IF YOU are going to be niche, then keep it exclusive.
That is what economists here say about a new Singapore plan to pursue more 'niche business opportunities' in areas such as manufacturing aerospace components and urban planning.
Standard Chartered economist Alvin Liew called the pursuit 'realistic' and added: 'I think we have to limit how many directions we are going in. Singapore is small and has limited resources. We cannot go after 10 areas.'
Citigroup economist Kit Wei Zheng agreed: 'A comparative advantage by definition means you have the advantage in only one or two things. Don't try to be niche in everything.'
Singapore knows its forte is in urban planning and development, which are in high demand in developing Asian cities, especially those in China.
The Government acknowledged this on Wednesday when it announced the setting up of the Economic Strategies Committee (ESC) to devise new ways to grow the economy for the long term.
Prime Minister Lee Hsien Loong said the ESC will study five broad strategies: exploring new growth areas; anchoring global companies in Singapore and nurturing home-grown enterprises; attracting talent; creating high-value jobs for locals; and maximising resources such as land and energy.
This means looking into developing niche and new markets, maximising land use by going skyward and underground, and finding ways to reduce over-reliance on foreign workers.
Economists agreed that urban planning is a strength Singapore can capitalise on, but warned against competing in areas like manufacturing.
Mr Kit said: 'China is catching up, and it will be more and more difficult for us to keep one step ahead.'
Meanwhile, the ESC also wants to court large foreign firms - the next tier after the Fortune 500 companies - looking to expand in the region to set up base here, as well as study how to help Singapore firms go global.
This was met with mixed reactions from businesses and economists.
Those who run small and medium-sized enterprises (SMEs) want the Government to start backing them with the same fervour with which it courts foreign multinationals.
Singapore Business Federation chief executive Teng Theng Dar said the Singapore brand name is well regarded in many overseas markets, which is 'a strength that Singapore businesses should capitalise and build on as a comparative advantage to harness business opportunities'.
The Government can help companies tap into opportunities overseas in sectors that are doing well amid the crisis, such as energy, environment and other knowledge-intensive industries, he added.
Mr Ryan Lee, chief executive of local technology firm XMI, said: '(Focusing on helping Singapore SMEs) just might turn out to be a better economic development model for Singapore.'
He added that these foreign multinationals repatriate much of their profits.
Mr Lee's firm, which produces portable speakers, exports 95 per cent of its output.
StanChart's Mr Liew said: 'For years, we've been importing champions from other countries, but it should be the other way around - developing our own champions for export.
'Foreign companies may stay here for a few years, but can easily uproot to wherever else is developing faster later. Companies based in Singapore won't move away from Singapore.'
