Central Midori's Technology Blog

Why Southeast Asia Is The New Frontier For Global Manufacturing

This is part 1 of 2 on southeast Asia (specifically Singapore) and its role in today's global economy.

Ask the average westerner where Singapore is located and there's a good chance they'd reply, "Uh, in China"?

No, Singapore is not in China.

Singapore is a tiny island-city state located on the southern tip of the Malaysian peninsula. Independent since 1965, Singapore is an unimaginable success story. Although lacking in natural resources, the country was turned around in 50 years from a sleepy fishing village into a vibrant, multicultural, highly educated city.

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The island is located in the middle of southeast Asia, 150 km from the equator. Southeast Asia is comprised of eleven countries situated south of China and east of India. What is called “mainland” are the countries on the Asian continent: Burma, Thailand, Laos, Cambodia and Vietnam. The “islands” include Malaysia, Singapore, Indonesia, the Philippines and Brunei. As opposed to the more monocultural countries in northern Asia (Japan, China, South and North Korea) Southeast Asia is a very diverse and multicultural region.

From a political standpoint Southeast Asia is organized into an Association of Nations called ASEAN, which was established in 1967 with a mission to promote economic development throughout the region.

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Southeast Asia initially attracted Chinese merchants and then in the 15th Century onwards, Italians sailors followed by the Portuguese and Spanish, who found a very hospitable stop on their way to China. Southeast Asia became a trading link between the eastern civilizations (China and Japan) and the West. After the opening of the Suez canal the main route moved north to the strait of Malacca through Penang, Malacca and Singapore, establishing these cities as important trading posts.

In a time of trade tensions between China and the USA a lot of companies are now exploring Southeast Asia as an alternative to China. SEA represents close to 600 million people, behind only China and India as the largest labor force in the world.

More phones are now made in Vietnam (thanks to Samsung) than in China.

Singapore, being so close to the equator and shielded by large landmasses to its north and south, enjoys one of the best weather and climate conditions in the world. There are no typhoons, no earthquakes and no tsunamis, with temperatures hovering between 25 and 35 degree celsius year round with frequent but brief thunderstorms.

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The airport is open 24/7 and you can travel everywhere in Asia for less than $300. If you travel to Changi airport you will notice a massive construction site to the east. By 2030 Changi Airport will have almost doubled in size, making it one of the largest aviation hub for regional and global traffic in the world.

On our next post, we'll examine the cultural reasons behind Singapore's incredible growth.