FREE ESSAY ON THE E-COMMERCE ENVIRONMENT OF SINGAPORE

THE E-COMMERCE ENVIRONMENT OF SINGAPORE

Geography
The Republic of Singapore is located in southeast Asia, south of Malaysia and northwest
of Indonesia. The island measures a total of 637 square kilometers with a coastline 193
kilometers long. Singapore is generally comprised of lowland areas with a central plateau
in the middle of the island. Its elevation ranges from the Bukit Timah, (166 m.), to the
Singapore Strait which is at sea level. Its climate is tropical and wet. Precipitation
occurs on 40% of all days, (70% of days in April). Singapore's two biggest natural
recourses are its fishing industry, and its deep water ports. Singapore is also a focal
point for most Southeast Asian sea routes.
History
Singapore was originally settled by Great Britain in 1819 as a port of call. The British
used Singapore to extend their territories in Indonesia. It remained under British rule
until 1941 when Japan bombed and captured Singapore. After three years of Japanese rule,
British forces returned to the island. By this time Singapore was longing for
self-government. Singapore realized its need for independence in 1959 holding its first
general election. The new, independent Singapore was voted into the United Nations in
1965. On December 22, 1965, Singapore became a republic electing Yusof bin Ishak as its
first president.
Infrastructure
In Singapore's short life as a republic, it has developed a sound infrastructure. In the
way of transportation, Singapore has a total of 105 kilometers of railways used for
commercial and personal transportation. It has also built over 3,000 kilometers of
highways, 2,936 of which are paved. Singapore also boasts a 67 kilometer mass transit
system with 42 stations. The mass transit system is the preferred means of travel in
Singapore due to the fact that only one of every ten people own an automobile. Singapore
produces 28 billion kilowatts of electricity annually. One hundred percent of Singapore's
electricity is produced by means of fossil fuel. An estimated 97% of all residents live
in households with electricity and running water. Singapore's leading industries include:
electronics, petroleum refining, oil drilling equipment, rubber products and rubber
processing, processed food and beverages, ship repair, entrepot trade, biotechnology, and
financial services.
Technological Infrastructure for E-commerce
Singapore has a business environment that is conducive to the support of the E-commerce
environment. The E-commerce environment consists of the physical internet network,
components, and internet services. The environment also includes a collection of supports
and incentives to assist and promote the on-line community.
Internet Awareness and Usage
Approximately Ninety-two percent of adults aged 18 to 55 years old are aware of the
Internet. About one third (32%) of the total population have used the internet. This
gives Singapore roughly 667,000 adult internet users. However, only 13% of internet users
have ever made online purchases. When surveyed only 21% of internet users were aware that
these services existed. The bulk of the population uses the internet primarily for
information searches and electronic mail (38% and 30% respectively) 
Infrastructure Services
In order to develop, E-businesses need an operating environment including network
services, payment services, and trust systems. The information technology industry in
Singapore has been working with the government to develop online payment systems,
security systems, directory services, and other E-commerce services essential to a
developing online industry.
Connectivity
Singapore has a 45 Mbps (Megabytes per second) direct connection the US Internet system.
The Singapore Telecom Internet Exchange (STIX) is an Asian-Pacific Rim internet hub
connecting 15 countries with sub-marine fiber optic cables. The STIX boasts a 34 Mbps
connection and provides high-speed, quality internet service to corporate users and
internet service providers. Other service providers such as Pacific internet and Cyberway
provide a high bandwidth connection to Japan and direct most of the regional internet
traffic.
Laws and Regulations
Pro-business and E-business regulations are vital to the growth of E-commerce. The
government of Singapore has committed itself to creating an on-line environment of
certainty, predictability, and trust so internet companies feel secure in conducting
online business. In 1997 the Evidence Act was amended to include electronic records as
admissible evidence in courts. In July of 1998 the ETA (Electronic Transactions Act) was
created. The ETA provides a legal foundation for collecting electronic signatures. This
provides certainty and validity to contracts formed on-line. Singapore's government has
also taken steps to protect on-line knowledge and intellectual works. As of January of
1999, Singapore's copyright laws have been amended to comply with major IPR regulations
such as the WTO TRIPS agreement, and the Berne Convention. The government has also taken
steps to encourage industry self-regulation in the areas of consumer protection and
privacy.
Internet Identification
The ability to identify and trust parties on the internet is a problem affecting any
internet transaction. Netrust Pte Ltd has been created to solve this problem. Using
digital certificates and signatures, Netrust has formed a digital trust system making
Singapore's internet transactions secure. Companies in Singapore have created several
online payment methods. Consumers can now make online purchases ranging from a few cents
to $500 using a NETS C-ONE prepaid cash card. Companies such as Secure-Sockets Layer
offer encrypted channels for online credit card payments.
Standardization
The government of Singapore is involved in an ongoing effort to standardize services
necessary for E-commerce. The National Information Infrastructure Standards Technical
Committee is researching the areas of networking, information sources and exchange,
security, and electronic mail and directory in an effort to create standards for
E-commerce facilities.
The Future of E-commerce
Economic Situation
Singapore's current economic conditions are conducive to supporting a growing E-commerce
industry. Although the unemployment rate increased slightly (1% increase), Singapore's
Gross Domestic Product rose considerably (5% increase) from 1998 to 1999. While the GDP
has increased, the inflation rate has been negative or zero (-.3 and 0 in 98 and 99
respectively). These factors coupled with a growing exchange rate against neighboring
countries are expected to lead to an increase in total consumption. As internet awareness
and usage increase a higher percentage of the growing consumption of Singapore will
consist of online purchases.
Growing Internet Usage
In 1998 there were only 198,733 internet users in Singapore. It is estimated that by 2001
there will be over 1.3 million users. This spike in internet usage coupled with the
advent of new technology is expected to sharply increase the amount of E-business. In
1998 E-commerce in Singapore accounted for 20 million dollars. This number is expected to
rise to over 855 million by the year 2001.
Attitudes
The primary reason internet usage is currently low is the age of the population in
Singapore. The majority of the residents of Singapore are baby-boomers. This generation
grew up without computer exposure or training. Many of the older citizens don't consider
the internet as a viable source for doing business. However, as the world is doing more
and more business online, attitudes are changing. The government has passed laws
encouraging E-commerce, and the younger generations are recieving more computer
training.
Government and Private Research
The government of Singapore is working hand in hand with information technology firms to
create an environment in which E-commerce will thrive. Currently research is being done
on improving connection speeds, developing new internet security systems, and making
online payments safer and more secure.
New Legislation
Singapore is the first Southeastern Asian country to clearly define the responsibilities
and rights of all parties in E-commerce. Two new bills are expected to be passed this
year. The first bill will allow public sector services to be delivered to consumers
electronically. The second bill, The Computer Misuse Bill, will increase penalties for
hacker attacks and virus activities. Trade and Industry Minister Lee Yock Suan said, A
proper legal and policy framework will enable E-commerce transactions from around the
world to be processed here in a secure and safe manner.
Government Incentives
Singapore has instituted a number of financial incentives for business willing to go
online. These incentives include tax deductions and investment opportunities. The
implementation of these incentives has made it easier for a company to manage the costs
and risks of venturing into E-commerce.
Expanding Connections
Singapore's current US connection of 45 Mbps is growing everyday. Local internet
providers have begun expanding their connection speed and size through the use of
satellite links. It is estimated that in the next ten years the number of internet
connections in Singapore will almost be double what it is today.
Summary
Electronic Commerce is changing the way business is conducted today. Singapore has
positioned itself to become a major part of the E-business trend. Developing technology,
government support, and growing internet awareness make Singapore an ideal environment in
which E-commerce can thrive. Lee Yock Suan sums up Singapore's E-commerce environment by
saying ,We want to be plugged into this global development, and position Singapore as an
international E-commerce hub.
References
WWW.Singstat.gov
202.42.217.232/
WWW.Geography.com.sg
WWW.TheStandard.com
Rajakru, Dang Journal of Contemporary Asia, vol 26, 1996, p. 3-27
The state, family and industrial development: the Singapore case.
Graham, Mark Industry Week, vol 249 no 7, 2000,p. 37-40
Singapore lures technology: it's clean, green -- and a powerful machine.