Article

By: Maurine Chong, Austrade Senior Trade Commissioner, Singapore
Date: 1 November 2006

Doing business in Singapore is like operating in a home market away from home, says Austrade’s Senior Trade Commissioner to Singapore.

Hop into a Comfort Taxi at Changi Airport and you’ll get your first insight into ‘beginner’s Asia’, as Singapore is commonly called. Your English-speaking taxi driver, who is specially trained to make tourists feel welcome, will tell you he has been to Australia many times and his son or daughter is studying there. In fact, this is likely to be the case with most people you meet on your trip.

Singaporeans know Australia well. They consider Australia “a friendly country with creative people and innovative ideas” and Australia enjoys a strong reputation as a reliable supplier of quality goods and services. You only have to go to the local supermarket for proof of this. From sprouts to chilled pork, Australian products line Singaporean supermarket shelves. Australia hardly requires an introduction in Singapore and the reverse is also true. However, the emerging mega markets of China and India overshadow export opportunities in Singapore.

With a population of 4.2 million, Singapore boasts a GDP of $106 billion - the fifth highest per capita GDP in the world. The island nation is Australia’s largest trade and investment partner in South East Asia, with two-way trade alone now worth over $12 billion. Yet the untapped potential is significant following the 2003 Singapore-Australian Free Trade Agreement (SAFTA). 

Singapore is a natural first market for Australian exporters, given the geographical proximity, market sophistication and sound business culture. In fact, doing business in Singapore is like operating in a “home market away from home”. Last year alone, Austrade helped about 140 new Australian exporters take their business to Singapore.  In attracting foreign direct investment, and making the country a regional and international hub for multi-national companies, the Singapore Government has committed to a legal and policy framework that enforces corporate governance and intellectual property rights. It provides a level of security and comfort in doing business similar to the US and UK. With an open and transparent corporate process, an emphasis on quality over price and a history of entrepot trading, Singapore offers Australian companies the most attractive business environment in Asia.

In a nutshell, the Singapore market is competitive, efficient and transparent. Since SAFTA came into effect in 2003, new trade and investment opportunities opened up for both companies from both countries. Australian companies are now guaranteed improved market access and national treatment in Singapore, which means they can compete on a level playing field.  A significant gain is in the services sector and in the arena of government procurement, worth over $8 billion annually. 47 Singaporean government ministries, agencies and statutory authorities regularly offer tendering opportunities for pipeline projects. In 2005 alone, 38 percent of Singapore’s government tenders were awarded to international organizations, including Australian architectural and design firm, Woodhead, which secured a contract to design the interiors of Changi Airport Terminal 3.

As one of the most sophisticated players in Asia, the Singapore Government is looking for best value in new and innovative products and services from Australia and not necessarily the lowest prices. Potential pipeline tender opportunities are available in Biotechnology, Defence and Homeland Security, Education and Training, Health and Medical, Infrastructure, ICT and  Professional Services. Austrade can provide valuable insight into navigating the tender process and what the Singapore Government and its linked bodies are looking for.

The Mutual Recognition Agreement under SAFTA has strengthened ties between professional bodies in both countries, resulting in a higher degree of acceptance of Australian service providers. Austrade is collaborating with CPA and Singapore HR Institute to promote corporate training capabilities from Australia.

For Evolve Executive, a one-person corporate leadership training firm, Singapore was the gateway not only to Asia but to the rest of the world. Following an introduction by Austrade to a multi-national bank with a regional head quarters in Singapore, Evolve is now training mid to senior level managers for the multi-national bank in China, Hong Kong, UK and the US.

The modern and sophisticated Singapore is the perfect springboard to Asia for SMEs and major players alike. Opportunities exist for Australian companies in financial, legal, educational, professional services, food and beverage, consumer and lifestyle products, arts, franchising, ICT and intellectual property.

With its high influx of international travelers, many regional markets look to Singapore as a benchmark for new products and services, making the country a good base for regional and international exposure.

New ICT exporter, BIT, with technologies in next generation data management and business intelligence solutions, leveraged Austrade’s on the ground market knowledge and network to enter into Singapore.  As the first Australian company to undertake application software development in Singapore, BIT established a 25-skilled professional R&D centre in Singapore in 2004. BIT has also won a major consulting contract to undertake knowledge management and integrated business intelligence project with a local Singapore bank and is beginning to make inroads into India and Thailand.

The key to success in Singapore’s unencumbered and highly sophisticated market is to understand the country, the market and the competition, and leverage Australia’s standing as a quality goods and services provider. With 17 Singaporean and Australian industry specialists focussing on the Singapore market, Austrade can provide market knowledge and access, and interpret cultural and business practices for Australian companies wanting to succeed in Singapore.