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singapore CIT climate
An overview of Singapore CIT Climate
Singapore government's IT drive

3.3 An overview of the Singapore CIT Climate

Brief history of cyber-Singapore

Technology is advancing not just in the media field. The IT revolution is changing the way people live and work, in other words, altering the way societies are structured. The world including East Asia, is an interesting and challenging period of change as news and information penetrate national frontiers.

Senior Minister Lee Kuan Yew, Asian Media Conference,
Los Angeles, 29 October, 1998
(The Straits Times 2 November 1998)

Singapore's drive in adopting new technologies can be traced to its geography and political history. Just like the three other East Asian Tigers - South Korea, Taiwan and Hong Kong, Singapore's economy was devastated by "war and geopolitics, with no domestic market, or natural or energy resources without industrial tradition or technological basis" after World War Two (Castells 1998, p.244). Their post-war success could be attributed to their ability to "assimilate, use and enhance new information technologies focusing on the technological overhaul of the countries' industries, management and labour" (ibid).

In 1959, Singapore gained self-government under the People Action Party's Lee Kuan Yew who became the first Prime Minister and his party has ruled since. Four years later, in 1963 Singapore merged with Malaya to form the federation of Malaysia based on the belief that it was too small to survive on its own. However in 1965 Singapore separated from Malaysia to become a sovereign nation and over the past 34 years has transformed itself into a technological leader with a strategic infrastructure plan. Its geographic location on the southern tip of the Malay Peninsula has allowed Singapore to become one of the world's busiest ports. Trade is a major economic backbone and banking and finance formed the biggest economic sector commanding 30 per cent of the 1997 economic pie (Kuo & Ang 1998, p.3).


In the 1970s, the Singapore government's priority was to internationalise and industrialise by inviting foreign investment and building key infrastructure. Singapore's infrastructure and industrialisation developed its foundation as a sound business centre and gateway for economic entry into Asia, which has been crucial to its survival and in attracting foreign investment. This has resulted in the World Economic Forum Global ranking Singapore's infrastructure best in the world in its 1998 competitiveness report. (Ng 1999 p.42)

A look at Singapore's economic history reveals that a critical factor contributing to Singapore's growth from 1965 - 1984 was the input of capital from direct foreign investment forming 10 - 20 per cent of GDP and the exceptional growth of national savings which reached 42 per cent of the GDP in the mid-1980s. Much of these savings were generated by the public sector through the Central Provident Fund, a compulsory social security scheme imposed on its population (Castells 1998, p.247). Set up in 1955, the scheme provides financial security for workers and has evolved into a comprehensive social-security savings system, taking care of a member's retirement, home ownership and healthcare needs and insurance (Central Provident Fund Board Online 1999).

In the 1990s Singapore restructured its economic base towards high-value manufacturing. Although its stability, skilled labour and efficiency remained attractive to multi-nationals, production costs were higher compared with other countries in the region. To maintain a 25 per cent manufacturing contribution to GDP, the government invested heavily in research and development and wafer production of advanced chips throughout the 90s. Furthermore, Singapore has embarked on a policy of "economic liberalization and internationalizing, gradually transforming Singapore into the technological, financial and business services centre of South-East Asia" (ibid p.248).

Currently, Singapore has a density of 5,965 people per square km and a population of 3.8 million. English is the primary language, and its citizens are 77 per cent Chinese, 15 per cent Malays, 7 per cent Indians and 1 per cent Eurasians and other races with a literacy rate of 93 per cent (Singapore InfoMap Online 1998).

Technological Development

Academics at the National University of Singapore were the first to have a taste of the Internet in 1990. Two years later, Technet was set up, making the Internet available to the rest of the research and development community and in 1993, the National Computer Board, the National University of Singapore and the Ministry of Education introduced the Internet to schools (Tan, Teo & Goh 1997, p.1 - 2).

With the launch of Singnet in 1994 as its first commercial Internet service provider (ISP), Singapore became the second country in South-East Asia, after Malaysia to offer public Internet access. In March 1995, Singapore became the first country in the world to have a national Internet website - Singapore Infomap ( In September that year, Technet became Singapore's second ISP after being privatised and renamed Pacific Internet. In July 1996, the Singapore Broadcasting Authority announced new rules and the Class Licensing Scheme to censor the Internet. This raised concerns in the international Web community that Singapore intended to censor and control the Internet. Under this scheme, affected web operators need a licence to operate. SBA's self-regulation policy since 1998, requires the four ISPs (including Cyberway and DataOne formed in 1996 and 1999 respectively), to offer a Family Access Network (FAN) since 1998. FAN can block about 200,000 pornographic sites (Tan, Teo & Goh 1997; & Kuo and Ang, 1998).

At the time of writing Singapore Cable Vision (SCV), was seeking an ISP licence (Lee and Birch 2000, p.2) and Cyberway was renamed Starhub Internet (SI). In December 1999, SI shook the Internet access market by announcing Singapore's first unlimited free-surfing plan (without e-mail access). Within the first two days of its launch, SI signed up 38,000 new subscribers (Wee 1999, IT@AsiaOne) and in response established player SingNet offered its 250,000 subscribers free Internet access with e-mail (Eng 1999, IT@AsiaOne). The other player PacNet, however slashed its access rates by 70 per cent (Teh 1999, IT@AsiaOne). At this early stage, the full impact of the ISP war is difficult to implicate.

In March 1995, Singapore demonstrated its ability to harness the benefits of technology in typical Singapore fashion by becoming the first country in the world to host a national Internet homepage with the launch of Singapore Infomap (Kuo & Ang 1998, p.16). But as quickly as it received accolades for its speedy embracing of technology, Singapore also elicited strong criticisms when it announced a new regulatory framework in July 1996 for the policing of Internet content, something which the vast majority considered impossible to regulate.

Singapore's Internet penetration rate is one of the highest in the world with close to 600,000 Internet users as of February 1999. It is important to note the actual number of local users should be much higher as this figure does not include those who access the Internet from schools, offices and other public places making one out of every five Singaporeans an active Net user. In the area of mass media and (tele)communications, Singapore's tele-density stands at about 55 per cent, with cellular and television penetration at almost 33 per cent and 98 per cent respectively (with almost 50 per cent of these households owning two or more TV sets). More than 75 per cent of Singapore's 850,000 households own video recorders (VCRs), and personal computers (PC) penetration stands at 53 per cent (Lee and Birch 2000, p.7). An indication of Singapore's WWW culture within its business environment is the fact that there are almost 13,000 websites whose domain name ends with .sg, and of these, close to 8,000 are operational (Maria 1999, Straits Times Interactive)

A recent Information Society Index (ISI) study by International Data Corp (IDC) and World Times Inc, specialists in analysing critical global issues through The World Paper publication, has predicted Singapore to be the world's second most dominant information economies by the year 2002. It is predicted to surpass Sweden and Finland, which are currently ahead of Singapore while the United States remains at the forefront. In this survey Singapore was ranked first in 1998 and predicted first in 2002 for Internet usage and infrastructure (Chellam R. 1999 p.2). This research includes forecasts through the year 2002 for 23 variables spanning four infrastructure categories - information, the Internet, computer and social indicators.


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