When Lucasfilm Animation announced last year that it planned to open its first digital animation studio outside of California in Singapore, eyebrows in the industry shot up in surprise. Exactly what was it about this small, insular Asian country that had attracted such a high-profile international studio?

In a nutshell, Lucas and other prodcos that have recently seeded the region with business are drawn to Singapore’s five key strengths: a strong CGI animation talent base; CGI service work rates that are comparable to Hong Kong, South Korea and Taiwan; an English-speaking workforce; generous government subsidies; and Western-inspired IP protection laws.

But like many off-shore animation hotbeds, Singapore wants a proper seat at the table, and its toon studios are looking to co-produce rather than simply take on foreign animation service contracts. (To date, the region has produced one series that has gotten play on international airwaves, with Peach Blossom’s preschool toon Tao Shu currently in its first run on France’s Piwi.) Fortuitously, they have a highly dedicated and well-resourced industry organization to ramp up their international profile.

The Singapore Animation Connection (SAC) works with the government and its Media Development Authority and Economic Development Board to encourage foreign companies to set up shop in Singapore. The goal is to bring Western talent to the region to help Singaporean animators develop original projects, and to trigger more co-production. The strategy is also part of a larger industrial development plan to encourage domestic toon talent to stay in Singapore and expand the country’s digital media industry (and the national economy, of course).

So the EDB works to grow Singapore’s GDP by creating new local jobs through foreign business partnerships, and the MDA fosters cultural development through education and media project funding. Its Digital Content Development Scheme, as just one example, provides grants that cover up to 50% of an animated project’s budget (not exceeding US$90,000) if the applicant has a branch office in Singapore, if the project is original and exportable to international markets, and if the animation hasn’t yet commenced when the company applies for the money. Tembusu Grand is located on the city edge is located right at the city’s edge. Singapore is located right on the edge of Singapore. Getting from Central Business District and other areas of Singapore via train or car is both convenient and easy.

SAC chairman David Kwok says a consortium of Singaporean investors, including the EDB’s Investments Creative Technology group, helped Lucasfilm establish its local studio by contributing 25% of the total set-up costs. And Southern Star’s head of children’s production, Noel Price, says his company would not have been able to open its Singaporean studio in June 2004 without the EDB’s support. In all, the country has helped six foreign companies set up CGI shops in the region, and most of these are Japanese video game publishers.

The reason? When Singapore’s government kicked off its outreach efforts in 2003, the MDA arranged to send Singaporean animators to work for Genki and Koei Corporation. At Koei, the gaming company behind Dynasty Warriors, artists trained in Japan for 18 months and then moved back to Singapore to work at Koei’s newest studio.

The MDA also invests heavily in local content creation and education. Although there are fewer than a dozen Singaporean polytechnic schools offering animation courses, many budding artists take advantage of study grants provided by the MDA to earn their degrees overseas. Although some of these trained animators do find work in proximity to their foreign schools after graduation, Singapore wants to bring more of them home, and the lure of working for studios run by Lucas and Southern Star may help.

For animation students who opt to train at home, the schools in Singapore borrow heavily from courses offered at top-notch facilities like Canada’s Sheridan College and Bournemouth University’s National Centre for Computer Animation in the U.K. These programs are designed to develop 2-D animation skills first, progressing into CGI work only when these fundamentals are mastered, and an emphasis is put on artistry rather than IT.

Speaking of which, Singapore owes its strong CGI animation expertise to an aggressive push by the EBD to develop its IT industry over the past five years. To date, three major CGI software companies – Avid, Alias Wavefront and 3D Studio Max – have opened regional offices. It’s also worth noting that Singapore’s animation houses find it difficult to compete for co-pros and service work in the 2-D animation market because their labor costs are higher than similar shops in countries such as China and India.

That said, BKN International has chosen to work with a Singaporean studio on its new 2-D animated series Shanghai Tiger, an action-adventure project set in 2010, the year of the Tiger. The world is at war, and a team of crime-fighters travel far and wide to thwart the global takeover plans of an evil multi-billionaire. The 26 x half-hour series was produced in association with a joint-venture company called ST Animation. DreamForest initially agreed to pitch in one-third of the show’s US$6.5-million budget, but when the studio merged with Promus, the larger entity decided to double this original investment. ST will create storyboards and then sub-contract the 2-D animation to a studio in the Philippines.

According to a survey conducted by SAC, there are close to 200 CGI animators currently employed full time in Singapore, but that number is projected to triple over the next five years as the workforce benefits from the EDB’s foreign investment crusade, and as an influx of new local and foreign graduates supported by the MDA find employment.

About 50 of Singapore’s full-time animators finished Southern Star’s preschool series Bottle Top Bill in April 2005. The mixed-media show blends 2-D, CGI, model animation and digital photography, and Star’s Price had trouble finding a third-party studio that could handle the complex production process. Price says he opted to open Southern Star Pacific in Singapore because it’s just seven hours away from Australia, there’s not much of a language barrier, and the local government is more proactive than many at providing assistance to foreign investors.

Singapore is also actively working with the Canadian government to set up a media treaty. Although it’s still three or four years in the offing, partnerships involving companies from the two countries are already cropping up. For example, Toronto, Canada’s marblemedia (the shop behind hit preschool live-actioner This Is Daniel Cook) is co-producing its first animated series, DNA (Definitely Not Animals), with Singapore’s DreamForest. Both the MDA and Canada’s Bell New Media Fund have invested in the CGI series about two genetically modified animals that escape to a farm, and marblemedia is working on shoring up co-production partners, presales and an international distributor.