Abstract
The machine-tool production industry in Singapore is much smaller than in Taiwan or Korea. Nevertheless, it is noteworthy because Singapore's case shows a feature different from the other Asian Newly Industrializing Economies. The Taiwanese machine-tool industry is composed of numerous local small builders. In Korea, the local business groups include prominent machine-tool builders. In contrast, foreign direct investment plays an essential role in building machine tools in Singapore. Presently, three foreign machine-tool builders operate in Singapore. Okamoto was established as a grinding machine builder in 1973. Makino Asia took over LeBlond Asia, an American lathe builder's subsidiary, in 1981 and commenced to build machining centers. The main products of Yamazaki Mazak are numerical controlled (NC) lathes since 1996. Each parent company transferred production technology to these subsidiaries and has been supplying key parts. Their products are exported to developed countries. They depend on neither local vendors nor customers. The business linkage between the foreign builders and the domestic industries is not strong.But Okamoto served as an incubator for local entrepreneurs and technicians. A former Okamoto sales manager and his colleagues founded their own small company, Excel Machine Tools, and started building machine tools in 1987. They had gained their technical and managerial experience at Okamoto over ten years. On the basis of their expertise, Excel received technical assistance from a small machine-tool builder in Japan and obtains substantial financial support from the government. This successful local machine-tool builder is the most remarkable outcome of Japanese direct investment.
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