Business expansion based on finding niches
It is an understatement to say Singapore likes to see itself as a hub. Government policy makes the city-state a hub of many things — from moviemaking to casinos, from silicon chip manufacturing to oil refining.“Singapore has no oil of its own, but has become one of the world’s leading refiners,” says the Media Development Authority’s deputy director, Michael Yap, who is spearheading plans to build a leading games industry. “What we are good at is process control and management. And we are good at finding business niches: competitive advantages in places where they should not be,” Yap adds. Among the newer hub strategies, the interactive digital media — or IDM — initiative in particular appears to be taking root. It boasts the establishment of Lucasfilm Animation’s first production facility outside the U.S., the launch of Japanese games company Koei Entertainment’s local operations, and the transfer of the regional headquarters of Electronic Arts from archrival hub city Hong Kong. IDM got its biggest boost in 2006 when the government allocated $500 million over five years to develop the sector. The goal is for new media research and development to fuel the growth of the larger media economy from an economic base of $4.2 billion in 2005 to a $10 billion value-added sector boasting 10,000 new jobs by 2015. Singapore is also helping its new media cause through grass-roots programs encouraging research and development in five sectors including games and animation; mobile media; and virtual, mixed and simulated realities. Another initiative is the Games Creation Community, which provides software development kits and allows local startups to develop their products. GCC is backed by game developers, consolemakers, vidgame distributors, industry associations, middleware suppliers, publishers and venture capitalists. Singapore’s small size remains a handicap when compared with bigger countries that can lean on larger domestic markets and bigger talent pools. “This sort of industry doesn’t develop overnight, and it will probably take a few years for it to take root,” says Dharmo Soejanto, a technology analyst at Kim Eng Securities. But the country’s stability gives it an edge. Singapore was for several years ranked by the Property & Environment Research Center as having the best intellectual property rights protection in Asia. Rule of law was certainly a factor in Electronic Arts’ decision to open its Singapore HQ — that and the need to localize products for the growing Southeast Asian economy in which Singapore is the undisputed hub.