains larger sized in terms of sector capitalisation and depth, it is starting to encounter speed bumps in its advancement.
As I mentioned in an previously commentary, considerably of Hong Kong’s existing worries are a outcome of deficiencies in its public administration.
As soon as the leader of the pack as the primary Asian tiger economic climate, it has considering the fact that fallen driving its rivals. Its drop in prominence as a world money centre is significantly placing, considering the fact that money solutions have usually been Hong Kong’s forte.
Hong Kong’s economic decrease is rooted in its slipping productiveness and innovation. The town fell from eleventh situation to 14th in the 2016 Worldwide Innovation Index, whilst advancement in labour productiveness has fallen to .eight for each cent around the previous 4 decades, when compared to an average of three.6 for each cent before the 2009 world money disaster.
It is placing how comparable Hong Kong and Singapore are in so many strategies, in terms of the typical worries that both appear to be to be collectively facing. Specified these similarities, are there classes that Singapore can draw from Hong Kong’s ongoing decrease?
Hong Kong and Singapore resemble each and every other in many other strategies, if only simply because of their remarkably comparable heritage. Both are performing town-states that have emerged from a heritage of British colonialism and have retained their British-styled typical regulation and public administration devices.
Though Hong Kong now exists under China’s One Place Two Techniques basic principle, it nevertheless possesses substantial autonomy in economic policy.
In terms of economic development, both towns commenced out as production bases and shipping hubs but subsequently formulated strengths in money solutions, tourism and solutions.
However, this is wherever the similarity finishes.
For Singapore, some of our largest rivals arrive from all across the world, with Seoul and Dubai rivalling our air hub status, and Eire significantly providing us a run for our cash as an option small business spot. In a very globalised economic climate, this is, as they say, par for the training course.
However, if we seem at the bring about of Hong Kong’s economic worries, we could be shocked to find that the strong opposition that Hong Kong faces emanate from places considerably closer to its shores. Rising Chinese money centres this sort of as Shanghai and Shenzhen in particular are threatening Hong Kong’s traditional purpose as “gateway” to China.
A circumstance in position is that of container throughput. When Singapore proceeds to be ranked 2nd, Hong Kong has fallen from fourth to fifth area on the Entire world Delivery Council’s list of leading fifty world container ports. It was changed by Ningbo-Zhoushan, a growing transshipment hub with fantastic port infrastructure and strong connectivity to Zhejiang, an emerging economic centre.
When China has long served as Hong Kong’s economic hinterland, it is now ironically throwing up strong new port towns and money centres that threaten to eclipse the territory.
LESSON IN DIVERSIFICATION
Hong Kong’s economic decrease and the worries it faces maintain important classes for Singapore.
Hong Kong’s struggles with emerging opposition highlight an ineluctable simple fact: As the Chinese economic climate proceeds to build and experienced, it will be significantly complicated to contend with Chinese ports and money centres that are additional competitive, additional economical, and additional built-in with the relaxation of China’s economic climate.
This is significantly the circumstance with nearby Shenzhen, which has emerged to come to be a flourishing finance and innovation hub. In 2014, the Chinese Academy of Social Sciences ranked Shenzhen earlier mentioned Hong Kong in its ranking of the most competitive towns in China.
It is stated that imitation is the highest form of flattery. Nonetheless, imitation can ring the demise knell for a productive world town, as copycats with simple entry to facts and expertise can replicate a world city’s tactic for success in a shorter time and possibly with less effort and hard work.
That’s why, as soon as a town like Hong Kong or Singapore attains economic success in a particular industry, it should rapidly go on to another sector to preserve ahead of the curve. Unfortunately, this sort of constant motion is the destiny of smaller town-states.
Using a leaf from the worries and opposition that Hong Kong faces, Singapore wants to enact a paradigm shift and not rely exclusively on its pole situation as the gateway to Southeast Asia. Relatively than just remaining a gateway to any particular location or emerging sector, Singapore wants to repeatedly rebrand alone as a really world town that can serve a assorted array of marketplaces and solutions.
With 2nd-tier towns expanding in both sector sizing and expertise, traditional strengths in trade and finance will not be more than enough to warranty Hong Kong’s and Singapore’s survival in the world economic climate.
Remaining A Wise Town CAN Offer you A QUANTUM LEAP
One way both towns have sought to diversify their choices is to motivate the advancement of innovation and technological know-how, with FinTech remaining a circumstance in position, so as to bolster their money solutions sector, and hedge against potential disruption in this discipline. In doing so, they are transforming on their own into intelligent towns.
Nonetheless, in distinction to Singapore’s Wise Country initiative, Hong Kong’s intelligent town policy initiatives are considerably less coherent and Hong Kong proceeds to lag driving Singapore. When Singapore experienced introduced its Wise Country initiative again in 2014, Hong Kong is only just releasing its Wise Town blueprint, obtaining put in the previous number of decades commissioning reports and mapping out development strategies.
However, intelligent towns cannot be the silver bullet for sustainable economic advancement. Successful world towns this sort of as London and New York are additional than just places to do small business. Relatively, they are also very vibrant and habitable towns that are desirable to innovators, movers and shakers of the upcoming world economic climate.
This will in turn lead to a purely natural clustering of companies trying to find entry to very competent labour as properly as links to other companies, providing rise to new and impressive small business options. Much more than just a thoroughly clean and aesthetically pleasing setting, nonetheless, a productive world town wants to have a strong cultural identity.
HE(Art) OF GOVERNANCE
As Singapore’s flourishing arts scene displays, a city’s cultural activities can both deliver economic earnings, in terms of tourism, and perhaps additional importantly, fortify its cultural identity. It is this cultural identity that imbues fantastic towns with long-expression economic vibrancy and grants them assurance on the world stage.
At a additional basic stage, a vibrant arts and lifestyle scene also serves to attract both leading expertise and industry leaders who are ready to shape emerging cultural and economic trends. Much more than just supplying recreation and aesthetic value, the arts can really develop up Singapore’s cultural milieu and attractiveness as a world town.
The worries confronted by Hong Kong recommend that in an significantly competitive world economic climate that is dominated by significant and superior-resourced country-states, the survival of any town-state cannot be taken for granted.
Likely forward, this softer factor of urban economic development will confirm critical to both Hong Kong and Singapore. There is an urgent will need for urban differentiation and for a new economic tactic.
This will demand going up the value chain to provide solutions that these emerging towns are not however ready to through a form of a intelligent town transformation. That’s why, Singapore wants to go further than the hamster wheel of economic upscaling to really rethink what its value proposition is, in particular in light-weight of other competing towns that can very easily replicate our recipe for success.
Fostering a vibrant and unique cultural milieu will set Singapore aside from other economic powerhouses and enrich its attractiveness as a world town. A vibrant arts and lifestyle scene will be vital for this.
In purchase to do this, the town-state should learn both the art and the coronary heart of governance. When Singapore’s bodily infrastructure is critical for its economic performance, it is the town-state’s cultural identity that will give it soul and long-expression vibrancy.
Woo Jun Jie is an assistant professor in the Community Policy and Worldwide Affairs Programme of Nanyang Technological University and Rajawali Fellow at the John F Kennedy School of Federal government, Harvard University. He is the author of the newly launched e book, three-in-one: Governing a Worldwide Monetary Centre, published by Entire world Scientific.