The above picture represents a revolution. It is also a window to fresh ideas about the economic directions available to Singapore.
As most Singaporeans may recognise, the picture is of a board at a bus stop listing the route details of buses that call there. Almost all bus stops in Singapore have boards like that. But did you realise that no two of them are the same? Every bus stop has a different set of route listings, with details commencing from that particular bus stop. Thus each printed board is unique.
How is that revolutionary?
To do the same 20 years ago would have been considered madness; individualised printing was simply uneconomical. Then, high quality printing was done in big factories that first produced offset plates – one for each colour of ink – which were mounted on huge machines that churned pages out by the thousands. Many sheets of paper were wasted in the initial test run just to get the alignment of colours right. The set-up cost was so high, it was necessary to commission print runs of a few thousand in order to get unit costs down to manageable levels.
Even black-and-white printing based on the centuries-old type-setting method required at least 100 square metres of industrial space to house machines that were the size of small trucks. As a boy I used to marvel at these machines in my uncle’s shop, ever careful not to get ink on my clothes.
Today we print not just ordinary pages, but full-colour posters, from desk-top printers – and with a print run of exactly one piece because that’s all we need. Economies of scale have shrunk, they are now immaterial.
Three things made this possible:
- a revolution in information and imaging technology
- engineering advances in producing small printers with superb sharpness
- advances in materials science, creating new inks, etc.
Similar advances are going to revolutionise more and more sectors of manufacturing.
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The news story about expanding the Financial Scholarship Programme (I hadn’t known that one existed) said it aimed to develop “skills in specialist tracks, such as quantitative finance, risk management and specialty insurance.” (Straits Times, 23 May 2012, Grooming S’pore talent for finance, by Yasmine Yahya)
My first thought was: Here we go again, generals planning to fight the previous war. Has not fancy financial engineering been discredited already?
Perhaps I was being uncharitable. The fact is, Singapore has long been a financial centre and will likely remain so. We need to hone our skills.
However, we also need to take a salutary lesson from London (and Britain generally), where, in the last few decades, the financial industry came to dominate its economy. Yet, by its very nature, it’s a volatile industry, highly prone to excess. It’s also been widely blamed for creating huge income gaps, though I think it’s too simplistic to make a direct connection like that. When the subprime crisis in the United States began to spread globally, the UK trembled and fell into a recession (now a double-dip one). Manufacturing powerhouse Germany on the other hand didn’t suffer as much. My concern is that as we continue to be dazzled by the financial industry, we neglect other potential avenues of development.
The other thing about the finance industry is that it can entangle us in serious diplomatic difficulties with our neighbours. Perennial complaints that Indonesian cronies and Burmese generals are parking their ill-gotten gains in Singapore should validate my point. Moreover, in many ways, it is an extractive industry, drawing profit through cleverness. ‘Derivatives’ for example, is now spoken with a sneer. And since nobody likes to have his wealth exploited for others’ profit, it will always be skirting controversy.
That said, this is only one side of finance. The other side is that, firstly, it helps people safeguard their wealth, and more importantly, it can help create the financial wherewithal to grow a business.
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I want to draw attention to manufacturing. I think it’s a sector that we risk neglecting.
Partly it is because we still see manufacturing in 20th Century terms, with assembly lines manned by lots of cheap workers. When we saw the Chinese juggernaut coming 30 years ago, our first response was the ‘Growth Triangle’ (does anyone even remember the term?), the plan being to move the dirty and labour-intensive industries out to Batam and Johore. That didn’t go very far, mostly because (oh, what a surprise!) the Indonesian and Malaysian governments didn’t wish to learn from Singapore. Our second response was to focus on process industries such as petrochemicals and pharmaceuticals, which rely much more on capital investment than on labour. But this also kept us highly dependent on inward investment by foreign multinationals. How much of the value-added actually accrue to Singapore?
Now, however, new technologies are about to change the nature of manufacturing, where scale is no longer a critical factor of success. The chief input will be knowledge rather than land space or labour hordes. I think there is an opportunity to seize the initiative and make Singapore a manufacturing centre again. However, for that to happen, we must first stop being dazzled by finance.
What is this manufacturing revolution? Actually, it’s not that new. In specific sectors, it has already arrived, e.g. printing, as discussed above.
Particularly exciting is the advent of additive manufacturing. This is a process by which a product is made by printing many layers, slowly building up a three-dimensional object. Items of very complex shapes can be produced thus. If software can describe the shape, it can be made. An entire gearbox, water faucet or air compressor can be made thus, where presently, we need factories to make molds in order to cast the various parts, and then another factory to fit the parts together. Once we do away with mold-making, economy of scale is undermined. The same thing happened once we did away with offset plates.
Beyond hard objects, the same principle can be applied to bio-engineering. We can create proteins, antibodies and other biological products by stitching molecules together. And once this can be done, we may be able to print a kidney, thigh-bone or inner ear layer by nano-layer.
If you’re a subscriber to the Economist magazine, there is a feature about the new frontiers of manufacturing in The third industrial revolution, Additive manufacturing, and about manufacturing returning to rich countries. The magazine describes the new age as that of mass customisation, succeeding the age of mass production.
Simple things that should, even now, be within technological reach include:
- a new, complete set of teeth customised to fit one’s jaw;
- perfect shoes customised to fit one’s feet;
- plates, bowls, cups and fluted glasses that match the existing set in use;
- door handles and lock assemblies made to customers’ own designs;
- small medical devices from catheters to heart valves.
The new age does not depend on vast supply of land or labour. Imagine a place that makes things in relatively small factories or workshops, each highly automated with little need for humans. While this means that our physical limits are no barrier for us, they are no barrier to other places either. Things will be made locally, individually or in similarly small batches, in hundreds of cities around the world. The worldwide supply chains that so characterise our age may eventually become a relic of the past, and seen for what it is – a huge environmental disaster in the way it used fossil fuels to move things all over the globe.
However, Singapore can either be an importer of such technologies, or be among the creators of them. To be an importer is an economic dead-end, because when similar things are made locally elsewhere, using the same franchised technology, there is no export potential for what we make.
To ride the new wave means we must be creators of the knowhow. Hence, we will need the critical skills of the new age, which, as mentioned above, are information technology, materials science and engineering (for both the final products and the robots needed to make them). Add to these bio-engineering and product design. Not only will we need to invest massively in such education, we’re also talking about very high level, cutting-edge skills: People who wade into the unknown wrestling with ideas and innovations others might dismiss as utopian.
What Singapore will export is knowhow. We invent the new products and we create the technology to make them. We may make a few prototypes locally, and a few more to serve our domestic market and maybe neighbouring countries, but the larger value comes in marketing that knowhow further afield.
Ah, but the rub lies in the need to generate “cutting-edge knowhow”. For Singapore, there may well be an invisible barrier. If we have a culture that fears the unknown, dismisses experimentation and penalises those who would rock the boat, then we are adverse to a critical factor for success. How does an economy seize the opportunities presented by disruptive technology when politically and culturally we are acculturated to fear disruption?