Dyson’s Corporate Relocation to Singapore Has Nothing to do With Brexit And Everything to do With Singapore’s Pro-FDI Economy

From sucking up dirt to making environmentally friendly cars

UK entrepreneur James Dyson has long been at the forefront of innovative vacuum cleaners and related technologies, having pioneered a prototype of his famous baglesss dirt and scum sucking machine in the 1970s. Today, Dyson remains at the forefront of innovation not just in respect of vacuum cleaners but in respect of many other products ranging from heaters and hairdryers, to hand-dryers and bladeless fans. More recently, the Dyson company announced its plans to leap into the automotive industry when it was revealed that the company would begin production of a new electric car, slated to come off the line in 2021. Crucially, the new Dyson EV (electric vehicle) is to be made in Singapore, which has long been Dyson’s core manufacturing base.

While Dyson’s products are sold around the world, the company has since its inception had its corporate headquarters based in Britain. Today however, it was announced that 2019 would mark Dyson’s move to Singapore where the company plans to set up a new global world headquarters.

According to a press statement from the privately held company,

“An increasing majority of Dyson’s customers and all of our manufacturing operations are now in Asia; this shift has been occurring for some time and will quicken as Dyson brings its electric vehicle to market. As a result, an increasing proportion of Dyson’s executive team is going to be based in Singapore; positioning them to make the right decisions for Dyson in a quick and efficient way”.

But far from just moving its headquarters to Singapore, Dyson plans on radically expanding its research and development operations in Singapore.

A tale of two reactions to the same news

The way in which the Singaporean and UK media have covered the story could not be more different. In Singapore, the move is seen as a continued validation of the path towards economic modernisation that the country’s founder Lee Kuan Yew championed throughout his lengthy career. By allowing foreign direct investment (FDI) to flow harmoniously into the country, Lee was able to transform Singapore into a country with first world economic status in just over a decade after the country was forced out of a union with Malaysia in 1965.

Lee further realised that while FDI can help to create jobs and elevate living standards for local people, in the medium term, companies like Dyson would be able to being not just base line production but ultra-modern innovation to Singapore. In the long term, Singapore was designed to and rapidly became a hub for both domestic and FDI driven innovation. Singaporean entrepreneurs now stand at the forefront of global innovation and for that matter are often ahead of their counterparts in many counties that achieved modern first world economic status long before Singapore. This last element is due largely to the fact that Lee invested the wealth that FDI brought to his country into education and as a result, Singapore’s education system tends to rank number one in the world across multiple surveys.

Because of this, Singapore has been able to maintain a balance between a powerful domestic economy fuelled by indigenous talent and that fuelled by foreign innovation through the dynamism of FDI. In fact, this relationship between local capital and FDI is so harmonious that it could be said that in Singapore, such things actually work in tandem throughout the country’s exciting marketplace.

Britain in denial 

But what is being hailed as a triumph in Singapore has been met with distress across much of British social media. The narrative in the UK is that Dyson’s move away from Britain and to Singapore is due to the controversial attempts by the British government to exit the European Union in line with a referendum in from 2016.

But the reality is quite different. Whilst some UK firms and foreign firms with major operations in the UK have left Britain over fears of being cut off from the EU Single Market, such firms have relocated to other European Union countries. Clearly, this does not apply to Dyson as Singapore is on the other side of the earth vis-a-vis Europe.

Clearly, Dyson’s management are aware of the fact that as western markets may well have reached their peak, Asian markets continue to rapidly expand and will continue to do so over the long term, even if 2019 brings in the mini-recession that some have feared. As Singapore weathered both the 1997 Asian Financial Crisis and the 2008 Great Recession better than most other countries in the world, Singapore offers a sturdy pair of economic hands in uncertain times.

Secondly, whilst Dyson remains committed to keeping its existing UK facilities operational, these facilities will be dealing mainly with sales and maintenance and less with innovation. Here, Dyson’s choice of Singapore, home to many Dyson operations long before the phenomenon of Brexit existed, speaks volumes. Any company keen on radically expanding its product line will necessarily seek to do so in an environment that fosters such forward thinking. In the case of Dyson’s drive towards the EV market, Singapore is naturally a good choice as Asia is at the forefront of the EV market whilst Singapore in particular has long pioneered forward thinking transport options.

Finally, arguments about “offshoring” due to lower wages also does not conform to the facts in respect of Singapore vis-a-vis Britain. This is the case as the average factory wage in Singapore is S$34 per hour, the equivalent of £GDP19 or $UDS25. By contrast, the average factory wage in Britain is £8.22 per hour or just barely over $10.

Conclusion

Therefore, it was not an artificial push of Brexit that drove Dyson’s corporate headquarters to Singapore. It was instead the magnetic pull of Singapore that has attracted Dyson along with hundreds of other major businesses from around the world. To say otherwise is supremely arrogant as it is to deny the great achievements Singapore has made since the 1960s – before Britain was part of the EU’s predecessor body, the EEC.

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