The State and Industrial Restructuring: A Comparison of the Aerospace Industry in Indonesia and Singapore

Abstract

The structure df world production and trade changes continuousl5 opening. up'new job opportunities and threatening existing' ones. This process of change causea coneiderable adjustnent problems affecting the lives of milliong of woricers and their familiarf in both industrialised and developing couotriee. trh view of theirrpotenti*lly fatr-reaching . coneeque-ncee these changee need. to $e anelyeed in deipth; ''CriticaL igsues ghould .be identified in time. fire different options (and :their conaequences) open to policymakers And other. codcerned plrties oust a'l.go be examined. These are the princi,pal. coneerrrs of the research rtndertekec by' the ILO!s -Intenrational Diviaioa of Labour Programe...l -In thie situation of constant changer:;'irhere causell ant effects are often hard to reparaEe, it is' aot €asy to guese wtrat the future will brirg. Certain trendg may be diecernible but many unc€,rtaintles,, remain. It is pareicularly important -but often very hsrd -to tbcognise which changea ane cyclical and wtrich structural. To what exEent is unused capacity and rrnanploynent, in:a part:icular indtretry netated to tow overall demand and to wtrat extenE are long-terrr .structural feetors at work? : '" The ilevelopirg countriea*play en important role in the procese qf, atructutal,ehange. 'Their'ahare, of world maitfacturid produetion and. ttede has incneesed in Ehe last fen decailes. Sc-far, nost of this g.r€ateE shane ori.ginates in few countries only (ttp ''' newly indusErialising countries NICa). At firet, , deVeloping countri cxporti tended to be concantrated in industries using little capital and releEively simple technology. Gradually, however, the range of trheir exportg 'expanded and came to include ateel, ships, uachine tools, colour TVs, videotepe recorders, petrochemicalc, arms and aircraft.. :..fn,.nore rec'dnt ,y€r,a'fse protbctiOnisrn aBd the uee of hew tecluotogtes,have tended .to slow dotm tlre advance, of'develbpirg countriea .exports,.,in certain ptoducE areas;' Thia has atlowed'induotrialiced countries to regein ground in some iltiaditionaltr lfidugtries. But lt hel lteo encouteged devalopitrg eountry exporter$ to accelef+te 'thefr.hove intg t"he production and export of nore 'cophietic.tad" producEs. 'A eituation appe€trs to be errergi.rg in which most industrlal goode ueiag'rhatufe technologiee can be produced in a.{arge number of ( industribtised ''aid rlewly r:lndugt-rialieing) countriee. Sectors that uae and g6neratc therve{ lateet techiologies are exceptions.Capital has become increasiagly " lnternationally mobile and tttis hae contributed to an acceleration of strucEural change. It hes also made labour adjustme*ts mor€ difficutt. 'Capital can be moved by telex, but people move morei sl,owly. I.Iorker$ need to ,adjust to, chetrginB,-cirrcumstences, td be traine6 and retrained'. But this takes time. , It is therefore essential thaE the social partoers arrd wdrrkers in parEicul'ar are aware at an early stage of the seqpe and the dofisequenpes of the structural changes taking pl.ace and .

The lion with wings: innovation system dynamics in the aerospace industry of Singapore

“…Attracting foreign investors turned out to be too big of a challenge during the 1970s. According to Hill and Pang (1988), this could be explained by four factors: 1 lack of a regional market for components 2 difficulty in sourcing raw materials 3 lack of a bilateral agreement with a foreign certifying authority (e.g., the Federal Aviation Authority of the USA) 3 4 uncertainty about the availability of skilled labour force.…”

“…Note that it is not possible to provide numbers separately for MRO and production activities, the Association of Aerospace Industry of Singapore estimates that MRO is responsible for 90% of the total output. Source: Singapore Statistics; UNIDO; A-STAR Singapore; Hill and Pang (1988); UN Comtrade; OECD ANBERD Notes: Values are in US dollars at constant 2,000 prices (for value added and gross output figures an industry-of-origin conversion ratio was applied (1.2 SGD/USD), for investment, R&D, export and import figures the official exchange rate 1.72 was used). Note that it is not possible to provide numbers separately for MRO and production activities, the Association of Aerospace Industry of Singapore estimates that MRO is responsible for 90% of the total output.…”

“…Note that it is not possible to provide numbers separately for MRO and production activities, the Association of Aerospace Industry of Singapore estimates that MRO is responsible for 90% of the total output. Source: Singapore Statistics; UNIDO; A-STAR Singapore; Hill and Pang (1988); UN Comtrade; OECD ANBERD…”

The State and Liberalization: The Airline Industry in the East Asian NICs

“…More importantly, their success as globally competitive carriers has been a catalyst for the emergence of new industries in the NICs-especially those related to aircraft maintenance and aircraft-component manufacturing and assembly (Hill and Pang 1988). The industry's traditional role of linking communities within a nation to one another and to cities worldwide has become even more critical with the NICs' integration into the global economy.…”

“…With an ever greater share of the world's air traffic carried by airlines on the Pacific Rim, NIC-based airlines have grown rapidly and created many new, technologically sophisticated jobs. More importantly, their success as globally competitive carriers has been a catalyst for the emergence of new industries in the NICs-especially those related to aircraft maintenance and aircraft-component manufacturing and assembly (Hill and Pang 1988).…”