Singapore-United States Economic Ties: A 20-Year Success Story

Twenty years after the signing of the Singapore-United States (US) Free Trade Agreement (FTA), nearly 6,000 American companies now operate in Singapore. These firms span diverse sectors including semiconductors, information technology (IT), healthcare, carbon services, energy, and chemicals, as well as numerous consumer goods companies. The relationships forged between these American enterprises, their employees, and local Singaporean companies have created significant economic impact in the region, fostering innovation and mutual growth.

Corning: From Kitchenware to High-Tech Glass

One such example is Corningware, a well-known kitchenware brand. Not many know that the growth of the company that invented the brand is deeply intertwined with Singapore’s development. When Corning first set up shop here 50 years ago, the local team consisted just two employees marketing kitchenware primarily to housewives. Back then, owning a set of high-quality Corningware was a mark of pride for many homemakers.

As of 2024, Corning has expanded significantly, celebrating its 50th anniversary in Singapore with over 70 employees and a diversified product line that includes Gorilla ^® Glass and fiber optic cables. Gorilla ^® Glass is used by smartphone makers from Apple to Samsung and Corning's fibre optic cable systems serve various international banks, while its antenna and cable systems are used in iconic locations like Marina Bay Sands and Singapore Sports Hub.

In an interview with Lianhe Zaobao, Adrian Chan, Corning International’s General Manager for Southeast Asia (SEA), highlighted Singapore's strategic importance as the company's regional headquarters, overseeing marketing efforts and global supply management.

"Despite its limited market size, Singapore shines in terms of its prime geographical location and excellent regional connectivity," Chan explained. "This has helped the company expand into Vietnam, the Philippines, and Indonesia."

Chan also pointed out that local employees are highly knowledgeable with a well-developed worldview. "They're acutely aware of global events, understand the complexity and challenges, and consider the opportunities beyond Singapore. "

Continuous growth in the region led Corning to set up local offices to provide support, such as offering consultations using local languages, to ensure the smooth delivery of goods and logistics. "We manage local businesses from here, leveraging local resources and personnel to work closely with customers in each market," Chan adds.

Last year, Corning partnered with Singapore’s Bioprocessing Technology Institute in the development of cultivated meat, and the company plans to continue expanding in SEA with new products and services.

US Investments: A Cornerstone of Singapore's Economy

The US remains Singapore's largest foreign direct investment partner. In 2023, Singapore’s Economic Development Board (EDB) attracted S$12.7 billion in Fixed Asset Investment commitments, with US companies contributing S$6.6 billion—nearly half of the total.

Pee Beng Kong, Executive Vice President of EDB, explained the significance of these investments: "They play a crucial role in driving Singapore's economic growth and developing local talent." He added that many US multinational corporations have established and expanded their operations in Singapore to serve Asia and other international markets.

Gradiant: Leveraging Singapore's Research Capabilities

Like Corning, US water treatment company Gradiant also chose Singapore as its Asia-Pacific headquarters. The company has set up its Global Innovation Centre here to run core research and development (R&D) activities, and leverage Singapore’s strength in scientific research.

Gradiant’s President, Govind Alagappan, explained that the company selects overseas offices based on each country’s strengths. Singapore’s well-regulated water treatment policies and its commitment to research and innovation make it attractive to many tech companies.

"Singapore is home to industries such as semiconductors, petrochemicals, and pharmaceuticals—many of which are large, well-established companies with clear sustainability and social responsibility agendas. This ecosystem allows us to promote our technology at a faster rate, compared to doing the same in 10 different countries simultaneously," Alagappan noted.

For the same reason, Gradiant has based its core management team in Singapore, hired local leadership and collaborates with local universities to recruit top graduates, while its engineering teams are concentrated in India, the Middle East, and China.

The presence of US companies in Singapore facilitates knowledge transfer and technological advancement, particularly in cutting-edge technologies, benefiting local employees.

American Corporate Culture: Retaining Talent in Singapore

In today’s fast-paced job market, it is increasingly rare to find young professionals who are willing to stay in a company for more than two years. However, some employees at US companies in Singapore have bucked this trend.

Melvin Chia, a 34 year-old research specialist at Procter & Gamble (P&G) Singapore Innovation Centre, has been with the company since graduating from polytechnic 11 years ago. He works on developing haircare products and has had a passion for science from a young age.

Last year, P&G, a multinational consumer goods giant, celebrated 35 years of operations in Singapore. What started as a small sales team of fewer than 100 employees has since grown into a regional headquarters with over 2,300 staff. Today, the Singapore office also serves as the company’s regional R&D hub, housing one of the largest private-sector research centres in the country. The company also announced in 2023 that it will invest more than S$100 million to establish a new state-of-the-art manufacturing facility in Singapore.

Chia attributes his long-term commitment to P&G to the opportunities for professional growth and the collaborative team spirit. "The company provides numerous opportunities to excel and develop my career," he says.

According to the 2021 American Chamber of Commerce Manpower Survey, US companies employed a total of 200,000 workers in Singapore.

Similarly, Ramona Koh, a 34 year-old program manager at Google, hopes to stay with the tech giant long-term. Koh’s role involves minimising downtime at Google’s data centres by ensuring that any damaged equipment is repaired promptly.

She first joined Google through its Skills Ignition SG program in 2021, where she learned digital marketing and Google Analytics tools during a three-month training course. This was followed by a six-month internship with Google’s payments team, where she gained experience in project management.

After completing her internship, she was successfully hired by Google in 2022. The company’s family-friendly policies, particularly the flexible working hours to meet caregiving needs, is what attracted Koh to stay.

"Google prioritises employee well-being and family needs," Koh explains. "Whether working from home or the office, as long as we complete our tasks on time, we have the flexibility to work remotely." This flexibility has allowed her to pursue her career while taking care of her two young daughters, aged three and five.

Google's "no-blame" culture also encourages employee growth and learning. Koh recounts how this approach helped her gain confidence and excel in her role after joining the company through an internship programme.

Google’s Singapore office, which serves as the company’s Asia-Pacific headquarters, employs over 3,000 people.

Singapore-US FTA: Opening Doors for Local SMEs

The Singapore-US FTA, now in its 20th year, has played a crucial role in boosting bilateral trade and helping local small and medium-sized enterprises (SMEs) expand overseas. Since its implementation, bilateral trade between the two nations has nearly doubled. In 2022, the US was Singapore’s second-largest trading partner, and Singapore ranked as America’s 17th-largest. The US enjoyed a trade surplus of US$40 billion (approximately S$51.3 billion) with Singapore.

Song Seng Wun, a Singapore economic advisor at China Galaxy Securities, notes that the FTA has simplified procedures for SMEs looking to enter the US market.

The agreement eliminates tariffs for all of Singapore’s exports to the US. It gives tariff preference based on the exporter’s declaration, waives Merchandising Processing Fees for Singapore originating products and safeguards market access. It also offers a more predictable business environment for service providers and protects Singaporean investors and their US investments.

Dr Cai Daolu, a senior lecturer at the National University of Singapore Business School, emphasised the importance of the FTA's intellectual property protections, particularly for companies investing in new technologies like artificial intelligence (AI).

"A stable framework is necessary to foster innovation, and the FTA provides that stability. It ensures that companies in both Singapore and the US can innovate with confidence and reap the rewards of their technological advancements," Dr. Cai explained.

With significant changes to global economic trends and market conditions, Song believes it may be time to update the agreement, with a stronger focus on cooperation in the digital economy and sustainability to create new growth drivers and business opportunities.

This two-decade-long partnership between Singapore and the US serves as a testament to the power of strategic economic collaboration, fostering innovation, growth, and mutual prosperity in an increasingly interconnected global marketplace.

Source: Lianhe Zaobao ©️ SPH Media Limited. Permission required for reproduction.

Note: EDB sought permission from Lianhe Zaobao to independently produce an English translation of "悉看大势：美企扎根小红点 经济影响大红火", which was published 6 October 2024.