E-Business in Singapore and the Eight Key Factors

Singapore is a unique country. Whilst geographically situated in the East, much of its culture has been strongly influenced by the West. Yet as a very conservative society, preferring conformity and obedience to individuality, Singapore differs considerably from many Western democracies. Singaporeans have a general belief in working together for the good of the country, despite the clear division of the population into three major ethnic groups (Chinese, Malays and Indians/Pakistanis). Operating under a single system of government and sharing English as a common business language, each of the major ethnic groups has managed to retain distinct cultural traditions. National citizenship, however, always comes before ethnicity. The direct result of this approach is that it eliminates many of the cross-cultural business issues one might expect when undertaking business. Singapore also has the advantages of a well-educated and technologically literate workforce, essential for the wide-spread successful adoption of e-business.

Over the past decade, Singapore has strived to become an international electronic business center where Electronic Business transactions from the region and around the world are processed. It now controls the necessary infrastructure to support an international transactions hub and is well-connected to the rest of the world. The legal infrastructure for electronic commerce is also in place. The Singaporean Government has worked closely with business and industry to create a safe investment environment. Together they have built the necessary infrastructure required to become a digital economy, where buying and selling can be done completely electronically. The government is continuing to review policy and regulatory issues relating to such factors as electronic identification, payment, electronic business policies, and security. Some of the country's achievements are as follows:

Legal

The Singaporean government is committed to creating an environment of trust, predictability and certainty so that companies can feel safe and secure in conducting their business online. The Singapore Electronic Transactions Act (ETA), instituted on July 10, 1998, deals with the legal aspects of electronic contracts, the use of digital signatures, and concerns for authentication and non-repudiation. It covers the use of electronic applications, licenses for the public sector and the liabilities of service providers. The Evidence Act, amended in 1997, allows for the use of electronic records as evidence in the court. To protect knowledge and intellectual capital, the Copyright (Amendment) Bill was passed in 1999.

Network Infrastructure

The Singapore Telecom Internet eXchange (STIX) is an Asian Internet Hub connected to more than 15 countries in the Asia-Pacific Rim and the European Internet backbone. Singapore also has a 45 Mbps direct Internet connection to the US Internet backbone. Internally, Singapore ONE provides an ATM backbone and broadband access to homes, libraries and kiosks. The Infocomm Development Authority of Singapore (IDA) Infrastructure for Electronic Identification (IEI) initiative provides required secure communication and identification using digital certificates and digital signatures.

Taxation

Singapore has a clear policy on Goods and Services Tax (GST) relating to online business. All physical goods supplied over the Internet and goods delivered locally attract the present rate of 3 percent GST. Exported goods are not charged GST. If the supplier is from overseas and the value of the goods exceeds $400 (Singapore), then the GST does apply.

Payment

The commercial deployment of SET (MasterCard and VISA) was initiated in March 1998. CashCard for Open Network E-Business (C-ONE) was launched in January 1998. This innovation by the Network for Electronic Transfers (NETS) makes Singapore among the first countries in the world to introduce a smart card-based payment system in cyberspace. According to Chua (2000), online payment in Singapore is secure. There are sufficient mechanisms in place to ensure that information transmissions are safe.

Customers

According to Tan (2000), the consumer can buy just about anything online from Singaporean retailers: from books to durians, alcohol to Nonya beaded slippers, and groceries to watches.

Vendors

While many Singaporeans are already surfing and buying from vendors abroad (for example, Amazon.com), demonstrating their acceptance of e-business, many local online vendors have not yet developed a web strategy and require help in this area.

Several e-business services now exist, including online payment, security and bureau services.

In summary, the Singaporean Government has played an active role and succeeded in providing the legal infrastructure, safe investment environment and excellent technological infrastructure required for e-business to flourish.