The World Bank is currently advising newly industrialized countries on how to encourage growth and they have asked for your help. Using the internet and other resources, write a 2 page essay researching the factors behind economic growth in Hong Kong and Singapore. Which of these methods of encouraging growth would you suggest to a newly industrialized economy?
Hong Kong and Singapore together with Korea and Taiwan are considered to be the newly industrialized economies in South East Asia (Wong, 2003). Due to their rapid economic growth these countries has been referred to as Asia’s “Four Little Dragons” (Tega, 2007). This paper aims to examine the different factors behind the economic growth of Hong Kong and Singapore respectively. Afterwards, I would extract the features that could be utilized by other newly industrialized economies in order to encourage and increase their own economic growth.
The manner in which the Hong Kong has encouraged economic growth is reflected in the manner in which it conducts its economic policies. Economists have utilized the slow growth formula in their analysis of the said economy and have revealed that on of the factors of its success (which is for them inconsistent, at times progressive and in other aspects lagging); is its focus on proper allocation of sources, economic scales and education. However, although Hong Kong has done well on prepping up these three factors, it has to a certain been most fruitful in its current move to be a leader in focusing on becoming a prolific user of information technology in its attempt to sustain economic growth.
The economy of Hong Kong is heavily reliant on its manufacturing and service oriented industries. This well developed service sector is considered to a vital role in promoting economic growth. In a nation anchored on such development, communication and information are significant (Tega, 2007). The government of Hong Kong has led full intervention with regards to technology initiatives in line with this need. This is seen to include the promotion of IT in local manufacturing enterprises as well as the increase in support for research and development in the academe and other sectors. As a result, the TFP growth of Hong Kong, an important basis for economic success has tremendously increased to level other competing economies.
Singapore today promotes its economic strategic plan as a high technology economy. It has focused on developing education and training to include competitiveness technical skills development. The plan includes encouraging the development of human resources; promoting national teamwork; being globally competitive; creating a conducive climate for innovation; and improving manufacturing and service clusters (Tan, 1997).
This is placed into reality by the government’s move to intensify the technology availability in schools as well as intensifying technical training in both secondary and tertiary education. In doing so, Singapore is able to maximize technology by having a skilled and able work force. 1.6 percent of Singapore’s GDP is allocated for R&D (research and development) in the year 2000. Doing so allowed the said country to match technological capacity with industrial demands; and taking the front line in toning itself with the demand of stronger states in the global economy (Tan, 1997). This repositioning of education and training as a prime consideration in economic growth has been fruitful in maintaining sustenance and progress in the era of globalization.
As such it appears that two points should be taken in by those who wish to follow the foot steps of Hong Kong and Singapore; these are the focus on technology and education (development of HR) in order to encourage economic growth. In an age when economies are machinized and cyberspace is just as close to reality; the ability to cope with such demands of innovation and technical aptness is a make or break situation. Other NIEs should emulate the example of Singapore and Hong Kong in building a national economy that can sit itself among other economies in the 21st century. IT and R&D— keep this strong and surely a country would be able to have economic growth.
Tan, P.B. (1997). Human Resource Development For Continued Economic Growth: The Singapore Experience. In ilo.org. Retrieved September 6, 2007 from http://www.ilo.org/public/english/dialogue/actemp/papers/1998/tanhrd1.htm#c2_1
Tega, D. (2007). A Study on Technological Progress and Economic Growth in Hong Kong. In Associated Content Media. Retrieved September 7, 2007 from http://www.associatedcontent.com/article/299876/a_study_on_technological_progress_and.html?page=4
Wong, R. Y. C. (2003).Understanding Rapid Economic Growth:A New Tale of the Four Asian Dragons. In the Economist.com. Retrieved September 7, 2007
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