Global Manufacturing and Local Linkage in Singapore

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Abstract
New approaches to the management of subcontracting relations are interpreted as indicating a shift from adversarial to cooperative linkages. This shift is thought to encourage greater use of external suppliers and to encourage localisation of buyers and suppliers. These propositions are examined through a case study of linkage development in Singapore, a major centre of multinational manufacturing activity. The case study draws on evidence from a sample of participants in a scheme promoted by Singapore's Economic Development Board known as the Local Industry Upgrading Programme (LIUP), which has aimed to promote linkage development. The paper reports two surveys of participants in LIUP: (1) a postal survey of buyers (mainly made up of foreign multinationals as well as a few Singapore organisations) and subcontractors; and (2) a personal interview survey with representatives of twenty-two buyer organisations. The analysis, partly presented through brief case studies of individual organisations, shows how variable strategies affecting subcontracting linkages are evolving. Increased information flows between firms are found to be well established but a low priority to linkage localisation is discovered. These findings are interpreted in terms of MNC (multinational corporation) strategies to retain flexibility in subcontractor selection and their increased capabilities to manage spatially dispersed supply linkages.