Pictures of the Future    Spring 2006

"What We Can Do in Five Years Might Take 50 Elsewhere"

Interview with Tony Tan

Dr. Tony Tan, 66, is one of the architects of Singapore’s economic success story. He was Deputy Prime Minister from 1995 to 2005. Before that he consecutively headed the ministries for finance; education; health; trade and industry; and security and defense. Today, he is chairman of the National Research Foundation, a powerful and well-funded government body established in January 2006 to oversee Singapore’s effort to become an international hub for research and development

Dr. Tan, when it gained independence in 1965, Singapore was a Third-World country. Today it is one of Asia’s wealthiest and most dynamic economies. What is the secret of its success?

Tan: Indeed, we find ourselves today on the verge of being a developed country. But there are no secrets to that. We have invested in world-class infrastructure, good education and the environment. We have accepted competition, analyzed our own strengths and weaknesses and opened our country for immigration and trade. Everybody knows that these are necessary ingredients, but in Singapore we have actually taken the steps necessary for success. Still, the greatest challenges are yet to come.

Such as?

Tan: Two trends are currently changing the world. The first is the economic upswing in Asia, in particular in China and India. In the 21st century, these two economies will become very powerful. Together, they have almost half of the world’s population. They are also posting the highest growth rates. China has been expanding its infrastructure at an enormous pace for 20 years, and India, although a little slower, is catching up and making its presence felt. The second trend is globalization. Through the Internet and real time communication, the world is becoming integrated. This affects all of us. Companies such as Siemens have to operate on a worldwide basis to coordinate their production, sales and marketing plans. Singapore has to come to terms with these forces, too—but we also see great opportunities here.

Where do you see these opportunities?

Tan: China and India will revitalize the region. Overall, our manufacturing base is growing, as is the inflow of foreign investment. And I think it will continue to do so in the future. This gives us the opportunity to continuously progress toward higher value-added goods. In electronics, we started out by assembling radios and TV sets. To some extent we still do so, but we also make computer chips and so on. We are also starting to produce biomedical products. Five years ago we didn’t have a biomedical industry; now it accounts for 6 % of our GDP.

What role does infrastructure play in this context?

Tan: We are continuously improving our infrastructure in order to make our economy more competitive and our environment a more pleasant place to live. One example is our airport. We have become a successful air traffic hub, both with regard to passenger and freight traffic. In fact, we are currently building our third terminal. At the same time, we are investing in upgrading our roads, our sewage treatment plants, our telecommunication system, and so on.

How can companies like Siemens help the Republic of Singapore?

Tan: Siemens has been here for a long, long time and has contributed to our economic growth. For example, we have cooperated very successfully in reclaiming water. There is a lot of potential regarding cooperation in research and development (R&D). In the 21st century, investment and economic growth will follow talent. As a result, Singapore is set to become a talent hub. Our education system is now world-class and we have very attractive R&D facilities. For the next five years, the government has earmarked some US$7.4 billion for public sector R&D. Our research, industry and government agencies work very closely with companies like Siemens to deliver the products the world needs today.

China is also successfully upgrading its university system. How are you going to compete?

Tan: Of course we will have to take the Chinese challenge very seriously. But I think that world-class companies like Siemens will continue to put substantial resources into Singapore. One key reason is that we not only respect intellectual property, we protect it. That is one of the problems of transferring leading-edge products to China. Any technology you bring to China is in danger of being pirated and lost. Another reason is that people from abroad enjoy living in Singapore, because we are open-minded, have a clean environment and excellent health services. To give one example, our national universities have a collaboration with MIT. Our students comprise some of the brightest talent in the region, and out of the 600 students who have graduated so far, 70 % have decided to stay and work in Singapore. Another advantage for foreign investors is that all Singaporeans speak English. In fact, English is the language we have been using in our schools and public service for the last 40 years.

How do you intend to ensure that Singapore stays ahead of its regional competitors?

Tan: One big advantage that sets Singapore apart is the speed with which we translate an idea to a plan, which we then quickly implement. We have the ability to move quickly and to organize ourselves. This is partly because we are a city-state and don’t have a rural population. In other words, what Singapore can do in five years might take 50 elsewhere. And there’s another important reason for our success. We are prepared to take risks. This also explains our major drive in R&D.

Judging from the results, your risk management has been very impressive.

Tan Touch wood, but so far we have either been very smart or incredibly lucky.

Given the trend toward urbanization, there is an increasing need for solutions that make cities better places to live. Could Singapore be a role model here?

Tan: I don’t think that we should hold ourselves up as a model. But some or the lessons we have learned might be useful for others. We have had many delegations from China and India, and even some from European cities. We are happy to share our experiences, because we ourselves have benefited a lot from going to other countries and adapting what has been done there.

What will Singapore look like in 2015?

Tan: In 2015, Singapore will be a cosmopolitan city with a high standard of living and a very good municipal infrastructure. We will be a hub for media, research and trade. Alongside Singaporeans, people from China, India, Europe and America will work and live here. Singapore will have an appealing entertainment scene, interesting jobs, and excellent housing and shopping facilities. Our restaurants will serve great food from all over the world. In short, it will be a very exiting place to live.

                                                                                   Interview by Bernhard Bartsch