From Efficiency-Driven to Innovation-Driven Economic Growth : Perspectives from Singapore

Thumbnail Image
Files in English
English PDF (408.45 KB)
English Text (113.72 KB)
This paper looks at Singapore's efforts to transform the economic growth base from one that is predominantly efficiency-driven to one that is more innovation-driven. To accelerate the transition process, the government is aggressively investing in "innovation infrastructure"-systems and institutions that make the city a more conducive environment for innovations. The modus operandi, with a distinctive "winner-picking" flavor, mirrors that of its earlier strategic industrial policy in building up the manufacturing sector. It is also in sync with the new urban growth literature which argues that the success of any innovation-driven growth strategy depends on a city's ability to attract a large community of creative individuals in different fields. Innovation infrastructure building requires more than putting in the right systems. It also requires a mindset change at various levels of society. This paper looks at how the government's policy philosophy and practices have evolved over time, and discusses the effectiveness of the government-led, strategic supply-push approach in propelling Singapore onto an innovation-driven growth path. It takes into consideration the city-state's underlying comparative advantages (or disadvantages) and asks how Singapore's existing strength in efficiency infrastructure may give it a first mover advantage in attracting creative talent, how its success may be affected by the small size of the economy, and the various political and social constraints that a small sovereign city-state faces. These issues are explored against the backdrop of the keen competition among the major cities in the region to become an innovation hub.
Link to Data Set
Tan, Kim-Song; Phang, Sock-Yong. 2005. From Efficiency-Driven to Innovation-Driven Economic Growth : Perspectives from Singapore. Policy Research Working Paper; No. 3569. © World Bank, Washington, DC. License: CC BY 3.0 IGO.
Report Series
Report Series
Other publications in this report series
  • Publication
    Do Disasters Always Increase Intimate Partner Violence? Evidence from the 2018 Earthquake in Papua New Guinea
    (Washington, DC: World Bank, 2024-06-12) Leng, Alyssa; Tandon, Sharad
    This paper examines how an earthquake in Papua New Guinea changed people’s attitudes about and the prevalence of intimate partner violence. Although there are several reasons why disasters can aggravate intimate partner violence, among men in disaster-affected regions, the acceptability of intimate partner violence declined significantly. There was a smaller and noisier decline in reported incidents of intimate partner violence, driven by declines among women, who are the least likely to underreport intimate partner violence. The results highlight that the responsibilities of household members and social norms can change in sufficiently turbulent disasters, which can lead to improvements, and that measurement issues need to be better addressed to improve understanding of intimate partner violence.
  • Publication
    The World Bank’s New Inequality Indicator
    (Washington, DC: World Bank, 2024-06-11) Haddad, Cameron Nadim; Mahler, Daniel Gerszon; Diaz-Bonilla, Carolina; Hill, Ruth; Lakner, Christoph; Lara Ibarra, Gabriel
    The World Bank recently introduced a new key indicator to guide its work: the number of countries with high inequality, defined as a Gini index above 40. The new indicator was introduced as part of the new World Bank vision of ending poverty on a livable planet. This paper reviews why reducing inequality matters for ending poverty on a livable planet, summarizes the advantages and disadvantages of using the Gini index to track inequality, outlines challenges in measuring inequality, and discusses what a Gini threshold of 40 implies. Using the most recent data for every country, 52 countries of a total of 169 countries are classified as high inequality countries, which represents a decline from 74 countries at the beginning of the millennium.
  • Publication
    How Much of Economic Growth Trickles Down to the Population in Resource-Rich Countries? Evidence from Papua New Guinea
    (Washington, DC: World Bank, 2024-06-11) Baxi, Paripoorna; Naidoo, Darian; Tandon, Sharad
    There was substantial growth in the resource sector in Papua New Guinea during the last resource boom, increased revenue collection by the government associated with that growth, and significant increases in international assistance, all which might have translated into improved well-being outcomes across the country. For a better understanding of whether these changes improved household-level outcomes, this paper updates estimates of key well-being outcomes in the country. The analysis imputes monetary poverty status using nonmonetary indicators in the 2016 –18 Demographic and Health Survey and estimates the World Bank’s Multidimensional Poverty Measure. Despite the country’s significant growth since 2009, monetary poverty and access to several essential services hardly changed, which stands in stark contrast to the substantial improvement across the rest of the world and other comparison regions over the same period. Combined, the results illustrate that it is possible that very little of resource-led growth trickles down to the population and that the link between macroeconomic and microeconomic outcomes is more tenuous in Papua New Guinea than found in other resource-intensive settings.
  • Publication
    Firm Adaptation to Climate Risk in the Developing World
    (Washington, DC: World Bank, 2024-06-11) Grover, Arti; Kahn, Matthew E.
    How firms in the developing world adapt to changes in weather extremes will play a key role in determining their nation’s economic growth. This survey of the recent microeconomics adaptation literature suggests that although firm competitiveness is negatively affected by weather events, firms may bounce back better under certain conditions. The adaptation and resilience of firms to climate change depend on their capabilities, the available information on risks, and the depth of insurance and financial markets. As real-time weather forecasting improves, firms are better informed about these risks and this affects their decisions regarding their location, production, and configuration of supply chains. A firm’s resilience also depends on the quality of public investment in infrastructure and the social safety net. Understanding that market frictions can slow the pace of adaptation, the paper concludes with some insights on the options available to policy makers.
  • Publication
    Barrier or Opportunity? How Trade Regulations Shape Colombian Firms’ Export Strategies
    (Washington, DC: World Bank, 2024-06-06) Rosenow, Samuel
    Firms increasingly must contend with trade regulations to access foreign markets. This paper quantifies the relative importance of trade regulations and their heterogeneous effects for Colombian firms exporting to Latin America between 2007 and 2017, focusing on specific types and channels. Using panel evidence from a firm-level gravity model with a difference-in-differences identification strategy, technical barriers to trade and quantity control measures both decrease trade on average. Other non-tariff measures and tariffs play a minor role. The technical barriers to trade and quantity measures reallocate trade from small to big firms. The same mechanism benefits firms participating in global value chains. However, quantity controls make it more likely that big firms will leave export markets to the benefit of smaller ones. The results control for the endogeneity of trade regulations and are robust to the use of different samples and measures of firm size.
Journal Volume
Journal Issue
Associated URLs
Associated content