| 2.22 Manufacturing remains a
key part of our economy, accounting for about
a quarter of our GDP. We aim to double our manufacturing
output and value added by 2018. We must support
it with R&D, create value through innovation,
and become a global leader in niche areas.
2.23 Advanced economies like Japan have shown
how to sustain their manufacturing edge through
higher productivity and innovation. Canon is an
example. Canon continues to manufacture cameras
in Japan. It replaced its long conveyor belt assembly
system with a cell system, where small teams of
workers work in cells to assemble a product from
start to finish. This is more efficient, because
it allows for flexibility in production and workers
can see the production process ahead of them.
With the cell system, a worker can assemble a
digital camera much more quickly.
2.24 We too must upgrade our manufacturing sector.
We have made good progress. For example, Seagate,
the world’s largest hard disk drive company,
has vertically integrated its R&D, manufacturing
and headquarters functions including intellectual
property management in Singapore. Its automated
“factory of the future” manufactures
various hard disk drives here. Seagate develops
and produces its latest generation of 1-inch hard
disk drives here. These are used in advanced electronics
products such as Creative’s Zen MP3 players.
2.25 Singapore is also home to a strong base
of third party contract manufacturers like UMC
and Chartered Semiconductor. Presently, tools
bought on behalf of their overseas clients but
used in Singapore for the manufacturing process
attract GST; this is often added to the invoice,
making us less cost competitive. To put our contract
manufacturers on an equal footing with their counterparts
in Taiwan or UK, I will allow the supply of tools
used in the manufacture of goods for export to
be zero-rated for GST. This change will take effect
from 1 April 2006. IRAS will release details later.
|
