The phenomenon defined as the Asian Miracle has been the countries of East and South East Asia realize, within thirty years, a social and economical progression comparable to that achieved by Europe in more than a century (Henry 2009 pg 3). To acquire technology from overseas, different countries adopt different means such as FDI, OEM and licensing. For example, Japan mostly used licensing and technology services, Chinese Taipei used OEM (own equipment manufacturing) and other types of subcontracting and Singapore and Malaysia used FDI (foreign direct investment). In comparing the development patterns of domestically owned and foreign owned firms in Asia as described by Mike Hobday. A case of a company called Singapore Telecommunication Limited (SINGTEL) based in emerging market is been study. Singapore Telecommunications Limited is a prominent business group in communication sector in Asia which operates and invests in all over the world. The company is based in South east, Singapore to be precise. Singapore Telecommunications (SingTel), the former monopoly and currently 54.4percent government owned. The development pattern of Singtel can be compared to the South-East Asian Transnational Corporations (TNC). Countries like Malaysia, Singapore or Thailand attracted foreign direct investment (FDI) from TNC's because of their low labour costs. In this essay brief overview of SingTel will be discuss. The development patterns as described by Mike Hobday with SingTel will also be compared. Similarities and differences will be look at.
SINGAPORE TELECOMMUNICATION LIMITED
According to information of Datamonitor, Singapore Telecommunications (SingTel or "the group") is a prominent communications group established in 1992 with operations and investments in 19 countries and territories across Asia Pacific, Europe and the US. The group provides range a range of communication services and solutions including fixed, mobile, data, internet, info-communications technology, satellite and pay TV. Its other businesses include the sale of telecommunications equipment. The group's major operations include wholly owned subsidiaries, SingTel and Optus in Singapore and Australia, respectively, and controlling interests in Bharti Telecom Group (India), Telkomsel (Indonesia), Pacific Bangladesh Telecom (Bangladesh), Warid Telecom (Pakistan), Globe (Philippines) and AIS (Thailand). The group primarily operates in Australia. It is headquartered in Singapore City, Singapore and employs about 23,000 people.The group operates through three business segments: Singapore, Australia, and Associates and Joint Ventures (Assoc & JV).Singapore business represents the services and products provided by SingTel and its subsidiaries (excluding Optus). In Singapore the group's major subsidiaries include SingTel Mobile, NCS, SingNet, SingTel Digital Media and Singapore Post.
COMPARING THE DEVELOPMENT PATTERN AS DESCRIBED BY MIKE HOBDAY WITH SINGTEL (SINGAPORE TELECOMMUNICATION LITIMED)
The rapid technological development of the NIEs over the past two decades has caught the attention of both developing and developed economies (Hobday, 1995). The technological capabilities of a firm can be conceptualized as having product technological capabilities and process technological capabilities1 (Wong, 1999). They have used trade and domestic credit policies to different extents and in different combinations to influence resource allocation, infrastructure development, firm size and cluster formation, skill development, technological activity and FDI attraction, to build local technological capabilities (Lall and Teubal, 1998).South East Asia (e.g. Malaysia, Singapore and Thailand) depend on TNC-led growth. Singapore leads within the region, boasting several wafer fabrication facilities and new product works (Hobday 1995). Hutchison Whampoa and Singtel, two companies with major interests in telecommunications, head the list. Industries prominent on the list include electrical and electronic equipment and petroleum. Most of the companies on the list are headquartered in Asia. The region's predominance as a source of foreign direct investment reflects its economic importance and dynamism. Among the Asian companies, Chinese firms from Hong Kong (China), Singapore, Taiwan Province of China and, of course, mainland China feature prominently. Malaysia has also emerged as an important home country for TNCs.
In Singapore, SingTel has had more than 128 years of operating experience and has played an integral part in the development of the city as a major communications hub in the region. In Australia, Optus serves more than six million customers. It has driven the competition as the challenger brand and led the way in technological innovations and breakthroughs. Over the years, SingTel has grown to be a global player with a strong regional heritage. With one of the most extensive and advanced telecommunications infrastructure, the Group offers unparalleled reach in Asia and beyond. SingTel is a global firm that operate in a number of countries and have service facilities outside their origin country just like Mike hobday as describe in the case of Samsung. With significant operations in Singapore and Australia (through wholly owned subsidiary SingTel Optus), the Group provides a comprehensive portfolio of services that include voice and data services over fixed, wireless and Internet platforms. SingTel's highly developed international network provides direct connections from Singapore to more than 100 countries. It is a major investor in many of the world's most sophisticated submarine cable and satellite systems. The Group is the second largest satellite operator in the Asia Pacific. SingTel also operates a pan-Asian chain of world class data centres, providing a suite of managed hosting Telco solutions branded EXPAN. Data centres are located in Australia, Hong Kong, Japan, Korea, Taiwan and Singapore. Through marketing alliances, EXPAN is also available in eight other markets including China and India (information gotten from datamonitor).
SingTel's ability to support multi-national corporations (MNCs) on a cross-border basis is anchored by its extensive network of SingTel Global Offices (SGOs). Found in 37 cities in 19 countries and territories across Asia Pacific, Europe and the United States, the SGOs provide MNCs with a single point of contact. Singapore and Taiwan Province of China are seen to be following the small- and medium-sized enterprise-public research institute (SME-PRI) innovation network model and the foreign direct investment (FDI) leveraging model. Singapore's FDI-leveraging model strongly pushes into the specialized high-tech industry for export markets and subcontracting promotion for SMEs to raise local content. Besides, there is an aggressive targeting and screening of multinational corporations (MNCs) to direct them into high value added and R&D intensive activities (Lall and Teubal, 1998; Wong, 1999). The externalization and internalization strategies for technology transfer have been successfully implemented in the NIEs. The externalization strategy adopted in the Republic of Korea and Taiwan Province of China is aimed at restricting the role of FDI, promoting inflows in other forms, and supporting domestic enterprises in mastering increasingly complex activities. Lall (2001), however, argues that such a strategy is difficult and risky and few other countries can replicate it. It requires a strong base of technological skills, entrepreneurs who are able and willing to undertake risky technological effort and an incentive regime that protects learning while imposing export discipline. Also, it needs a bureaucracy that is able to handle these tools efficiently and flexibly without being hijacked by particular interests. Meanwhile, the internalization strategy practised by Singapore is to rely heavily on internalized technology transfer via FDI, but not to leave resource allocation and technology to markets. This requires the Government to target complex technologies and induce MNCs to upgrade local functions. As pointed out by Amsden et al. (2001), MNCs in Singapore are reputed to undertake not only R&D locally but applied and possibly even basic research, although it is typically Government-induced. For instance, the Local Industries Upgrading Programme in Singapore has successfully encouraged MNCs to adopt a group of SMEs and transfer technology and skills to them. This programme pays the salary of a full-time procurement expert to work for specified periods with the adopted firms and help them upgrade their production and management capabilities to the required standards.
DIFFERENCE BETWEEN SINGTEL AND THE CASES USED BY MIKE HOBDAY
Singtel developments were based on having different subsidiaries in different countries which makes the development to move from one stage to the other. SingTel's Assoc & JV business includes its investments in associated and joint venture companies, which mainly comprise Advanced Info Service Public (AIS) in Thailand; Bharti Airtel in India; Globe Telecom in Philippines; PT Telekomunikasi Selular (Telkomsel) in Indonesia; Pacific Bangladesh Telecom (PBTL) in Bangladesh; and Warid Telecom in Pakistan. During 2008, SingTel and five other international telecommunications carriers including Bharti Airtel, Global Transit, Google, KDDI and Pacnet entered into an agreement to construct a new ultra high-speed submarine cable system linking the US to Japan. The group became the first satellite service provider in Asia to offer a maritime broadband service with global coverage. In the same year, the group planned to build a new data centre at Kim Chuan to offer secure and reliable network infrastructure services. Subsequently, The Maritime and Port Authority of Singapore (MPA) and SingTel entered into a MoU to collaborate for the promotion of maritime technology R&D as part of Singapore's development as a maritime telecommunications hub and international maritime centre. WHILE Samsung started its development through OEM contract and also learned much about production and marketing under OEM and licensing deals. In 1981 Toshiba licensed microwave oven technology to Samsung (Hobday, 2000).By the late 1980s; Samsung had acquired corders and colour TVs (Koh, 1992, pg 22). Samsung made huge effort to develop own production design as well as its own brand on overseas markets, while decreasing its dependence on OEM (Hobday 2000). Samsung developed the largest R&D centre in South Korea. In the case of Acer started its OEM relationship for the production of PC components in the early 1980s. And started series of acquisition that proved unsuccessful and the company had to fall back on OEM contact (Ernst, 2001). In 1988 56% of the Korean electronics industries were controlled by only four biggest chaebols: LG, Samsung, Deawoo and Hyundai (Bloom, 1992). Taiwanese firms are generally condemned to be struck in a catch up imitation incrementel innovation cycle, dependent on foreign MNCs and their margins are small to allow any development activity because they cannot capture the post production value added (Hobday, 2000).
Each NIE has to a certain extent adopted somewhat dissimilar foreign technology transfer strategies. For instance, GRIs is the main facilitator in the Republic of Korea and Taiwan Province of China but not in Singapore and Malaysia. In the Republic of Korea, the chaebol with ready access to financial resources are the main channel to transfer foreign technology via licensing. Under licensing deals, chaebol pay royalties for patent rights, as well as product, process and components technologies (Hobday, 1995). Instead of allowing foreign firms to establish local subsidiaries and determine the speed and scope of technology diffusion, some of the leading chaebol are encouraged to focus on learning and knowledge accumulation through a variety of links with foreign equipment and component suppliers, technology licensing partners, original equipment manufacturing (OEM) clients and minority joint venture partners. Meanwhile, SMEs that play the main bridging role in Singapore and Taiwan Province of China and to a large extent Malaysia are seen to be leveraging on the MNCs for foreign technology transfer. Their home grown conglomerates and SMEs merely play a complementary role in promoting technology transfer (Ernst, 2000).
SIMILARITIES OF SINGTEL AND THE CASE USED BY MIKE HOBDAY
Both SingTel and some of the case used by Mike Hobday grew rapidly as TNCs benefited from low cost labour. Many of these TNCs possess sophisticated and distinctive advantages which they have created and nurtured over many years. There are also complementarities between developed and developing country TNCs (especially Asian ones), for example in some electronics industries where developed-country TNCs retain R&D, product design, branding and sales of a product, but have disbursed production to contract manufacturers(world investment report, 2006). For example, SingTel, Samsung are the top non financial multinational corporation in emerging market. Malaysia, Philippines, Singapore, and Thailand stand out in East and Southeast Asia for their heavy dependence on parts and components for export dynamism. (Hobday 2000) Both FDI and OEM promote a gruel learning of technology and enabled enterprise to overcome technological and market barriers to entry. Hobday (1995) provides the most extensive evidence of the role of such transfers in East Asia's industrialization and export success. Based in large part on interviews conducted with firms in Hong Kong, Korea, Singapore, and Taiwan, Hobday's research shows that export-related technology transfers have played a vital part in number of prominent export industries, including among others, and as well as electronics products.
Traditionally, joint ventures have been the most preferred alliance form. In joint venture, firms pool their skills and resources in a newly created company that is characterised by joint ownership. Already in 1980s a larger variety of organisational modes were introduced. Both industries were involved in joint venture with other companies in other to make their company to grow. Numerous joint ventures were created. Joint ventures are the form of collaboration that entails the largest commitment by the investing firm (the MNC) as it provides technology, training for the local staff as well as machinery. The diversification of the production increased and result in finished or semi finished goods. Like SingTel's Assoc & JV business includes its investments in associated and joint venture companies, which mainly comprise Advanced Info Service Public in Thailand; Bharti Airtel in India; Globe Telecom in Philippines; PT Telekomunikasi Selular (Telkomsel) in Indonesia; Pacific Bangladesh in Bangladesh; and Warid Telecom in Pakistan.
CONCLUSION
A second source of impact from FDI on the performance of host country industry is that the presence of TNCs generates spillovers to other firms (Caves, 1974). For FDI to occur, all that is required is for TNCs to be more efficient than their indigenous counterparts when operating in the same location. It follows that the ownership advantages of foreign affiliates should lead to relatively higher performance than their indigenous counterparts (Wang et al. 2002). Rapid advances in production technology and technological innovations in communications have allowed companies to "unbundle" the stages of production so that different tasks can be performed in different places (Juthathip, 2007). Soon (1992), Mani (2000) and Lall (2001) explain that Singapore has arguably one of the most well-developed systems of industrial and vocational training that has enabled the rapid transformation of its unskilled workforce into a highly skilled one over a short period of two decades. Multi-national corporations (MNCs) are one way in which knowledge flows can cross international
boundaries and may contribute positively to host countries. For example, Dunning & Lundan (2008) suggest that MNCs create a virtuous circle of technological capability development in host countries. This may be through the transfer of best practice management and production techniques (Florida, 1995), the upgrading of support infrastructure and the stimulation of supply linkages with indigenous businesses (Munday et al 1995). Morgan (1995, p.1-2) concludes that to the extent that technology transfer occurs within the region, FDI certainly has the potential to stimulate growth through its impact on the competitiveness of domestic firms. Research tended to adopt a technology focus on spillovers and concentrated less on knowledge flows whether in terms of pure knowledge spillovers or more formal networks and alliances (Carlson, 2006). The TNC in Southeast Asia lack new products design and R&D capabilities and depend on low end products for their export.
