We practice what an American economist, Professor Edgar H. Schein of MIT, calls strategic pragmatism. He wrote a book on the culture of Singapore’s Economic Development Board. Our EDB champions strategic thinking and pragmatism in implementation. In spirit, our development philosophy is similar to Mr. Deng’s “to seek truth from facts.”
In development economics, all countries go through three stages and four phases of growth. The three stages of growth are (a) primary– agriculture, (b) secondary–manufacturing, and (c) tertiary–services.
I now add a post-tertiary stage (d), namely knowledge, which underpins all three stages.
The four phases of growth are (a) low cost, low tech, (b) low cost, medium tech, (c) high cost, medium tech, and (d) high cost, high tech.
All developing countries including Singapore and China began as low cost, low tech producers. As you know, Singapore inherited from the British a stagnant economy and thousands of people with no jobs. Yet this abundance of unskilled, low wage labor enabled Singapore to be competitive producers of garments and wigs. These labor-intensive industries helped absorb our unemployed workers.
As unemployment dropped, wages began to rise. The MNCs from the United States, Europe and Japan were attracted to Singapore not just because of good governance, though this is a precious resource we have painstakingly built up. They came because we began to raise our educational standards and upgrade skill levels through industrial training centers, polytechnics, and the engineering faculties of our universities.
