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Friday, September 30, 2011

Sizzling Singapore

If you follow world business at all, you are hearing and reading a great deal more about Singapore. This tiny city-state on the southern tip of the Malay Peninsula has been growing rapidly for decades. It covers a scant 253 square miles but packs an increasing financial wallop around the world.

There are 5 million people in Singapore with the great majority being of Chinese, Malay, or Indian descent. English is an official language but the majority also speak a Chinese dialect. It is something of a dream for entrepreneurs and businesses. There is no place in Asia where there is such ease of business registration, governmental support, plus all important favorable tax rates and incentives. And, perennially, the World Bank usually ranks Singapore as the easiest place in the world to do business.

Often referred to as the Switzerland of Asia, it is a pulsating financial center that holds it own with Tokyo and the increasingly powerful Shanghai. The savings rate is among the highest in the world so there has been extraordinary capital formation. After independence from Britain, lead governmental minister Lee Kuan Yew arranged for compulsory contributions in the 25% of income range to government controlled pension funds. While unappealing to American spending tendencies it was a big contributor in making the tiny nation rich.

With a shift away from the U.S. and U.K. in terms of media billing, I believe that in a decade or so Singapore may well become the world’s advertising hub.

Consider these facts—

Singapore is centrally located in Asia and as global billing tilts toward the east, they will literally be perfectly positioned.

Westerners are more comfortable in Singapore than anywhere else in Asia. Part of it is the ubiquity of English but also the appearance counts. The place is crammed with people but immaculate. It took Wrigley decades to get the government to allow them to sell chewing gum there! Senior management of holding companies would be comfortable here as the adjustment to Asia would be far easier than other choices.

Unlike other Asian powerhouses such as China or Korea there are no exchange controls. You may easily move capital in and out of Singapore or repatriate profits.

Advertising has made strides in Singapore. Arguably it is the Asian leader in outdoor, mobile and digital advertising. As the world moves to digital, the existing talent pool can help.

Many Singaporeans are of Chinese descent. As China grows, it might be easier for Singaporeans to deal with China than those from other nations.

So, we forecast confidently that Singaporean agencies will not remain as branch offices for the mega-shops much longer. By 2020-2025 they will be in the epicenter of global advertising and a few of the world’s top 10 holding companies will be headquartered there.

If you want to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

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