Industry dynamics in Growth Triangles: the E&E industry in SIJORI 25 years on

Abstract

Launched in 1989 and encompassing Singapore, the Malaysian state of Johor, and Batam Island in Indonesia, the SIJORI Growth Triangle sought to market these territories as a ‘single investment destination’ offering differing factor endowments in close proximity. Singapore was the ‘core’ of the region; Johor and Batam occupied the land, labour, and resource‐intensive ‘non‐core’ spaces. During the 1990s, investment flows into the three territories, particularly in the electrical and electronics (E&E) industry, mirrored this division of labour. Through scrutinising trends in E&E firm entries, nationality, and industry branch in Singapore, Johor, and Batam for the 1993–2012/14 period, this article sheds light on the recent evolution of the E&E sector in the Growth Triangle. We document an increasing disconnect between the three nodes that has substantially reduced SIJORI's significance as an integrated industrial cross‐border region.

Transformation of Public Leadership in Indonesian Industrial Regions in the Last Two Decades

“…Based on an analysis of regional economic growth, Singapore is predicted to need surrounding areas to support its economy (Hutchison & Chong, 2016). Indonesia (Riau archipelago) which is over-labored will be used as a region for low-value, labor-intensive manufacturing (Hutchinson & van Grunsven, 2018). Singapore's idea was warmly welcomed by the Indonesian government and together with Malaysia, an economic growth triangle was formed by taking advantage of comparative advantage.…”

“…The idea of forming Sijori (Singapore-Johor-Riau) received strong support from Indonesian technocrats after failing to make Batam a base for oil refining and distribution. As oil production decreased and Indonesia was no longer an oil exporting country, Batam was transformed into an exportoriented industrial zone (Hutchinson & van Grunsven, 2018). The campaign to attract foreign investors was carried out on a large scale with various inducements such as cheap labor wages, a promising market for industrial goods, abundant raw materials and tax holidays.…”