CS Market Research Singapore and Executive Education

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					                               CS Market Research
                         Singapore and Executive Education

Summary

Singapore relies heavily on human resources and manpower and must continue to produce high-end
citizens and knowledgeable employees in order to remain a competitive economy. Lacking natural
resources the nation-state has a largely executive population in the service industry. Implementing
executive education for their employees can boost Singapore’s competition with emerging
economies by keeping employee skills and knowledge up to par with the global market.

Singapore already has a strong relationship with the United States and reveres learning from the
colleges and universities of the U.S. Therefore, the prospects of U.S. education programs entering
the market are high and probable. The Government of Singapore (GOS) is also willing to invest in
education systems to maintain the city-nation as a competitor and an educational hub. In
combination, the market for executive education is relatively open with little or no barriers to entry.
Competition remains low as well because of Singapore’s keen interest in learning from the United
States. American institutions can prosper from entering into this market considering the concept of
executive education and the support in Singapore for its development.

Market Overview

Singapore is a service sector economy; the island nation relies on human capital to develop their
economic success (Ministry of Manpower). Continued success is dependent upon how well the
workforce performs in their respective occupations. Therefore it is essential that Singapore maintain
a work force with high standards by developing their knowledge and skills throughout their career.
The knowledge-based economy can employ executive education to remain competitive, and the
market for executive education is already conducive to new institutions considering expansion into
the region.

The current market for executive education and training programs is relatively new in Singapore,
which includes a couple of local business schools and American schools establishing programs here
in the past 5 years. Schools in Singapore are local, foreign and American institutions each providing
courses at local facilities and institutions. Some of Singapore’s universities have also teamed up
with some of the top U.S. universities to create higher education programs, which allow
Singaporeans to receive the education and training from a U.S. school without leaving their home
environment.

Singapore schools with programs or alliances include the Singapore Institute of Management,
Singapore Management University, Singapore Polytechnic, National University of Singapore,
Occupational Study and Health (Training and Promotion) Center, and the Singapore Human
Resource Institute.

American schools that are already present in Singapore include: Wharton Business School, Stanford
University, University of Michigan, Johns Hopkins, University of Chicago Graduate School of
Business, Georgia Institute of Technology and Dale Carnegie, and American Society of Training
and Development (U.S.F.C.). However, the need for executive education in thish vast service
directed economy present a strong potential for more American schools to enter the market.

More companies today are increasing their use of executive education. Schools and institutions
must decide which group they should cater to for executive education programs: small and medium
enterprises (SMEs), government linked companies (GLCs), or multinational corporations (MNCs).
In each respective group, U.S. institutions can target their programs towards what is required


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although most of these companies are either large corporations with over 500 employees or
multinational corporations (MNCs) located in Singapore.

The demand for executive training from SMEs is not very strong. While various factors may
account into their reasoning for not utilizing such programs, schools should aim at persuading these
companies to utilize and implement the use of external sources and outside institutions to further
train their employees. MNCs and larger organizations, including GLCs (70 percent of the
companies in Singapore) are the main users of American educational programs. However, in order
to expand into the market, all areas must be covered. Looking at the following trends, it can be
ascertained where U.S. education programs should target their focus.

Market Trends

Singapore’s current education market appears to have been stable for the past few years. The most
evident change occurred through the increasing number of institutions using Singapore as an
education hub. New and recent developments result in more competition, making it more difficult
to differentiate one program from another. Nevertheless the GOS continues to support it, which
means it will be easy for institutions to enter the market for the foreseeable future.

Another aspect is the possible discontinuation of companies to use in-house training. Because of
high costs in Singapore, companies are not willing to invest in creating a permanent training center.
Therefore, U.S. institutions can take advantage of this by setting up executive education programs
for such companies to utilize. U.S. institutions can also set up partnerships with various
organizations already based in Singapore to host their training programs and facilities here.

Based on a survey distributed to several Singaporean companies, many heads of Human Resources
agree that “executive education [would] greatly improve productivity and/or benefit the company.”
A local company specifically reported a “strong need [for an] executive program as the company
needs to develop their talents and arm them [selves] with necessary core competencies that [are]
required for business.”

Table 1: Survey Questionnaire Distributed to Singaporean Companies
       Strongly Disagree Somewhat Disagree Neither Agree or Disagree Somewhat Agree Strongly Agree
Q.1*          0%               0%                    19%                 50%             31%
Q.2           0%              19%                    25%                 44%             13%
Q.3           6%               6%                    44%                 31%             13%
Q.4           0%               0%                     6%                 63%             31%
*Q.1: Executive education will greatly improve productivity and/or benefit the company.
Q.2: The effects of an executive education program would be/are immediately evident and highly motivate workers (for
the purpose of this survey, immediate can be defined as being within one to two months after the program).
Q.3: Executive education would/can help lower turnover rates within the company.
Q.4: Training held within a classroom setting is more efficient than that of an online executive education programs.

In-class executive education programs were reported as more efficient than an online executive
education program (see Table 1) as reflected by the 63 percent response for “somewhat agree”.
Institutions would better serve the market by having a hosted facility and/or partnering with a local
institution to establish their executive education programs.

Singaporean companies are also willing to invest in training programs for their employees. 56
percent of the respondents said they would be willing to invest S$1000 (US$600) or more for
employee training. 31 percent were willing to spend between S$501 (US$300) and S$1000
(US$600) (costs refer to per person spending). Lastly, about 13 percent of the companies responded
that they were willing to spend between S$301 (US$180) to S$500 (US$300) per person.



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Companies also categorized the need for training programs, ranking from highest to lowest, in
leadership, strategic planning and business skills. Lowest tied are for operations management, and
human resource management, as well as innovation and creativity programs.

HR leaders also noted some grievances about executive education. There were some companies who
expressed a negative impact on their employees who, upon completion of the program, expected to
be promoted. Employers also expressed difficulty in assessing the employee's ability and post-
training progress which sometime resulted in unrealistic expectations. Some HR managers stated
that it would be more effective to train an employee in a program that would relate to his or her
working environment. Another concern was how good are the lecturers and the facilitators or the
program.

Import Market

Third country competitors also add to the executive education market in Singapore. Some of the
main imports include France’s INSEAD (www.insead.fr), the Netherlands’ Rotterdam School of
Management of the Erasmus University (www.eur.nl), and the UK’s Logistics Training and
Consultancy (www.logisticstraining.co.uk).

Schools are continuously coming into the region to launch training institutions, and Singapore
continues to open and redesign its institutions as well.

Competition

U.S. institutions’ main competitors are already present in Singapore, and the competition has
stabilized. Competitors in the executive education sub-sector include domestic schools and training
programs and foreign non-U.S. schools in Singapore. Presently, these foreign non-U.S. institutions
offering executive programs include: INSEAD (France), Design Technology Institute (a joint
program of National University of Singapore [NUS] and Technische Universiteit of Eindhoven, the
Netherlands), Technical University of Munich (also partnered with NUS), and Shanghai Jiao Tong
University (partnered with Nanyang Technological University [NTU]).

Singapore schools that offer executive programs are many in number. Many are tailored for specific
industries, such as hotel management. Other executive education programs are offered through the
larger university institutions, such as Nanyang Business School of Nanyang Technological
University. Some domestic institutions include the Management Development Institute of
Singapore (MDIS) and Marketing Institute of Singapore (MIS).

While there are many institutions in Singapore, those from the United States tend to have a better
advantage and popularity because of the Singaporean desire to learn from an economic power.
Alongside that, Singapore’s universities are willing to partner with various U.S. institutions,
allowing those who enroll in the program to benefit from both sides. Singapore’s collectivistic
society regards name and prestige of a university as highly importance. It is thus favorable to U.S.
universities to hold executive education programs in the country. The importance of product
differentiation and branding will help distinguish U.S. institutions from others.

The costs of executive education vary in great ranges. While some U.S. institutions’ programs are
priced under S$1000 (approximately US$600), others can be as expensive as S$10,000
(approximately US$6000). Domestic institutions are priced considerably lower, with some ranging
as low as S$100 to S$1000 (US$60 to US$600).

The costs include the inexpensive fees charged by local institutions for programs that occur within a
time-span of two days. Alternatively, some institutions pay the member or non-member price for
training programs. Programs are not limited to these price ranges as most companies choose the


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amount they wish to invest in training their employees. Also, most programs within similar outlines
are priced accordingly as well. When comparing the factors of price for U.S. institutions, the cost of
attending such programs may be considered too expensive for a SME. On the other hand, MNCs
may find cost less of an issue and compare more quality and prestige than price.

End Users

Theoretically speaking, anyone working for a company – SME, GLC, and MNC – is an end user for
executive education. The basic demand for such programs will come from employees that require
further training because of the changing job market or the need to update one’s skills.

The Ministry of Manpower (MOM) published results in a paper titled “Employer Supported
Training” for the year 2003. Based on this information, larger corporations (over 500 employees)
were more likely to send employees for training (see Chart 1), the majority were trained for job-
specific skills (see Table 1), and that training was geared more towards PMETs (professionals,
executives and managerial group) (see Chart 2).

Chart 1: Proportion (%) of Training-Providing Firms by Firm Size, 2000, 2002 & 2003
                                                                                                          98.8 96.6 98.7
                                                                                  89.2          89.6


                                                     74.4                                75.6
                                                                    70.8
      68.5        68.6


                                         55.7               56.2
             52           52.9                                                                                              2000
                                                                                                                            2002

                                 36.8                                                                                       2003




          overall                25-49                      50-99                    100-499               500 or more


Source: Ministry of Manpower, September 2004

Table 2: Proportion (%) of Training-Providing Firms by Training Area and Firm Size, 2003

   Training                                                                 Proportion of firms
   Area                                         Overall              25-49          50-99              100-499     500 or more
   Job Specific Skills                                    90.1             86.2             91.2           93.3            97.4
   Business Skills                                        45.7             33.2             39.8           61.7            90.1
   IT Skills                                              43.1             32.4             36.6           57.8            85.4
   Personal Development                                   38.4             26.2             36.4           49.7             85
   Basic Skills in Literacy
   and Arithmetic                                         14.6              5.9             11.6           22.8            56.2

Source: Ministry of Manpower, September 2004




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Table 3: Provision of Structured Training Among Main Occupational Groups by Firm Size, 2003

                                                                   25-49        50-99     100-499         500 or more
PMETs                                                                  43          40.5         50.9                  67
Sales and Services                                                   29.3          35.7         45.1                65.6
Production Operators, Cleaners & Laborers                            34.2          37.3         40.8                60.5

Source: Ministry of Manpower, September 2004



Chart 2: Provision of Structured Training Among Main Occupational Groups by Firm Size, 2003



                                                                      67 65.6

                                                                                60.5


                                              50.9
                                                                                          PMET s
                                                     45.1
      43
                         40.5                               40.8
                                       37.3                                               Sales and Services
                  34.2          35.7

           29.3                                                                           Production Operators, Cleaners &
                                                                                          Labourers




           25-49            50-99               100-499               500 or more



Source: Ministry of Manpower, September 2004

As seen in Chart 1, the majority of employees who attend some form of executive education work
for large companies, usually MNCs. Therefore, the primary end users of executive education, at
present, are those working for larger companies. In contrast, the market can be expanded to include
SMEs as well. Most of these are privately owned and may not have as much purchasing power as
an MNC. This, however, does not stop them from being an end user of this resource, as it is
available for all employees if the company allows it.

Market Access

Singapore’s open economy allows for U.S. education institutions to enter freely in one of two ways.
A university may either franchise programs to a local university or institution (as in a partnership) or
set up a representative for the program in the region. Moreover, if an institution only wishes to hold
programs or seminars, they are free to do so as well. Foreigners no longer need to apply for the
Professional Visit Pass (PVP) unless the program or seminar involves a racial, communal, religious,
or political cause. For more information, please visit the Immigration and Checkpoints Authority
website at: www.ica.gov.sg.

Singapore’s acculturation of Chinese, Malay, Indian and Western values and ideals was brought
about through the mixing of east and west. The diverse nation-state holds to both western and


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eastern values, and the economy is open trade and investment. Specifically, smaller, family owned
business enterprises tend to hold to their own cultural values, traditionally Chinese in nature. Thus,
in bringing education institutions into this country, it must be taken into consideration that while
these SMEs are aware of western practices, they may not always execute them in business.

Another drawback to U.S. institutions is that many of the SMEs are owned by Chinese
entrepreneurs. Several local institutions cater to this group by offering courses taught in both
English and Mandarin. Mandarin courses are tailored to target those whose English is not up to par
with the business level, or for those who have a limited knowledge and vocabulary of the English
language. U.S. institutions have the option of attempting to break into this market or ignore it
completely. If an institution decides on targeting this group, it must know that a Chinese-speaking
faculty is a necessity in getting the attention of this group.

Market Entry

Singapore readily accepts foreign education, and the Ministry of Trade and Industry fully supports
the expansion of executive education. Therefore U.S. institutions will have a relatively easy entry
into the market. Institutions can choose to create a partnership with Singaporean organizations or
set up a regional office/department. Executive education programs that are developed will have to
focus towards specific segments of Singaporean companies. Institutions can then advertise their
programs through many channels, including media advertising of billboard advertisements in MRT
(subway system) stations, bus stops, and taxis as well as through direct messages through a
corporation.

Financially, an institution must be stable with enough funds to cover initial costs and expenditures,
since it is important to have a presence in Singapore. It is more costly to set up a campus locally;
therefore an institution with a tight budget may opt to partner with a Singaporean university or
institution and use the available facilities. Generated revenue will only arrive if people are willing
to utilize and register for the institution’s executive programs. Thus, they need to be attractive to
both locals and expatriates working in various companies in the region.

Opportunities for Profile Building

No professional associations have been developed for executive education in Singapore. However,
local universities have a membership program so that if an American university chooses to create a
separate program or facility, the membership can help publicity as well as provide benefits for the
institution.

At the moment, there are no upcoming shows on executive training/education in Singapore or
elsewhere in the region.

Key Contacts

Singaporean organizations can provide information and support on the market. The Singapore
Economic Development Board (EDB) maintains opportunities and growth in market development
and can help with finding potential matches for executive education programs. The Ministry of
Education (MOE) records education statistics of pre-University students and helps introduce the
Singaporean ideal for education and goals for the student population. The MOE aids in publicity
and awareness of programs and education services in the city-state-nation. Another organization,
Ministry of Manpower (MOM) can provide financial incentives to industries interested in
undertaking such programs to further develop the workforce in Singapore.

The U.S. Commercial Service in Singapore will be pleased to provide customized assistance to U.S.
universities, colleges and corporate training providers through its Platinum Key Service (PKS), Gold



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Key Service (GKS), trade missions and other programs to help them expand in the Singapore
market. More details are available from our website: www.buyusa.gov/singapore.

Key Contacts

Economic Development Board
250 North Bridge Road #28-00
Raffles City Tower
Singapore 179101
Tel: 65 6832-6832
Fax: 65 6832-6565
Web: http://www.sedb.com

Ministry of Education
1 North Buona Vista Drive
Singapore 138675
Tel: 65 6872-1110
Fax: 65 6775-5826
Web: http://www.moe.gov.sg/

Singapore Education
Tourism Court, 1 Orchard Spring Lane
Singapore 247729
Tel: 65 68313 764
Fax: 65 6736 9423
Web: http://www.singaporeedu.gov.sg

Ministry of Manpower
18 Havelock Road
Singapore 059764
Tel: 65 6534-1511
Fax: 65 6534-4840
Web: http://www.mom.gov.sg




Executive Education                                                                         7