Sources of Competitive Advantage of a Small Open Economy in the Era of Global Interconnections – Singapore in the Years 2007–2012
DOI:
https://doi.org/10.15678/ZNUEK.2015.0945.0904Keywords:
national competitiveness, small open economy, globalisation, generalised double diamond of competitive advantageAbstract
Assuming that the competitive advantage of a small open economy does not have to rely solely on favourable domestic conditions, but can be generated as a result of its inclusion in the network of international connections, the article investigates the role of international economic interdependencies in shaping the long-term competitiveness of Singapore. An attempt has been made to determine whether internationalisation remains the main driving force for Singapore’s economy, or whether together with socio-economic development, the country has expanded its domestic competitive potential. In order to show the impact of the financial and economic crisis on the changes to domestic sources of Singapore’s competitive advantage, the study was conducted for the period 2007–2012, employing a generalised double diamond model.
In light of the results of the analysis, it was found that thanks to the precisely executed strategy of strong international integration, a small economy has a chance to overcome its natural development constraints. However, it has to be stressed that in order to remain on the growth path, it is necessary for a strongly globalised economy to gradually expand the domestic pillars of national competitiveness, mainly by improving efficiency and stimulating innovation. These changes additionally enhance national long-term competitiveness by increasing the attractiveness of the location for inflows of high-tech foreign direct investment.
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