Hard infrastructure refers to the physical assets put up to support an economy and its enterprises. Transport network, energy production and distribution, telecommunications and water management are examples of hard infrastructure.
Soft infrastructure refers to both physical and non-physical assets that are used to provide the public with specialized services. Examples include cultural attitudes, legal system and financial system (Niskanen 233).
In terms of education and skilled labor Singapore has been able to set itself apart as an education hub in Asia (“Developing Asian Education Hubs”). Singapore has also consistently ranked in the top five in reading, science and mathematics globally.
The country’s top two universities are ranked in the top 50 worldwide. Every year about one million graduates leave Indian technical colleges. The country has one of the highest numbers of technically skilled graduates in the world (Nandakumar Para 4). Technical know-how has made both countries attractive to foreign interested in setting up shop.
The capital markets in India are ranked 17th globally as regards their financial sophistication. The telecommunication sector is also the fastest growing in the world.
According to a 2010 report Singapore was the fourth largest financial centre in the world. Forex, derivatives, stocks and lending have all played a major role in the growth of Singapore as a financial hub (City of London 8). Singapore also has high telecommunications connectivity. And just like in India’s case this is a source of competitive advantage.
The Singapore Port is considered one of the most efficient and busiest in the world. On the other hand Mumbai, India’s largest port is marked by inefficiency. This is attributed to the poor transport network around the port plus poor operations management (“Mumbai Port Profile”).
In terms of governance infrastructure India has struggled with issues of corruption, terrorism and religious unrest. India has continued to rank poorly in the Corruption Perception Index by Transparency International.
Corruption increases bureaucracy, complicates taxes and makes it a challenging place to do business. Singapore has one of the lowest corruption levels in the world. Low corruption, political stability among other factors are why Singapore continues to top in the World Bank’s ranking of favorable places to do business. In the 2012 report India was ranked poorly at 132nd (“Doing Business Rankings”).
Despite the issues discussed above, India has established itself as one of the BRIC Economies. This is a grouping of the major emerging economies in the world. However the country will have to tackle political, religious and social issues so that it’s soft and hard infrastructure can be as efficient and effective as Singapore’s. There is therefore need for increased and sustainable infrastructure investment in India.
City of London. Global Financial Centers. London: City of London, 2010. 8. Print.
“Developing Asian Education Hubs.” EAHEP, 2013. Web.
“Doing Business Rankings – World Bank Group.” Doing Business, 2013. Web.
“Mumbai Port Profile.” Mumbai Port, 2013. Web.
Nandakumar, Indu. “Number of tech graduates swells; salaries at IT firms stay stagnant.” The Economic Times. 24th November 2011. 2011. Web.
Niskanen, William A. “Soft Infrastructure of a Market Economy.” The Cato Journal., 11. (1991): 233. Print.
“Transparency Corruption Perception Index.”Transparency Intenational, 2013. Web.