A Brave New Economy For Singapore

When Singapore's state-controlled press recently extolled the merits of becoming a street cleaner, Toh Mun Heng figured it could mean only one thing: The government was preparing the island for a seismic change in industrial policy that would embrace the New Economy--and render hundreds of thousands of uneducated factory workers jobless. "You can fight the market for a short while," says Toh, who teaches business policy at the National University of Singapore. "But not in the long term."

For years, Singapore used subsidies and microplanning to ensure that 25% of its gross domestic product came from manufacturing. Besides providing a foundation for rapid economic growth, the policy also served a critical social purpose: In a country with no safety net to speak of, it employed the 38% of the workforce that never finished high school. But now, Singapore wants to swap such manufacturing sectors as disk-drive and printer assembly for "knowledge industries" like life sciences, biotech, and e-commerce.