2. Presentation Agenda
The team will present the way forward for Panacea
Introduction
• Executive Summary
• Key Objectives
Next Steps
• ESS Framework
• Education & Industrialisation
• SOE Development
• SME Creation
Conclusion
• Summary of Recommendations
• Implementation Timeline
• Appendix
3. Executive Summary
I. We should focus on training and developing its
labor first before focusing on services
II. State-owned enterprises are developed to
accelerate industrialization in three identified
industries and to reduce reliance on FDI
III. As the labor force becomes increasingly skilled and
educated, we will start to focus on services and foster
innovation through providing avenues for local
entrepreneurship
4. Key Challenges
Panacea faces key challenges in meeting its targets
Key Challenges
Current Situation 2030 Targets
• Contributions of • Contributions of services
Lack of skilled
services to GDP – to GDP - 70%
labour
25%
• Exports of services to
• Exports of high-tech Lack of 25% of overall exports
products & services entrepreneurship
- 20.2% spirit and • TFP to have increased by
innovation 5% every decade
• Limited success of
initiatives launched • Development of key
by various Inadequate soft sectors in manufacturing
ministries infrastructure and services
5. Assessing Targets
Panacea should reassess its targets
Both ways of reaching the target are unsustainable
Dramatic increase • Unsustainable growth
Share of Share of in low value-added
in services
services to services to services
GDP: GDP:
25% Downsizing non- 70% • Removal of agricultural
related sectors & manufacturing
sectors
Initial Projections Selected Asian Economies (Services as % of GDP)
Annual GDP
growth of
approx. 6%
12.7% annual
growth in GDP
of services
1980 2010
5
6. ESS Framework 2013
The team recommends a holistic progressive framework approach which aims to build the
foundation, drive growth, and sustain results
Justifications
Key Challenges Sustaining SME - Sustaining innovations with less
Results state funding
Creation
- Increasing TFP through R&D
Lack of funding
skilled labour
Lack of - Develop indigenous
Driving SOE capability in key
entrepreneurs Growth
Development industries
hip spirit and
innovation - Reduced reliance on FDI
Inadequate
Foundation - Laying foundations
soft for growth and
infrastructure Building Education & innovation
Industrialisation - Concentrate
industry synergies
7. Recommendations
Laying the foundations for a skilled and
innovative workforce
Education &
Industrialisation Concentrating labor force through
manufacturing centers to gain technical expertise
Undertaking long-term investments which the
private sectors will not undertake
SOE Development
Accelerating developments into industries with
high growth potential
Fostering sustainable local innovations and
entrepreneurship
SME Creation
Moving into high value-added service industries
whilst leveraging on skilled workforce
8. Education & Industralisation
Rationale
Universities
with more Promotes logical and systematical
emphasis on thinking for problem solving and
engineering,
science, coding innovation
Breaks down language barriers
Primary schools
All lessons to be
in rural areas
taught in
with focus on
English
Provides impetus for research and
Science & Math
innovation
Education Grooming the future leaders of
Panacea
Shifts the labour force to higher
value-adding industries by
Government-led
research
Overseas equipping technical skills
Scholarships
laboratories
9. Education & Industralisation
Rationale
Partnerships
with industry Achieve cluster synergy with
experts and proximity to research institutes and
co-location of universities
universities
Assimilate the required technological
expertise and manpower
Joint-venture
Industrial
with foreign
policies
companies
Lower cost, faster start-ups, reduced
cost of operations
Industrialisation
Provide motivation for citizens to
move into cities
Nudge economy up the value chain,
Focus on ICT
and Infrastructure and a services-driven one
professional development
services
10. Recommendations
Laying the foundations for a skilled and
innovative workforce
Education &
Industrialisation Concentrating labor force through
manufacturing centers to gain technical expertise
Undertaking long-term investments which the
private sectors will not undertake
SOE Development
Accelerating developments into industries with
high growth potential
Fostering sustainable local innovations and
entrepreneurship
SME Creation
Moving into high value-added service industries
whilst leveraging on skilled workforce
11. SOE Development
Rationale
Independent
supervisory Reduce agency costs
boards
To reiterate privatization pressures
Higher overseas market potential
CEO-
Export- Internationalisation
sponsored
orientated
management
focus Easier comparison for international KPIs
teams
SOE
Focus on high potential areas
Development
Emphasize urgency and prevent
bureaucratic inertia
Leverage upon expertise acquired
from clusters
Grants given Focus on Undertake local ICT infrastructure
for R&D ICT and development
efforts electronics
Move towards services economy
12. Recommendations
Laying the foundations for a skilled and
innovative workforce
Education &
Industrialisation Concentrating labor force through
manufacturing centers to gain technical expertise
Undertaking long-term investments which the
private sectors will not undertake
SOE Development
Accelerating developments into industries with
high growth potential
Fostering sustainable local innovations and
entrepreneurship
SME Creation
Moving into high value-added service industries
whilst leveraging on skilled workforce
13. SME Creation
Rationale
Grants given
for R&D
efforts and Promote indigenous TFP growth
services
Move towards services economy
Creates risk-embracing culture
Matches ideas, entrepreneurs and
Enforcement funds together
and
monitoring of
SME Ideas Provides a market of meeting
Marketplace suppliers and customers for ideas
IP and
investor laws
Creation
Promotes R&D efforts as it promises
adequate rewards for effort
Safeguard interests of investors
Attract
alternative Reduce burden on state funding
funding
mechanisms
Tap on expertise of venture capitalists
14. Establishment of Neo-Panacea
Development Council (NPDC)
Neo-Panacea Development Council (NPDC)
Chairman Cabinet Secretary
Members
Minister of Commerce Minister of Public Works
Minister of Education Minister of Trade & Investment
Planning Level
Minister of Labor Ministry of Finance
Minister of Social and Welfare Industry Leaders
(5 CEOs from targeted
industries)
Mayor for Minas Tirith Mayor for Gondolin
Rationale Implementation Monitoring
• Gather feedback on
• No conflict of interest • Streamline KPI
results
• Reduce excessive • One-stop centre for
• Yearly performance
bureaucracy business permits
review
• Gain commitment to ESS • Connection to high-
• Bonuses contingent on
Framework speed ICT infrastructure
performance
15. Risk Mitigation
Risks Mitigation
Inculcate and encourage informal networks to actualise benefits of
Lack of companies
industry clusters
in industry
Establish a cluster management body to increase marketing efforts and
clusters
increase awareness of clusters
Establishment of an advisory committee to provide expertise for SOE
Failure of SOE Reduce hierarchical levels and bureaucratic inertia through micro-
corporate management from CEO-managed teams
performance Goods to be exported for objective comparison of financial results
Entrench positive network effects of home clusters
Competition from Consider collaborative efforts in sector specialisation
other countries
16. Funding Mechanism
Breakdown of Total Spending (in
Public Funding Private Funding Million US$)
Means Means Public Private
6%
25%
Corporate and income
Infrastructure bonds
tax
Social impact bonds 94%
Import duties
Venture capitalists 75%
Sovereign funds
Private Equity
investments
2013-2020 2020 - 2030
Funding volumes (in
2013 2020 2025 2030
US$ million)
Public 3,604 3,935 4,287 5,111
Private 100 420 1,450 1,550
Total Funding 3,704 4,355 5,737 6,661
17. Panacea in 2030
Vision of ESS Framework Projected GDP Split
A conductive and risk-embracing Agriculture Primary Secondary Services Others
culture and environment for local
5% 4% 3%
entrepreneurship
25% 31% 41%
15%
New challengers in the global 24%
marketplace 30% 28%
23%
18%
25% 18% 9%
Highly educated
workforce with a strong 2013 2020F 2030F
foundation in Science and
Math.
Key Performance Indicators 2011 2020 (Est.) 2030 (Est.) Key Performance Indicators 2011 2020 (Est.) 2030 (Est.)
SME Indicators Economic Indicators
SME Contribution to GDP (%) 36.2 38 45 GDP growth (%) 4.5 5.5 6.5
TFP growth (annual %) N.A. 5.0 5.5
Social Indicators
Innovation Indicators
Population below poverty line 28.9 25 20
Exports of High-tech Products (%
Budget Indicators 20.2 23 36
of total exports)
Budget Surplus 6.2 3.5 4.0 R&D Spending (% of GDP) 1.6 1.8 2.2
18. Panacea in 2030
Vision of ESS Framework Projected GDP Split
A conductive and risk-embracing Agriculture Primary Secondary Services Others
culture and environment for local
5% 4% 3%
entrepreneurship
25% 31% 41%
15%
New challengers in the global 24%
marketplace 30% 28%
23%
18%
25% 18% 9%
Highly educated
workforce with a strong 2013 2020F 2030F
foundation in Science and
Math.
Key Performance Indicators 2011 2020 (Est.) 2030 (Est.) Key Performance Indicators 2011 2020 (Est.) 2030 (Est.)
SME Indicators Economic Indicators
SME Contribution to GDP (%) 36.2 38 45 GDP growth (%) 4.5 5.5 6.5
TFP growth (annual %) N.A. 5.0 5.5
Social Indicators
Innovation Indicators
Population below poverty line 28.9 25 20
Exports of High-tech Products (%
Budget Indicators 20.2 23 36
of total exports)
Budget Surplus 6.2 3.5 4.0 R&D Spending (% of GDP) 1.6 1.8 2.2
20. Key Indicator Comparable
Indicator Value Comparable Country
Area 2,220,760 sq. km Mexico
GDP, current (US$) US$ 728.3 billion (2011) Turkey
GDP per Capita US$ 1047.46 (2011) Kyrgyzstan
Public Debt: 49.5% of GDP Philippines
SME Contribution to 36.2% of GDP
GDP
Population 695.3 million 3rd in the world
Net Migration Rate -0.05 migrant per 1000 India
population
Literacy Rate 76.8 of total population Belize
Population below 28.9% (2010) Sri Lanka
poverty line
Distribution of income 40.1 GINI coefficient Russia
21. Increased Education Spending in Panacea
Financial Support for Education
(2013-2030)
(in million US$)
Student Bursaries Student Scholarships
3,400
2,400
1,000 850
600
50 200 250
2013 2018 2025 2030
Additional Cumulative Construction (2013-2030)
Major focus point for S&T universities
University Vocational Schools* Primary Schools
850
Key Risks & Mitigations
600
Type of Risk Risk Probability Mitigation
Lack of vocational Low Overseas tie-up 250
teachers 120 150 170
84
50 40 50
Low enrollments High Financial bursaries 7 10
and scholarships
2013 2018 2025 2030
*Does not include 24 vocational schools planned
22. Funding Mechanism and Return (Education)
Breakdown of Educational
Funding Funding
Initiative Cost* (first 10 (next 10 Remarks Spending (in Million US$)
years) years)
Federal State Private
150 schools in 20
Universities 0
$1,500 Federal Federal years, $200
Construction 21%
million per school 36%
Top 1% (500,000 27%
Student Bursaries $ 50 State - students), $100
each 64% 52%
Primary School 50 schools per
Construction $ 200 State State year, $4 million
(rural) per school 2013 - 2020 2020 - 2030
10 schools per
Vocational
$ 750 Federal Private year, $50 million Key Performance
Schools
per school Indicators 2013 2020 2030
7.5 schools built
Additional
on average per
funding for $ 800 State State Literacy Rate (%) 76.8 82 93
year, $100 million
universities
per school
Universities (#) N.A. 20 70
1,000 students,
Student Public – Vocational Schools (#) N.A. 60 100
$ 200 State $0.2 million per
Scholarships Private
student
School Enrolment, N.A 10 18
Total $ 3,500 Annually (2013 price level) Tertiary (% of
population of age
* In millions annually (USD) Government-led N.A 8 20
research laboratories
23. Manufacturing clusters (HIDE Zones) to
be developed
Partnership
• Focusing on
with Infra-structure electronics and
industry &
Academia
Development automotive parts
• Availability of low-
Panacea
cost labor
Industry
Cluster
• Geographical
proximity to high-
JV with
tech manufacturing
Industrial
Policies
foreign countries
companies
24. Why investment into ICT,
Electronics, and Automotive?
ICT Electronics Automotive
• ICT-driven innovation • Growth in electronics • CAGR of 5.5% for
could contribute about goes in-tandem with vehicle assembly
one third of GDP ICT growth (2010-2017)1
Growth1. • The competitive • 83% growth will be
• ICT investment drives nature in this industry contributed by
productivity growth in requires companies to emerging markets1
the economy1. continuously develop • Automotive industry
• Continuous growth. innovations represents 8.5% of
Projected to reach US • Global gadgets total value-added
$4 T globally by 20152. spending to reach $1 T generated by
in 20131 manufacturing in
Europe (High Value-
add to GDP)2
1 International Institute of 1 PWC Auto Report 1 PWC Auto Report
Communications 2 Global Edge Report 2 Alphametrics Auto Employment
2 Gartner Report
25. Major Phases in Industry Clusters
• HIDE Zone recognized as • HIDE Zone recognized as
emerging world class a world class industry
industry cluster cluster
• HIDE Zone recognized as •
• Cluster effects take over World-leading innovation
an emerging cluster flourishing in HIDE Zone
to attract activities into
• Measurable increase in • HIDE Zone becomes a
HIDE Zone
collaboration and
• Innovation starts to take pillar in big company
technology transfer global R&D network
place in HIDE Zone
2013 2015 2020 2030
Phase I (2013-2015) Phase II (2015-2020) Phase III (2020-2030)
• Generate awareness, build • Nurture existing companies • Identify next wave of
linkage in the clusters emerging technology in
• Improve regulatory • Improve funding cluster
environment in IPR • Solidify Panacea’s leading
mechanism for established
• Create funding mechanism to
companies position in selected industry
develop successful home-
grown companies • IPO, M&A, cross- clusters
• Create organization to border transactions
accelerate cluster development
and attract activities into
clusters
26. Cluster Development Initiatives
Industrial Policies
• Attractive tax structure and reduced customs duties
• Tax holidays for setting up in industry clusters
• Further subsidies and supports for local JVs
• Interest subsidies for purchase of capital goods
Promote partnership with industry & academia
• Industry & University cooperative research centers
• Co-funding industry and university R&D projects
• Develop training programs for the industry
Infrastructure Development
• Western Corridor of Panacea to be developed
• Increased infrastructure investment in the clusters
27. Risks and Mitigations to Cluster
Development
Risks Mitigants
Cluster management body is
Clusters not sustainable established to ensure the progress
in the future Manage network openness to
business outside the cluster
Lack of stakeholders facilitating strong inter-
in clusters organisational relationships within
the cluster
Lack of R&D Enhance investments in R&D by
Expertise facilitating overseas tie-ups
29. Infrastructure bonds
Targets overseas investors seeking:
1. New financial product for
diversification
2. Safe returns, with excess returns
dependent on usage of public
utility
Infrastructure funded includes:
1. Roads (roadtoll booths)
2. Power plants
3. Water treatment plant
4. Airports (airport tax)
5. Ports (port services tax)
Pricing depends on product mix and
type of bond, and whether payout is
contingent on social impact reached.
Objective reporting of KPI is vital.
30. KPI for Cluster Development
Key Performance 2013 2020 2030 Total Capital Goods Stock ( for one cluster)
Indicators
FDI Local JV
Total SEZ (#) 7 12 17 3000.00
Joint Ventures (#) N.A. 200 850 2000.00
1000.00
Unemployment 8.3 8.0 6.5
(%) 0.00
Urbanization (%) 35.2 40 48 2013 2016 2019 2022 2025 2028
Benefits of Industry Cluster
Export
value 200 300 600 1,200 2,400 4,000 4,500 7,800 9,900 12,000 15,000 17,500 19,000 20,000
Value
add to
GDP 4 6 12 24 48 200 225 390 495 600 750 875 950 1,000
Import
Value 196 294 588 1,176 2,352 3,800 4,275 7,410 9,405 11,400 14,250 16,625 18,050 19,000
31. Agent of growth
FDI SOE SME
Pros:
Pros: Cons:
1. Strategic
1. Quick transfer 1. May be
Cons: industry
of technology manipulated to
1. Over-reliance of development
and expertise fulfill selfish
GDP on FDI to fill demand
2. Low costs to political goals
2. Loss of national not met by
government 2. Inefficiencies
sovereignty private sector
3. Transfer more and slackness of
3. Diversion of local 2. Easy to form
different government
talents to MNCs and effect
(optimal) bureaucracy
with higher pay changes
management 3. No expertise or
3. Fully
organisational technology
internalised
methods
profits
• ICT is a key strategic industry that should be internalised.
• Expertise to be obtained from scholars and JVs
• Transparent boards coupled with privatisation pressures
32. Agent of growth
FDI SOE SME
Pros:
Pros:
1. Strategic Cons: Cons:
1. Long-term
industry 1. 1. May be 1. Small in scale
sustainable
development manipulated to and limited
innovations
to fill demand fulfill selfish resources
2. Constant
not met by political goals 2. Failure rate is
competitive
private sector 2. Inefficiencies high
pressures
2. Easy to form and slackness of 3. Difficult to
3. No agency
and effect government dominate in
costs
changes bureaucracy overseas
4. Generates
3. Fully 3. No expertise or markets
more
internalised technology
employment
profits
• ICT is a key strategic industry that requires economies of scale
• Mandate of government to shift to sustainable innovation and driven by
services sector
33. SOE Development
Clear Rationale
Increased
financial transparen
targets Pursue active participation in focus
cy
industries to catalyze the
industrialization process and develop
indigenous capability
Key Characteristics
State- • No state interference or favors
owned • Expected to be efficient and
Enterprises profitable with clear financial
targets
• Export orientation ensures
Free from learning the best technology
Export-
political
oriented
overseas
interferenc
focus • No protection in domestic market
e
after 5 years
34. Major Phases in SOE Development
• SOE recognized as a
emerging world-class
company
• SOE starts to have
• SOE develops its core
innovation on its own
competitive strength • SOE starts to attract private • SOE is seen less
• SOE produced the first capital government-linked (50-
product or services by first • SOE starts to develop 50%)
phase innovation
Domestic Export-focused Building competencies
Nurturing
2018 2023 2027 2030 and beyond
Phase I (2018-2023) Phase II (2015-2020) Phase III (2020-2030)
• Start recruitment of expertise • SOE starts developing • SOE starts developing more
for SOE products for export highly sophisticated products
• Injection of working capital • Gradual privatization • SOE invites more capital
• Purchase of capital goods • IPO, stake sell injection from private sectors
• First production starts • Continuously develop • SOE starts to develop
• Source of innovation: innovations proprietary technology
• Indigenously developed
• Licensing
35. Funding Mechanism (SOE)
SOE Funding
Source
Capital Goods Working R&D Grant
Capital
50% Co-Funding
50% Co-Funding
Public Guaranteed Public Funding Private Funding
Loan
Foreign technologies
• Public capital Injection follows VC funding structure and are
conducted in stages. SOEs are eligible for further capital
injection after fulfilling certain requirements
Foreign Loans Local Banks • This measure reduces risk for the government
Year 1 2 3 4 5 6 7 8 9 10 11 12 Remarks
SOE Establishment 40 80 120 200 160 120 80 40 0 0 0 0 $20m/ capital injection
15 % stake per
SOE Privatization -15 -15 -15 -15 -15 -15 -15 -15 privatization
R&D Grants 5 5 5 5 5 10 10 10 $ 5m/ research grant
Total Govt Outlay 40 80 120 200 150 110 70 30 -10 -5 -5 -5
ICT infrastructure $300 m/ year after 5th
development 10 20 100 200 250 300 300 300 300 300 300 300 year
Total Private Outlay 10 20 100 200 250 300 300 300 300 300 300 300
36. KPI for SOE Development
Changes in Ownership Structure
Key Performance 2013 2020 2030 Private Source Public Source
Indicators
State-owned enterprise NA 4 10
(#)
45
Broadband Penetration 20.3 25 50 55
(>256kbps) (%) 70
85
100
Mobile Penetration (%) 78.5 82 95
55
Exports of High 20.2 23 40 45
Technology Products & 30
Services (% of total 15
exports) 0
Year 1 Year 6 Year 12 Year 18 Year 24
37. Tax incentives to incentivize R&D activities
Examples from other country Proposed Possibilities for
Panacea
• Equipment related to high-tech R&D: • In accelerated depreciation cycle for R&D
Accelerated • In US, R&D related equipment can be related investment
fully depreciated in 3 year, software in 2 • Equipment fully depreciated in 3 years
Depreciation
years • Software in 2 years
• Singapore and Korea allow 50% • Up to 50% depreciation in first year
depreciation of R&D equipment in first
year
R&D Expense • In Korea, foreign experts who work in domestic • Allow life sciences companies carry over their
companies and government entities are entitled loss due to R&D investment t off-set future
Carry- Over
to exemption of personal income tax profit
• In Korea, companies can withhold 3%-5% of
R&D Expense Off- • Allow certain percentage of R&D expense
sales before tax for R&D purpose
set Profit Tax directly off-set profit tax
• Direct R&D expense off-set: Singapore -100%
• In US, 65% of R&D expense on contract
Contract Research research with university and non-profit • Implement similar incentives in Panacea
Off-set Profit Tax institutions can be off-set in profit tax
• In Korea, foreign experts who work in domestic
Personal Income
companies and government entities are entitled • Implement similar incentives in Panacea
Tax Incentive
to exemption of personal income tax
38. Seed Funding Mechanism
Forming the
deal Post Scout for
Collateral investors
SM Seed Financing with higher Venture
E risk appetite Capitalist
Initiative
Seed Seed
Funding Funding
Payout
Payout if SME
successful
SM Seed Financing Venture
E Initiative Capitalist
Expertise given
39. Major Phases in SME Creation
• KCC recognized as a centre
• KCC recognized as the latest of mass idea
city of indigenous innovations commercialisation and
• Cluster effects take over in industry consolidation
• KCC recognized as an
knowledge • SMEs to increase
emerging cluster
assimilation, allowing for contribution to GDP
• Measurable increase in
collaborations and mergers through international
marketing Panacea to the
across SMEs operations
world
Laying Initialising Driving Forward
Foundations
2019 2020 Growth 2025 2030
Phase I (2019 - 2020) Phase II (2021-2025) Phase III (2026-2030)
• Improve regulatory • Launch of initiatives to attract • Review performance of SMEs
environment in terms of entrepreneurs under seed financing
IPR • Ideas Marketplace • Launch of the Market
• Establish Seed Financing • R&D Grants Assistance Grant for
Initiative (SFI) to attract • Co-funding Schemes (for internationalisation of SME
overseas venture capitalists ideas scalability) Operations
• Initial promotion of KCC in • Key focus is on high value-added • Consolidate knowledge
Minas Tirith with services such as professional assimilation by connecting
construction of basic services, healthcare, tourism SMEs to university research
infrastructure institutions
40. SME Creation Initiatives
Ideas Marketplace
Key Performance 2013 2020 2030
• Free platform for meeting place of ideas, people, funds Indicators
• Counterparty to be found after agreement of non-divulgence
of ideas
SME Contribution to GDP 36.2 37 45
(%)
• Technical advice to be given for each starting SME
Spending on R&D (% of 1.6 2.0 3.5
Market Assistance Grant GDP)
• Internationalisation of SME operations Services % of GDP 25 27 32
• Provides capital, connections and capability for SMEs
Patent Granted by US (per N.A 500 3000
• Training programmes to understand cultural differences year)
Seed Financing Initiative KCC Parks/Clusters N.A. 2 4
• Actively match investors’ targets with suitable SME
• Government to serve as counterparty to give assurance to
foreign investors in return for entrepreneurs’ collateral
Year 1 2 3 4 5 6 7 8 9 10 11 12 Remarks
Infrastructure 100 100 100 100 0 0 0 100 100 100 100
R&D grants 50 50 50 50 50 60 60 60 60 60 $300k each, 200 SMEs
Co-funding scheme 100 100 100 100 100 100 100 100 100 100 $500k each, 200 SMEs
Market Assistance
Grant 100 100 100 100 100 $100k each, 1000 SMEs
Total Cash Outlay 0 0 150 150 150 150 150 260 260 260 260 260
*in millions USD
41. Types of Risk
Risks Mitigations
Create informal networks for synergy generation,
Lack of companies in clusters
POLICY RISK
establish cluster management body
Multi-tiered privatisation targets, transparent reporting
Breakdown of control mechanism to independent board
Advisory committee established for consulting
Failure of SOE corporate performance
purposes from the onset
Establish a IPR Task Force to issue and enforce
Widespread imitations patents
MACRO RISK
Reduce price of Panacian goods, and give tax
Eurozone collapses due to Greek exit
breaks to local exporters to Europe
Increase in oil prices due to armed violence in Increase fiscal budget, and slow down pace of
Middle East ESS framework execution
Move to higher value-added industries where
Emergence of low cost centers (e.g. Myanmar)
their competitive advantage is reduced
42. Risks Mitigations
INDUSTRIALISATION
Lack of Vocational Teachers Attach more industry tie-ups with overseas MNCs
Financial bursaries (primary/secondary) and
Low enrolment in schools
EDUCATION
scholarships (university)
Create informal networks for synergy generation,
Lack of shareholders in clusters establish cluster management body
Set up Board of Investments to encourage joint ventures
Lack of technical expertise / Attract industries requiring lower-end skills
Multi-tiered privatisation targets, transparent
Breakdown of control mechanism
DEVELOPMENT
reporting to independent board
Advisory committee established for consulting
Failure of SOE corporate performance
purposes from the onset
SOE
Expand outreach of investors to more regions,
Failure to find buyers during IPO slow down company privatisation if required
Set up a talent recruitment centre, engage
Lack of capable CEOs local scholars and talented entrepreneurs
Lack of foreign capital funding Establish an efficient financial capital
CREATION
market
SME
Marketing campaign to encourage
Lack of entrepreneurs entrepreneurship spirit and risk taking
Establish a IPR Task Force to issue and
Widespread imitations
enforce patents
43. Dimensions of KPI
Key Performance Indicators 2011 2020 (Est.) 2030 (Est.)
Key Performance Indicators 2011 2020 (Est.) 2030 (Est.) Economic Indicators
GDP per capita, current (US$) 728.3 1384 2598
SME Indicators
GDP growth (%) 4.5 5.5 6.5
SME Contribution to GDP (%) 36.2 38 45 Unemployment (% of population) 8.3 7.5 6.8
TFP growth (annual %) N.A. 5.0 5.5
FDI net inflow (% of GDP) 1.8 1.9 2.0
Social Indicators
Patents granted by US patent Population below poverty line 28.9 25 20
N.A. 1,000 4,000
office annually
Gini Index 40.1 39 36
Budget Indicators Literacy Level (% of population) 76.8 82 93
Innovation Indicators
Budget Surplus 6.2 3.5 4.0 Exports of High-tech Products (%
20.2 23 36
of total exports)
R&D Spending (% of GDP) 1.6 1.8 2.2
45. Knowledge Services Clusters
• Focus on:
o ICT services and Professional services
• Rationale:
o Availability of lower-cost skills
o Skilled workforce and proficient in english
• Trend:
o Increasingly commoditized knowledge services
• Examples:
o Software development
o Engineering support
o Analytical services