Blog Challenge #1

Investing in consumer goods will only bring current satisfaction, it does not bring us wealth in the future. Scarcity has unlimited wants and needs but limited resources which unable to satisfy consumer needs. With more production of capital goods is like a basic act of investment. However this requires sacrificing current satisfaction but it enables more production later. This makes scarcity less of a problem later which also will help boost the economy in the long run.

For Singapore, as Singapore's main strength lies within its manpower resources, Singpore have to improve its manpower to stay competitive.
However, because manpower falls under both categories of labour and human capital, the singapore government feels the need to improve the the capabilities of the manpower, in a way investing in capital rather than focusing on producing goods. As Singapore has limited land (scare resource is Land), and it has to rely on entrepreneurship and capital and labour to survive. Producing consumer goods is not a good strategy for Singapore's economy. With an improvement in capital the PPC graph of the the production will increase.

We must shift to achieving GDP growth by expanding productivity rather than the labour force. We must boost productivity in order to stay competitive, upgrade the quality of jobs, and raise our people’s incomes. A slower growing workforce makes it all the more important for every enterprise to innovate to create more value, and to maximise the potential and performance of every worker. This shift to productivity-driven growth will require major new investments in the skills, expertise and innovative capabilities of our people and businesses over the next decade. We have significant room to improve productivity in every sector of our economy. 

In absolute levels, Singapore’s productivity in manufacturing and services are only 55 to 65 percent of those in the US and Japan (see Figure 1).

                            Fig. 1 Comparisons of Services & Manufacturing between different countries


- REPORT OF THE ECONOMIC STRATEGIES COMMITTEE (http://app.mof.gov.sg/data/cmsresource/ESC%20Report/ESC%20Main%20Report.pdf)


For United States, there is a need to maximise the potential of the resources of Factors of Production in which this case would cover all four factors (Capital, Entrepreneur, Land, Labour) where the examples below will show how US plan to do it to boost the economy in the long run

Invest in the Building Blocks of American Innovation

-       Spurring the innovations that will drive America’s future economic growth and competitiveness requires critical investments in basic foundations: workforce, scientific research, and infrastructure.

·         Educate the next generation with 21^st century skills and create a world-class workforce

·         Build a leading 21^st century infrastructure

·         Develop an advanced information technology ecosystem

Promote Market-Based Innovation

- New ideas are proven, commercialized, and diffused. It is imperative to promote a national environment ripe for innovation and entrepreneurship that allows U.S. companies to drive future economic growth and continue to lead on the global stage.

·         Support innovative entrepreneurs

·         Promote innovative, open, and competitive markets

Catalyze Breakthroughs for National Priorities

- Priorities include developing alternative energy sources, reducing costs and improving care with health IT, catalyzing advances in educational technologies, and ensuring that the U.S. remains on the leading edge of the bio- and nanotechnology revolutions.

·         Drive breakthroughs in health care technology

·         Create a quantum leap in educational technologies

(http://www.whitehouse.gov/innovation/strategy/executive-summary)