TheGovernanceofSingaporesKnowledgeClusters: OffShoreMarineBusinessandWaterHub

ThomasMenkhoff
(withresearchassistancebyGabrielYee)

LeeKongChianSchoolofBusiness SingaporeManagementUniversity and HansDieterEvers CentreforPolicyResearchandInternationalStudies(CenPRIS) UniversitiSainsMalaysia

Abstract Basedontwocasestudiesofknowledgeclusters(offshoremarine/rigbusinessandwater hub)inSingapore,thepaperillustratestheimportanceofgoodknowledgegovernancein creating robust and valuecreating knowledge clusters. We begin by defining key terms used such as knowledge clusters, hubs and governance, followed by a short historical accountofgoodknowledgegovernanceforSingaporesdevelopment.Thetwocasesstudies of knowledge clusters presented here include (i) the offshore oil rig business (Keppel) which we posit as an example of innovative value creation based on sophisticated fabrication methods and R&D as well as (ii) the island republics dynamic and rapidly emerging,globalhydrohubcalledWaterHub.Weexaminethestructuralcharacteristicsof both clusters, assess their progress based on the cluster lifecycle literature, highlight key governance enablers required to create and sustain such competitive hubs and draw conclusionsforK4Dlatecomers. Keywords Knowledgegovernance,knowledgeclusters,sciencepolicy,Singapore

Introduction:EconomicSuccessThroughGoodKnowledgeGovernance
AkeyelementoftheSingaporesuccessstoryasaneconomicpowerhouseandknowledge city (Carrillo 2004; 2006) is the skillful deployment of good knowledge governance and associated strategies by policymakers and leaders in government and business aimed at creating sustainable knowledgeclusters with dynamic knowledgehubs (Pinch et al. 2003). Due its robust knowledge ecosystem, Singapore has been identified as a role model by multilateral development agencies such as the Asian Development Bank (ADB) or the World Bank to inspire latecomers in the knowledge race in the context of knowledge for development programs (K4D). In this paper, we will present brief analyses of two knowledge clusters in Singapore aimed at identifying some of their specifics in terms of structure, knowledge governance and performancerelated outcomes to provide lessons learnt for Asian policymakers and leaders interested in leveraging on knowledge for development(Evers2011). Definitions We coined the term knowledge governance in line with the discussion about good governance as one important enabler of the rise of the Asian growth economies (Evers, Gerke, Menkhoff 2011; Menkhoff et al. 2010). We define and conceptualise knowledge governance as both a managerialadministrative process and a structure of authority relations; it involves the channelling of resources in building up knowledge management capabilitiesandimprovingthecompetitiveadvantageofacountryintheworldmarketby utilizingknowledgeasafactorofproduction.Knowledgegovernancereferstothemultiple tasks and capabilities of governmental units in embedding and creating appropriate institutions to leverage on glocal knowledge from establishing high quality primary schools to the codification of national ICT plans aimed at creating a knowledgebased economy (or as in the case of Singapore an intelligent nation) and the effective management of foreign talent. Relevant governance factors in the Singapore Inc. case includethehighsteeringpowerandefficiencyofgovernment,stateandknowledgeelites aswellasoutstandingplanningandorganisingcompetenciesofunitstaskedwithrealizing 2

national KBE goals. Examples of significant plans include the Strategic Economic Plan (1991) with cluster development goals for the manufacturing sector and services; the IT 2000Plan(1992)aimedatdevelopingnationalInternetBroadbandnetwork;theIndustry 21 (1999) with focus on knowledgeintensive sectors and the various Science & Technology Plans; or the Intelligent Nation Masterplan iN2015. All these plans were instrumentalinachievingthevisionof policymakersaimedat(i)systematicallycreating knowledgehubs,competencecentresandcentresofexcellence,(ii)developingknowledge clusters as learning regions, (iii) transferring knowledge to stakeholders in civil society, governmentandbusiness,(iv)acquiringknowledgethroughglobalproducernetworksand (v)utilisingglocalknowledgetobuildcomparativeadvantagesinnicheareas(Menkhoffet al.2011). ProminentknowledgeclustersinSingaporeincludethehealthsector,thefinanceindustry, softwareengineering,lifesciencesandbiotechnology.Economicresearchhasemphasized thecloseinterconnectednessofinnovation,localeconomicgrowthandclusterformation (Porter 2000; James 2005). We define knowledge clusters as agglomerations of organisationsthatarelargelyproductionoriented.Theirproductionisprimarilydirectedto knowledge as output or input. Knowledge clusters have the organisational capability to drive innovations and create new industries. They are central places within a wider structureofknowledgeproductionanddissemination(Evers,Gerke,Menkhoff2010:648). Examples of organisations in knowledge clusters are universities and colleges, research institutions, thinktanks, government research agencies, and knowledgeintensive firms. What is important is the diversity of the players involved. They may complement one another, be in competition, or cooperate (Nick and Pinch 2006). Our research in Asian knowledgecitieshasdemonstratedtherelevanceofthesestructures(Menkhoffetal.2009; Menkhoffetal.2010). Knowledgehubsmayexistinthesamelocationsasknowledgeclustersandmaybenested within them. Wedefineknowledge hubsaslocalinnovationsystems,nodesinnetworksof knowledgeproductionandknowledgesharing(Evers,Gerke,Menkhoff2010:649).Theyare characterised by high connectedness and high internal and external networking and knowledge sharing capabilities. As meeting points of communities of knowledge and 3

interest, knowledgehubs fulfill three majorfunctions: to generate knowledge, totransfer knowledge to sites of application, and to transmit knowledge to other people through education and training. Knowledge hubs are always nodes in networks of knowledge disseminationandknowledgesharingwithinandbeyondclusters(Chayetal.2010;Evers etal.2011). Following the success of knowledge clusters and hubs elsewhere in Europe or the US, policymakers in various developing countries have attempted to pursue strategies of creating robust and valueadded knowledge systems qua innovative agglomerations of knowledgeintensive organizations, following the lead of Silicon Valley in the US or the Munich hitech belt. In the early 1980s, Indonesia declared four of its universities to be centres of excellence, and gave them particular financial support. The results were not convincing(Tjakraatmadjaetal.2011).Onlyisolatedcompetencecentreswereestablished, and they were not adequately networked with other knowledge and production hubs. Knowledge clusters cum hubs were not created. Real human actors such as connectors, brokers or boundary spanners play an important role in positively influencing cluster dynamicsandclusterculture(Zook2004).Often,themanagementteamsofnewlycreated knowledge clusters (e.g. Malaysias Multimedia Supercorridor / MSC) do not fully utilize standard knowledge management tools such as communities of interest / practice which could help to overcome silo mentalities and to foster a knowledge culture prevalent in manysuccessful knowledgeclustersaroundtheworldcharacterizedbybothcompetition and collaboration (= cooptation) (Evers, Nordin, Nienkemper 2010). Against this background, an interesting research question is what lessons can be learned from the Singaporeknowledgeclusteringcasestudy? Theknowledgegovernanceapproachofsuccessfulclustershasspecificcharacteristicsthat canbemadeexplicit.AsastudyofthewineindustriesinItalyandChilehasshown,firms with a strong knowledge base are more likely to exchange innovationrelated knowledge with otherfirms. However,thisisconsideredtooccuronlyamongfirmswhosecognitive distance is not too high. This may explain the formation of densely connected cohesive subgroupsandtheemergenceoflocalknowledgecommunities(Giuliani2007:163),or,in 4

our terminology, the formation of knowledge hubs. In the following, we will examine the governance specifics of two prominent knowledge clusters in Singapore and attempt to identify the various lifecycle stages (Sass et al. 2009; SRI international 2001) of these clusters. The cluster literature distinguishes between (i) the precluster or embryonic stage where market actors colocate but have not yet achieved institutionalized cooperation activities, the (ii) emerging stage where actors start to cooperate qua agglomeration effect around a core activity, (iii) the collaborative or established stage where the cluster has gained a distinct identity and where the cluster has attracted new entrantsduetorealcollaborationadvantagesand(iv)thematurestagecharacterisedby longtermsustainabilityandfullydevelopedinternalandexternaldynamicsinformofnew firm creation through startups, JVs, spinoffs etc. The final phase is the declining stage wheretheclusterhaspeakedandisexperiencingstagnation,inabilitytoadapttochange andinnovateetc.Newtechnologies,newmarketsornewclusterentrantscanavoidsucha declineandhelptotransformtheclusterintonewclusterorganizationssoastoreenter the lifecycle. Sustainable cluster management poses great challenges for both policy makers and business leaders given the volatile business environment and competition dynamics in Asia. Singapore has considerable management capabilities in this respect as we shall see when we examine the origin, structure and evolution of the two clusters featuredinthispaper.Wewillalsodiscusssomeofthecriticalfactorsthatshapeandaffect clusterssuchasimportantclusteractorssuchasfirmsortheresearchcommunity,spatial dynamics (e.g.location),potentiallysynergeticlinkagesandinterrelationshipsbetween and among cluster actors, related knowledge transfer mechanisms as well as cluster performance,forexampleintermsofnewknowledgecreation/innovation(Tallmanetal. 2004;Meusburger2000;Aziz2011).

CaseStudy1:TheSingaporeMarineCluster(SMC)
BackgroundandLocationSpecifics Traditionally,shippingand portrelatedsectorshaveformedthebackboneofSingapores economyduetothehubfunctionofthecitystateanditsstrategiclocationasanidealplace forthedockingandrepairofships.Singaporesmarineindustrywithitsmorethan5,000 maritime establishments represents more than 7.5% of Singapores Gross Domestic Product (GDP) according to the Marine and Port Authority of Singapore (2010). The industry is divided into three main sectors: (i) Ship Repair and Conversion, (ii) Shipbuildingand(iii)Offshore.Togetherwithmaritimeservicessuchasshippingfinance, marineinsuranceandmaritimelegalandarbitrationservices,theyformpartandparcelof theSingaporeMarineCluster(SMC).Sinceitscreationinthe1960s,thisclusterhasplayed asignificantroleinSingaporeseconomyintermsofjobcreationandvalueadded.In2008, it provided 70,000 jobs of which 12,000 were skilled workers with an output in 2009 of S$16.83billion(GovernmentofSingapore,2010).Themostimportantrole,providing55% oftotalindustryearnings,isplayedbytheoffshoresector.

Map:SingaporesMaritimeClusterinTuas

Respective cluster companies are situated in close proximity to each other in the south westernregionofSingaporecalledTuas(AssociationofSingaporeMarineIndustries,2011) as illustrated on the map above. The Tuas marine cluster is close to the ports as well as othermarinerelatedcompanieswhosupplyseveralcomplementaryservices.With70%of theglobalmarketshareofFloatingProductionStorageOffloading(FPSO)vesselconversion, 70%ofworldmarketshareforjackuprigbuildingand20%ofworldmarketshareforship repair, Singapores SMC boasts a comprehensive offering of repair services, conversions and new constructions for an international clientele. As a knowledge hub, the maritime cluster has successfully put Singapore on the world map due to both good knowledge governanceatnationallevelandeffectiveknowledgecumtalentmanagementatthemicro levelsofboththehubandwithinparticipatingfirms.Whatmakesthemarineclustertick? InsideSingaporesMaritimeCluster:KeyGovernanceActors Good knowledge governance by institutions such as Singapores Economic Development Board(EDB),theMaritimeandPort Authority(MPA),AgencyofScience,Technologyand Research (A*Star) etc. has played a key role in creating, maintaining and expanding Singapores marine cluster. Besides business acumen, research and development (R&D), talent development etc., authorities managed to attract various shipping financerelated companies in order to expand the industry such as banks, boutique shipping investment banks, private equity arrangers, shipping finance advisers, shipping finance conference organizers and publishers of maritime finance transactional information etc. It also launchedthefirstclearingfacilityforfreightandenergyderivativesinAsia,SGXAsiaClear (2006),tofurther strengthenSingaporespositionasakeyhubportforoilandmaritime commerce to serve the Asian energy and Forward Freight Agreements (FFA) market. To nurtureacultureofmaritimevibrancyandbuzz,newflagshipeventswerelaunchedsuch asMaritimeWeekorthemaritimeconferencecumexhibitionSeaAsia.Forthefutureit is planned, to further grow other maritime services such as shipping finance, marine insurance and maritime legal and arbitration services

(http://www.maritimecareers.com.sg/maritime_industry_shipping_article2.html). 7

 InsideSMC:TheKeppelOffshore&MarineHub A key corporate actor within the SMC is the Keppel group of companies. Incorporated in 2002,KeppelOffshore&Marinehasover300yearsofcombinedexperiencefromthethree companies under its wing, namely Keppel Fels, Keppel Shipyard and Keppel Singmarine. With its key competency of offshore engineering, Keppel FELS is the worlds leader in offshoreoilrigfabrication,globallyrenownedforitsprowessatresearchanddevelopment (R&D).KeppelShipyardspecializesinmarineengineeringandhasbecomeaworldleader in the conversion of Floating Production Storage and Offloading (FPSO), Floating Storage and Offloading (FSO) and Floating Storage and Regasification Units (FSRU). Specialized shipbuilder Keppel Singmarine complements both Keppel FELS and Keppel Shipyard becauseitprovidesthekeysupportingvehiclesthatwouldberequiredforshipconversion andoilrigfabrication.Keppeliswellknownforitscompetitiveabilitytodeliverprojectson time and within budget. In 2010, the Group completed 12 new built jackup and semisubmersible rigs, 5 major FPSP/FSRU conversion projects and 18 quality vessels worldwide safely, on time and within budget. As illustrated on the map below, Keppel Offshore&Marinescompaniesandyardsaresituatedrelativelyclosetoeachotherwithin theSMCwhichfacilitatesknowledgesharingandcreation,arguablykeysuccessfactorsin thisbusiness(Boschma2005). Altogether, Keppel employs over 30,000 employees in more than 30 countries following the motto Near Market, Near Customer. In Singapore alone, the Keppel Group has a workforceofover1,500people.TheworkforceofKeppelFelsconsistsof70%foreigners and 30% local talent. For every local person hired, a company in the marine sector is entitledhirethreeforeignworkpermitholderswhoareallowedtoworkforupto15years inSingapore.TheyaremainlyrecruitedfromChina,India,Myanmar,Thailand,Bangladesh, MalaysiaandSriLankaandworkaswelders,fitters,mechanicsandotherskilledlaborers.

 Map:LocationofKeppelcompanieswithinSingaporesMarineClusterinTuas

FabricationandYardFacilitiesofKeppelinTuas

Intermsofproductinnovations,KeppelOffshore&Marineiswellknownforitsinnovative ultra deepwater solutions such as semisubmersibles, drilling tenders, or compact drill ships.Italsomanagedtobuildthefirst pairoficebreakers inthehotAsian tropic region destinedforcustomersintheWest. Keppelalsohasconsiderableoperationsmanagementknowhowasevidencedbyitsability toconverttheirformershipbuildingyardsintoyardstobuildoilrigsduetothegrowing demand for deepwater drill rigs and diminishing demands for ships. This flexibility to adjust the shipyards function to market demands in a highly volatile economy coupled with the ability to execute plans well forms part of Keppels innovative DNA. It has also integrateditsownsteelfactoryintoitssupplychaintobecomelessdependantonsupply 9

constraintsbecausesteelissuchanimportantcomponentintheirbusinesswhichcanalso besoldprofitablytootherindustries(Lim,2011). StrategicKnowledgeResourceswithintheKeppelHub One of Keppels most important knowledge resources is its engineering know how accumulatedover40yearsofexperience(Choo,2010)asevidencedbythefirmsabilityto build/repairoilrigsandtocarryoutcompletionprojectsthatcouldnotbedeliveredon timebyothers(KeppelOffshore&Marine,2010).Keppelsknowhowtodrillforoilunder harsh conditions gave them a head start in meeting the changing demands of the oil industryascheapandeasilyaccessibleoilsuppliesarerunningout.Thishasalsoallowed thefirmtotakeonconversionprojectsaimedatupgradingandconvertingoldertypesof rigsintooilrigscapableofdrillingindeepwaters(KeppelOffshore&Marine,2010). Keppel differentiates itself by customized designs depending on location conditions which allows clients to maximize the amount of oil being drilled at each site. Its engineer designs take safety standards into consideration (Keppel Offshore & Marine,2010)whichhelpstoreducehumanproneerrorsthat could result in desasters, enhancing clients confidence in business continuity. Keppel has also patented their own rig designs(KeppelOffshore&Marine,2010). Through strategic joint ventures with various supporting industries etc. such as RegencySteelJapan,AsianLiftPteLtd(Singapore)andKeppelSmitTowagePteLtd andcollaborationswithresearchinstitutesandinstitutionsofhigherlearning,Keppelhas gainedconsiderableknowledgeinareassuchassteelproduction,transportationofbulky megaproducts(rigs)safelyacrosstheseathroughtowageorconstructionofstrongcranes to increase their lifting capacity (Keppel Offshore & Marine, 2010). This knowledge has enabledKeppeltoremainindependentwithouthavingtorelyonexternal(andpotentially unreliable)sourcesofrawmaterialsandtransportationservices,thusallowingthegroup 10

to deliver to clients on time and on budget and to achieve considerable competitive advantages. The firms extensive knowledge and understanding of deep water conditions and future orientation has opened up a new market for building offshore wind farms (Keppel Offshore&Marine,2010).Thedemandforwindfarmsasasourceofalternativeenergyis predicted to increase in future and will make up 20% of energy production by the year 2030(U.S.DepartmentofEnergy,2008). KnowledgeCreationthroughResearch&Development(R&D) Keppels innovation capability in designing oil rigs is based on four specialized R&D departments.TheKeppelOffshore&MarineTechnologyCentre(KOMtech)spearheads the R&D of new technologies, processes and competencies. Its scope includes technology foresight into alternative energy applications as well as developing designs, systems and critical equipments for rigs and ships. The Offshore Technology Development (OTD) departmentisinchargeofcomingupwiththeforemosttechnologyandtechniquesinthe design of new generation jackup rigs and their critical systems. The Deepwater Technology Group (DTG) is in charge of inhouse deepwater rig designs. The Marine Technology Development (MTD) specializes in the design and development of offshore support and maintenance vessels for a variety of operating conditions globally (Keppel Offshore&Marine,2010). KnowledgeTransferthroughGlobalEngineeringManagementSystems(GEMS) Verticalandhorizontalknowledgetransferis facilitatedby KeppelsITenabled,socalled GlobalEngineeringManagementSystem(GEMS),acentralinformationandknowledge repositorywhichalsoprovidesR&Dsupport.Thispowerfultool,alsoknownastheGlobal Engineering Hub (Keppel Offshore & Marine, 2010), allows Keppel Offshore & Marine engineers to work on a common webbased platform across geographic boundaries, without compromising security. GEMS is accessible worldwide and helps Keppel employeestoconstantlyshareandgainknowledgeregardlessofwheretheyarestationed. (KeppelCorporation,2006). 11

 CollaborationwithResearchandEducationalInstitutions

Keppel maintains vast linkages to various external stakeholders which helps the organization to create new knowledge and to innovate such as research and education institutes or joint ventures with related corporations. Collaboration partners include A*Star, Singapore Polytechnic (SP), Ngee Ann Polytechnic (NP), National University of Singapore (NUS) and Nanyang Technological University (NTU). Key elements include an offshore engineering program for talented students (Choo, 2010) and the establishmentoftheCentreforOffshoreResearch&Engineering(CORE)intheFaculty of Engineering at NUS (2003) spurred by the endowment of the Keppel Professorship in Ocean,OffshoreandMarineTechnology.Thelatterwaslaunchedin2002withagiftfrom Keppel Corporation Limited. Examples of joint KeppelCORE projects are Improved GuidelinesforthePredictionofGeotechnicalPerformanceofSpudcanFoundationsduring Installation and Removal of Jackup Units (InSafeJIP) and the Spudcanpile Interaction JointIndustryProject. ChallengesAhead ThestrongestchallengesfacingKeppelsoilrighubarelikelytobeenvironmentalconcerns relatedtooildrillingactivities.Governments,corporationsandcommunitiesatlargehave expressed concerns on the impact of offshore activities on the environment following a series of oil spills and environmental breaches on strict regulations from offshore activities.These events have put pressure on Keppel and its competitors to frame their businessestobemoreenvironmentallyfriendly.

CaseStudy2:SingaporesWaterHub
BackgroundandLocationSpecificsofSingaporesWaterHub

On 2 October 1961, an agreement was signed between the city council of the state of Singapore and the governmentof Johor. The Tebrau and Scudai RiversWater Agreement and the Johor River Water Agreement, made a year later, enabled one the most water scarcecountriesintheworld(Singapore)toembarkonanepicmodernisationprogramme. 12

Althoughtheagreementsdefined thetermsandpricesof watersupply, theyhavebeena sourceoffrictionbetweenthetwonationsinrecentyearswithMalaysiaseekingtorevise the water price upwards and Singapore insisting on adhering to the agreements. With Malaysian politicians frequently calling for the tap to be turned off, Singapore decided in 2002thatthe1961WaterAgreementwillnotberenewedafteritexpiresin2011,andthat itwouldbegintolookatdevelopingalternativesourcesofwater.

Map:LocationsofKeyPlayersinSingaporesEnvironmentandWaterIndustry

The establishment of a diversified water supply (coined the Four National Taps), implementation of holistic water management practices, and the promotion of a water conservationculturearesignificantachievementsthatSingaporehasmadeinrecentyears asitprogressestowardsselfsufficiencyintermsofwatersupplyby2061.

Singapores water research and activity hubs are primarily located in the southern shore regions.Whilesometestbeds,researchcentresandcollaboratingeducationalinstitutions aregeographicallyclosetoeachother,theentireclusterisstillevolvingduetoitsrelatively youngageandtherecencyofwaterrelatedpolicyissuesandforcefulinterventionswhich wereinstrumentalforitsrapidevolution. 13

 InternalKnowledgeProcesses Linkagesbetweentheactorsinthewaterindustry

Figure:Linkagesbetweentheactorsinthewaterindustry A key governance role is played by the socalled Environment and Water Industry ProgrammeOffice(EWI),formedinconjunctionwitha2006declarationbytheSingapore Governmenttoturntheenvironment&waterindustryintoastrategicgrowthareawitha $$330 million commitment over 5 years aimed at developing Singapore into a global hydrohub. Thegovernmentsengagementwithcorporateentitiesisseennotjustthroughitseffortsin attractinglargeinternationalplayerstoanchortheirR&D,engineering,manufacturingand headquarteractivitiesinSingapore,butalsoingroominglocalcompaniestobekeyplayers intheregionalandglobalwatermarkets.Italsotriestoprovideaconduciveenvironment

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for startup companies in the industry through the creation of the Singapore Water Associationwhichactsasaforumfortheexchangeofideasandknowledgeetc.

Education institutions also play a key role in the emerging water cluster. There is ample government support in form of subsidies for Masters and PhD programmes as well as scholarshipsaimedatcreatingmoreknowledgeworkersandsendingstudentsoverseasto topinstitutionswithreputablewatertechnologyresearchprogrammes.Animportantlocal node is the Institute of Water Policy1at the Lee Kuan Yew School of Public Policy which wascreatedtodevelopbetterwatergovernancepolicies. With the help from EWI, several corporate entities have chosen to collaborate with researchcentresinlocaleducationinstitutionssuchastheNanyangEnvironment&Water Research Institute (NEWRI) at the Nanyang Technological University (NTU) or the NUS Environmental Research Institute (NERI) at the National University of Singapore (NUS). There are considerable testbedding opportunities in Singapore in form of PUBrelated facilities 2 like waterworks, NEWater factories and reservoirs. The EWI has special schemes3toacceleratethecommercialisationofnewenvironmentandwatertechnologies through their early adoption in Singapore providing developers with a platform to test theirproductsinreallifeoperatingconditions,andhelpingthembuildatrackrecordfor theirtechnologiestofacilitatemarketentry. OtherkeyinitiativesofEWIsstrategytobuilduptheenvironmentandwatertechnology industry in the context of cluster development include getting major international water companies to anchor their R&D, engineering, manufacturing and HQ operations in Singapore; grooming local companies to be players in the regional and global water markets; and creating a conducive environment for startup companies in the industry. Capability development (e.g. through specialized manpower development programmes)

1 2

InstituteofWaterPolicyhttp://www.spp.nus.edu.sg/iwp/Home.html SingaporeasaGlobalTestBedhttp://www.pub.gov.sg/ewi/CapabilityDevt/Pages/GlobalTestBed.aspx 3 TechPioneerSchemebytheEWIhttp://app.mewr.gov.sg/data/ImgCont/985/TechPioneerBrochure020908.pdf

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represents another key policy goal to promote Singapore as a Global Hydrohub. Another (networking)vehicleisthenewSingaporeWaterWeekwhichtookplaceinJuly2011. KeyGovernmentActorsinSingaporesWaterHub Key governance agencies within the Environment and Water Industry Programme Office (EWI) include the Ministry of the Environment and Water Resources (MEWR), the Public UtilitiesBoard(PUB),theAgencyforScience,TechnologyandResearch(A*STAR)andEDB.

MinistryoftheEnvironmentandWaterResources(MEWR)4 MEWR began as the Ministry of Environment in 1972 but changed its name in 2004 to reflect its expanding role in managing water as a strategic national resource. The EWI comesundertheMEWRwiththeaimofboostingthedevelopmentofthelocalenvironment andwaterindustrythroughR&Dandeducationalprogrammes.

PublicUtilitiesBoard(PUB)5 Known as the national water agency, the PUB played a big part in helping Singapore overcomewatershortagesdespiteitslackofnaturalresourcesandpollutioninitsrivers. Beyond its strategic role in managing the countrys water supply, water catchment and used water in an integrated way,PUB is now movingtowardsusing waterasa means to beautify Singapores landscape and improve Singaporeans quality of life to realise the visionofSingaporeasaCityofGardensandWater

AgencyforScience,TechnologyandResearch(A*STAR)6 FormerlyknownastheNationalScienceandTechnologyBoard,A*STARwasestablishedin 1991 with the primary mission to raise the level of science and technology in Singapore.

4 5

MinistryoftheEnvironmentandWaterResourceshttp://app.mewr.gov.sg/ PublicUtilitiesBoardhttp://www.pub.gov.sg 6 AgencyforScience,TechnologyandResearchhttp://www.astar.edu.sg

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A*STAR supports Singapores key economic clusters by providing the intellectual, human andindustrialcapitaltoitspartnersinindustry.

EconomicDevelopmentBoard(EDB)7 Together with the PUB, EDB plays a key leadership role in the EWI with the aim of attractingmorecompaniestolocatetheiroperationsinSingapore.Italsohelpsgrowlocal environmental companies, encourage more companies and research institutes to develop cuttingedge environment and water technology and then help export Singapores capabilitiestogrowingmarketsaroundtheglobe.

KeyCorporateActors Some of the significant corporate players in Singapores increasingly thriving water industry are Hyflux, (governmentlinked) Keppel Corporation, GE Water & Process Technologies(GEWater),SiemensWaterTechnologiesandothers.

Achievements8 Today,Singaporeisincreasinglyrecognisedasaglobalhydrohubwithmorethan70local and international organisations in its vibrant water and environment ecosystem ranging fromR&D,engineering,manufacturingtoheadquartersactivities.Asignificantindicatorof successisthefactthatSingaporebasedcompanieshavesecuredoverseascontractsworth S$8.4bn since 2006. The economic impact from investments by water companies from 2006 2010 include 2,300 new professional & skilled jobs and S$590 million of annual valueaddedtotheeconomy.

EconomicDevelopmentBoardhttp://www.sedb.com/edb/sg/en_uk/index.html BriefingbytheEWI26May2011 http://www.sedb.com/etc/medialib/downloads/pdf_documents_for0.Par.4763.File.tmp/Presentation%20for%20 Media%20Briefing%20on%20Water%20Industry.pdf

8 7

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Fig:SignificantProjectsinMiddleEastNorthAfricaRegion

Fig.:SignificantProjectsinAsiaPacificRegion

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Duetosuccessfulclustergovernanceandindustryparticipation,Singaporehasdeveloped strong capabilities in water management, new water technologies such as membrane applications and largescale water reclamation with international projects in Australia, China and the Middle East. These achievements were recognized through the 2007 StockholmIndustryWaterAwardtoSingapore.

Conclusion
In this paper we compared two distinct knowledge clusters in Singapore, the oil rig businessclustercenteringonKeppelCorporationandtherepublicsincreasinglydynamic hydrohub (WaterHub). Both contribute significantly to Singapores development, albeit operateatdifferentstagesintheclusterlifecycle. Keppelisaheadintheglobaloilrigfabricationbusinessduetoitsabilitytogenerateand share new knowledge effectively both within its own cluster of companies and across significant stakeholders in business and society. Due to strong knowledge leadership, Keppel is able to harness and manage knowledge through strategic R&D and sound management in various areas such as talent management, operations management, innovationmanagementorsalesandmarketing.Asof2007,Singaporeheldtwentythree patents for oil rig construction with nine out of eleven patents awarded to Singaporean companiesbetweentheyears2000to2007(Wong,Ho,&Singh,2007).Whilethenumber of researchers within the marine engineering industry (which the offshore sector is classified under) is still relatively low compared to other scientific fields, it is steadily increasingduetothehigherimportanceofR&Dforcompetitiveadvantageandtheneedto come up with new (greener) business models. Keppel has identified key areas for future expansion to fight off threats from other companies and to meet future needs, e.g. with regard to alternative energy sources. The marine cluster appears to be very robust. Over time, the flourishing rig business has encouraged the growth of supporting firms in the localmarineservicessectorsuchaslogisticsandprocurementsupportservices,chartering of offshore supply vessels, rig repair services or IT services for mutual advantage. Our analysis suggests that the rig cluster is currently in its mature stage characterised by 19

stronginternalandexternaldynamicsinformofnewfirmcreationthroughstartups,JVs, spinoffs etc. As such, through constant knowledge innovation and adaptation to environmentalconcerns,Singaporesoilrigbusinessclusterwillcontinuetobetheworlds leaderinthefabricationofoilrigsandexplorationofalternativeenergythuscontributing toSingaporeseconomiclongevity.Duetothesuccessfulsearchfornewtechnologiesand markets,theclusterwilleventuallysuccessfullyenterthetransformationstagewithnew clusterconstellationsandavoidthedecliningstage. Based on our analysis so far, we conclude that Singapores waterhub cluster is geographically subdivided into several smaller clusters. Within these clusters, we find several hubs, often in form of specialised buildings (vertical localities) where key corporate players are located close to each other with easy access to both public and private sector research centres in form of NEWRI, Waterhub & NERI. Given Singapores smallgeographicalareaandgoodtransportationinfrastructurethatconnectsR&Dcentres with testbeds and manufacturing facilities, companiesare ableto enjoy a decent levelof bothhorizontalandverticalclustering.Stagewise,wepositionthewaterhubbetweenthe emergingstagewhereactorsstarttocooperatequaagglomerationeffectarounda core activity (e.g. membrane R&D) and the collaborative or established stage wheretheclusterisgainingadistinctidentity,attractingnewentrantsduetovalueadded collaborationadvantages.Givenverystronglocalneedstoexpandnewwatersuppliesand catchmentareasaswellascompetentpoliticalsteeringandgovernance,thereisnodoubt that Singapores water cluster will (sooner than later) reach the mature stage characterised by longterm sustainability and fully developed internal and external dynamics in form of new cluster organizations. Collaboration between citizens, government and industry will be crucial for a sustainable water future in Singapore and beyond. SomekeylessonslatecomersintheknowledgeracecanderivefromtheSingaporecaseare asfollows:(i)leverageonyourlocationadvantageifyouhaveone;(ii)buildasolidskills based foundation before you think global and align the local education system with the demandsofaknowledgebasedeconomyand(iii)getindustryexcitedaboutfuturecluster 20

prospects, e.g. in the context of PPP frameworks and with the help of good knowledge governanceandstrategicR&D.UniquelySingapore(anddifficulttoreplicate)isarguably the very strong local need to become independent from Malaysian water supplies which motivatedthegovernment totakechargeindeveloping a(global)hydrohubandalsothe legacy of British colonialism in form of a seizable infrastructure of shipyards and marine technology know how upon which the current marine cluster and Keppels success story are(historicallyseen)based. References Boschma, Ron. 2005. Role of Proximity in Interaction and Performance: Conceptual and EmpiricalChallenges.RegionalStudies39:4145. BusinessTimesJuly6,2011.Towardsa50yearplanforwatersustainability(byHeiner Markhoff). Carrillo, Francisco J. 2004. Capital cities: a taxonomy of capital accounts for knowledge cities.JournalofKnowledgeManagement8:2846. Carrillo, Francisco Javier. 2006. Knowledge Cities: Approaches, Experiences and Perspectives:ButterworthHeinemann. Chay, Yue Wah, Thomas Menkhoff, Benjamin Loh, and HansDieter Evers. 2010. What makes Knowledge Sharing in Organisations Tick? An Empirical Study. Pp. 301325 in GoverningandManagingKnowledgeinAsia,editedbyThomasMenkhoff,HansDieterEvers, andYueWahChay.Singapore:WorldScientific. Evers,HansDieter,andAzhariKarim.2011."TheMaritimePotentialofASEANEconomies." JournalofCurrentSoutheastAsianAffairs30(1):11724. Evers, HansDieter. 2011. "Knowledge Cluster Formation as a Science Policy: Lessons Learned." Paper read at the Science, Technology and Society Workshop, 2324 September 2011BandarSeriBegawan:UniversitiofBruneiDarussalam. Evers, HansDieter, Solvay Gerke and Thomas Menkhoff. 2011. Knowledge Hubs and Knowledge Clusters: A Knowledge Architecture for Development, Thomas Menkhoff, HansDieterEvers,ChayYueWahandPangEngFong(eds),BeyondtheKnowledgeTrap DevelopingAsiasKnowledgebasedEconomies.WorldScientific,pp.2745.

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Evers, HansDieter, Solvay Gerke, and Thomas Menkhoff. 2010. "Knowledge Clusters and KnowledgeHubs:DesigningEpistemicLandscapesforDevelopment."JournalofKnowledge Management14(5):67889. Giuliani, Elisa. 2007. The selective nature of knowledge networks in clusters: evidence fromthewineindustry.JournalofEconomicGeography7:139168. Henry,Nick,andStevenPinch.2006.KnowledgeandClusters.Pp.114132inClustersand Globalisation, edited by Christos Pitelis, Roger Sugden, and James R. Wilson. Cheltenham: EdgarElgar. Hornidge, AnnaKatharina. 2007. Knowledge Society: Vision and Social Construction of RealityinGermanyandSingaporeBerlinandLondon:LITVerlag. Hornidge, AnnaKatharina. 2006. "Singapore: The KnowledgeHub in the Straits of Malacca." in ZEF Working Papers Nr. 14. Bonn: Center for Development Research, UniversityofBonn. Iammarino, S., and P. McCann. 2006. The structure and evolution of industrial clusters: Transactions,technologyandknowledgespillovers.ResearchPolicy35:10181036. James, A. 2005. Demystifying the role of culture in innovative regional economies. RegionalStudies39:11971216. Kamarulzaman AB Aziz 2011. The Dynamics for Sustainable Cluster Development: A Comparative Study of the Multimedia Super Corridor and the Glasgow Edinburgh Corridor.UnpublishedPhDStudy,MultimediaUniversity.Malaysia. Menkhoff,Thomas,SolvayGerke,HansDieterEvers,andYueWahChay.2009.Wissenund EntwicklunginSingapur.ASIENTheGermanJournalonContemporaryAsia,No.112(July), pp.3151. Menkhoff, Thomas, HansDieter Evers, and Yue Wah Chay (Eds.). 2010. Governing and ManagingKnowledgeinAsia,2ndrevisededition.NewJersey,SingaporeandLondon:World ScientificPublishing. Menkhoff,Thomas,Evers,HansDieter,ChayYueWahandPangEngFong(eds).Beyondthe Knowledge Trap: Developing Asias Knowledgebased Economies, New Jersey: World ScientificPublishing2011. Menkhoff, Thomas, Evers, HansDieter, Chay Yue Wah and Solvay Gerke Achieving Knowledge Economy Status through Good Knowledge Governance: The Singapore KBE StoryRevisited,ThomasMenkhoff,HansDieterEvers,ChayYueWahandPangEngFong (eds), BeyondtheKnowledgeTrapDevelopingAsiasKnowledgebasedEconomies. World Scientific,2011,pp.299323. Meusburger, Peter. 2000. The spatial concentration of knowledge. Some theoretical considerations.Erdkunde54:352364. 22

 Munnich,LeeW.Jr.,GregSchrock,andKarenCook.2002.RuralKnowledgeClusters:The ChallengeofRuralEconomicProsperity. ReviewsofEconomicDevelopmentLiteratureand Practice,UniversityofMinnesota12. Pinch, Steven, Nick Henry, Mark Jenkins, and Stephen Tallman. 2003. From industrial districts to knowledge clusters: a model of knowledge dissemination and competitive advantageinindustrialagglomerations.JournalofEconomicGeography3:373388. Porter,Michael.2000.Location,Competition,andEconomicDevelopment:LocalClusters inaGlobalEconomy.EconomicDevelopmentQuarterly14:1534. Sass,M.,Szanyi,M.,Csizmadia,P.,Illessy,M.,Iwasaki,I.andMako,C.2009.Clustersandthe Development of Supplier Networks for Transnational Companies. Working Paper 187. InstituteofWorldEconomics,HungarianAcademyofSciences,Budapest. SRIInternational2001.TheIllinoisModelofTechnologyDrivenEconomicDevelopment. http://www.illinoisbiz/tech/pdf/cluster_overview.doc Tallman,Stephen,MarkJenkins,NickHenry,andStevenPinch.2004.KnowledgeClusters andCompetitiveAdvantage.AcademyofManagementReview29:25871. Tjakraatmadja, Jann Hidajat, Wicaksono, Agung and Lenny Martini. 2011 Knowledge Sharing in Indonesian Context: Institut Teknologi Bandung (ITB) as Potential Knowledge Hub To Create Value from Academia, Business and Government Linkages, in: Thomas Menkhoff, HansDieter Evers, Chay Yue Wah and Pang Eng Fong eds. Beyond the Knowledge Trap: Developing Asias Knowledgebased Economies, New Jersey: World ScientificPublishing2011. Weber, Alfred 1909. ber den Standort der Industrien. Erster Teil: Reine Theorie des Standorts.Tbingen:VerlagJCBMohr. Wong, PohKam & Ho, YuenPing & Singh, Annette 2007. "Towards an "Entrepreneurial University" Model to Support KnowledgeBased Economic Development: The Case of the NationalUniversityofSingapore."WorldDevelopment35(6):941958. Zook,Matthew.A..2004.Theknowledgebrokers:venturecapitalists,tacitknowledgeand regionaldevelopment.InternationalJournalofUrbanandRegionalResearch28:621641.

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