THE TOILET TEST (via Tom Morin):

Singapore unruffled by change (David Lammers, April 19, 2004, EE Times)

I went to Singapore in late March, expecting to find anxious hand-wringing about outsourcing. Instead, many Singaporeans, from taxi drivers to government officials, seemed fairly realistic about the rapid changes the world economy is now experiencing.

One of the most optimistic was Tan Choon Shian, director of electronics and precision engineering at the Economic Development Board. The EDB was influential in bringing hard-disk-drive manufacturing to the island when the personal computer industry started to take off more than 20 years ago, and the EDB remains an influential force in this government-led market economy.

I asked Tan about the drive manufacturers, several of which now manufacture in lower-wage countries, such as Thailand. In some cases, he said, companies are moving up the HDD technology ladder in Singapore. "As the drives get so small, the companies must figure out how to automate the manufacturing process here in Singapore so they won't contaminate the drive," Tan said.

And if companies move out, that is all part of the woof and warp of a modern economy.

"In the early 1960s, Singaporeans made toilet bowls, and that is long gone. We don't make it difficult for multinational companies to move out of Singapore-we can't do that if we want them to move in. Moving to lower-wage countries is just the way it goes in international business-it makes everyone more competitive," he said.

Perhaps we can derive an economic law from this: one yardstick of a nation's economic development is that it develops sufficient infrastructure to have indoor plumbing; a later one is that it is wealthy enough to farm out the mere manufacture of plumbing supplies.

N.B. The final stage is that which Japan is headed towards, where the bulk of the workforce is employed just changing the bedpans of the elderly.

Posted by Orrin Judd at June 16, 2004 3:18 PM