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Unlike China, Korea, and Indonesia, Singapore has no plans to lead a national aircraft program. Instead, the country's Economic Development Board has focused its efforts on promoting Singapore's status as an aircraft service and supply hub in the Pacific region. The country's manufacturing sector is committed to expanding production in value-added components and parts with wide application in the commercial aircraft sector, such as engine mounts, landing gear, actuators, and sheet metal assemblies. At the same time, both government and industry want the aerospace sector to assume a greater role in product design and development and view participation in an aircraft program as a potential vehicle for the acquisition of such capabilities.

Singapore's government promotes a competitive business environment, and despite state involvement in the aerospace sector, Singapore's aviation companies function as commercial enterprises. As a result, the aircraft sector is able to reap the benefits of government support for investment, research, and training, while also benefitting from public disclosure and business decisions based largely on economic feasibility.

Singapore's aerospace sector has indicated that it does not wish to produce and market its own commercial aircraft. Therefore, factors concerning the market appeal of aircraft are not pertinent to the current activities of Singapore's aerospace industry. However, the country's experience in service and supply, reputation for competitive manufacturing, focus on profitability, and internationally recognized certification and quality standards are assets Singapore's aerospace firms could lend to a regional aircraft consortium. Moreover, the industry's participation in a joint venture or risk-sharing partnership could add credibility to a collaborative aircraft project. The aerospace sector has shown a willingness to take part in such projects with its involvement in the AE-31X regional jet and interest in future aircraft programs.

Singapore became involved in parts manufacturing and aircraft servicing in the 1970s following the government's designation of the aerospace industry as a priority area for development. Primarily supportive of the military sector, an influx of multinational firms brought work to the commercial sector in the 1980s. The commercial aircraft industry grew quickly with two events in 1981 -- the opening of Changi International Airport, which expanded Singapore's capacity as an international servicing agent, and the signing of a BAA with the United States, which opened the way for international certification of locally manufactured parts and components.

Singapore's largest aerospace company, Singapore Technologies Aerospace (STAe), provides repair, maintenance, modification, refurbishment, and upgrade services for airframes, engines, subsystems and components in the military and commercial aerospace sectors. STAe currently operates under the engineering group Singapore Technologies Engineering (ST Engg). Aerospace manufacturing activities, formerly the responsibility of STAe, were separated from the company in 1995 and now fall under the investment holding company Singapore Technologies Precision Engineering (STPE). ST Engg and STPE both exist under the corporate holding group Singapore Technologies Pte Ltd., part of Temasek Holdings, which in turn falls under the Ministry of Finance of the Singaporean Government. STPE is not publicly listed, and although ST Engg listed shares on Singapore's stock exchange in December 1997, the government still controls a large portion of the company. In addition to these domestic firms, the aerospace industry further supports a number of joint ventures and multinational corporations involved in airframe and engine repair and maintenance, avionics, systems, and components.

Overall, Singapore's indigenous presence in the aerospace sector is low, as multinationals account for 80 percent of the industry's total output. Moreover, while the country's aerospace industry supports a total work force of 9,485, aircraft manufacturing activities accounted for less than 13 percent of the $1.2 billion produced by the aerospace industry in 1997.

As a leading financial center in Asia, Singapore's well-developed banking infrastructure and stock and bond markets present companies with access to varied sources of capital. The number of large foreign aerospace entities involved in joint ventures and subsidiary enterprises in Singapore, including Daimler-Benz, Pratt & Whitney, and AlliedSignal, is indicative of support of the aviation industry by Singapore's financial community.

Both domestic and foreign companies also receive support from Singapore's government. The nation has undertaken a number of initiatives to develop the nation's technological capabilities in high value-added, state-of-the-art industries such as aerospace. Through a variety of tax incentives, including tax holidays and tax breaks for investment in specific technologies, Singapore seeks to attract investment by multinationals in aviation-related sectors.656 In certain cases, the government provides start-up funds to companies or joint ventures in desired technological fields, then sells the state-owned portion of such businesses when the desired companies are established.

Further, in addition to a number of national R&D support initiatives encompassing all high technology sectors, the National Science and Technology Board (NSTB), under the Ministry of Industry and Trade, directs R&D programs targeted at aerospace. For example, in 1996, NSTB launched the Aerospace Technology Program, 3-year project which provides $16 million in NSTB funds for R&D for qualifying aerospace projects.

Singapore's participation in the civil aircraft industry is limited by the nation's lack of natural resources and small domestic market. However, a highly skilled work force, technological capabilities, well-developed industry clusters, and advanced transportation and manufacturing facilities are competitive assets supporting Singapore's role as a player in the global aerospace industry.

Singapore's extensive military work and experience in subsystems upgrades have advanced the industry's design capabilities in areas such as avionics and electrical systems. Though the industry has pursued these capabilities over structural design technologies, Singapore does participate in structural design programs. For example, the industry is designing the tail for Eurocopter's EC-120, and industry sources emphasize that Singapore has the technical base and inherent potential to build up core competencies.

In addition, though not as cost competitive as other Asian nations, labor costs in the aerospace sector are less than in the United States, and Singapore's work force is noted for quality production and schedule performance. Further, the government provides training grants to build up the nation's skilled labor pool, and the aerospace industry draws on outside academic resources to overcome the lack of a domestic aeronautical degree program. STPE, for example, has a scholarship program to educate staff at U.S., U.K., and French universities. Similarly, government initiatives include foreign recruitment of research professionals in high technology fields such as aerospace. In terms of research institutes, STAe maintains an engineering and development center and an R&D staff of 200, and NSTB supports two R&D centers, the Gintic Institute of Manufacturing Technology and the Institute of Material Research and Engineering, which contribute to the aerospace industry.



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