Towards an Innovation- Driven Economy through Industrial Policy- Making: an Evolutionary Analysis of Singapore

Industrialisation has always constituted a major objective of development strategy and government policy. Through industrialisation, developing nations aspire to achieve higher economic growth, and to eventually attain developed nation status. Yet, it remains doubtful whether the approach of industrial policy-making in developing countries has indeed been successful in transforming their economies. In support of private sector-led industrial development, this paper argues for a primary focus on innovation-driven industrial policy to foster skills upgrading, enhance industrial growth and produce worldclass exports, with lessons drawn from the experience of developed countries. It explains why industrial policy-making must address the pursuit of innovation as a prime mover in economic development to put in perspective the importance of innovation-driven industry policy. To provide evolutionary perspectives of Singapore’s industrialisation process since independence from 1960s to 1990s, it analyses the industrial policy thinking behind the different stages of industrialisation that has helped build the nation to its current state of economic development. It also describes the new wave of Singapore’s industrialisation in support of innovation, as articulated in its Innovation Manifesto. Finally, it concludes with the new challenges of industry policy-making.