The key to success in encouraging innovation and entrepreneurship in Singapore is to change the way the country nurtures its young.
By Laurence Lien, Published The Straits Times, 1 Mar 2014
SOME time back, I visited an ex-classmate at a tech giant’s headquarters in Silicon Valley. He had done extremely well for himself, having been one of the company’s first employees.
He told me that the Singapore Government had been trying to woo him back to Singapore for years. But he wondered why Singapore was going for people who had made it big, like him, since he no longer had the fire to generate new technological breakthroughs. Instead, he argued, Singapore should be wooing the young staff in his company. They were bright, hungry and driven.
Singapore’s problems
UNFORTUNATELY, he felt that Singapore had two huge problems working against it. One, it was too expensive for these young, modestly paid innovators to afford the lifestyle they were accustomed to. Two, Singapore lacked the creativity culture and an ecosystem to support innovation.
For years, Singapore has been trying to make its economic model more knowledge- and innovation-driven. We have also been heavily promoting entrepreneurship. But have things really changed?
There is some cause for optimism. Singapore was ranked 10th among 60 countries in the Global Entrepreneurship and Development Index (GEDI) 2012.
We scored extremely high on aspirations as our ecosystem does encourage new ventures to grow.
On other measures, though, the prospects look less sanguine. According to the Gedi report, Singaporeans lack the ability to perceive opportunities. It suggests that they also lack confidence in their abilities and that endeavours here are more imitative than innovative.
In 2009, the Singapore Competitiveness Report released by the Lee Kuan Yew School of Public Policy also concluded that entrepreneurship remains relatively low. Singaporean companies, it said, are likely to remain small as they focus on serving the local market rather than existing or emerging export sectors.
Overall, there is insufficient business interest in creating new products that produce new value and that are potentially game- changing. Nascent entrepreneurs here may not get much inspiration from older role models. Two-thirds of our billionaires, on last year’s Forbes list, are in the finance, real estate and retail sectors. This is quite different from the Forbes list of leading creative economies, which have many billionaires from the health-care, technology and lifestyle sectors.
The search for solutions
HOW then should we encourage more entrepreneurship and innovation?
First, I think we must promote the right values and motivation. We first have to speak the right language. Highlighting the potentially large extrinsic rewards of entrepreneurship is barking up the wrong tree. If one’s primary desire is to be wealthy, one should avoid starting a new business. It is much easier to pursue a high-paying conventional career in the financial sector.
Research on entrepreneurial motivation holds surprises. Professors Xu Hongwei of Insead and Martin Ruef of Duke University showed through their research on a large data set of nascent entrepreneurs in the United States that non-pecuniary motivations are actually more important than monetary motivations for people who start new businesses.
These entrepreneurs want autonomy – to be their own boss – and identity fulfilment. In other words, they want to develop and challenge themselves and establish an enduring personal legacy. They could be growth entrepreneurs, having a grand vision about a product or service, or lifestyle entrepreneurs, people who pursue a particular passion or lifestyle.
Entrepreneurs are different
HOW do we get more growth entrepreneurs? I believe they must be driven by intrinsic, rather than extrinsic, motivations. They must want to create new value and make a difference. They must be fired by idealism. They ought to study philosophy rather than business management.
Secondly, we need a culture supportive of entrepreneurship. We need to celebrate all entrepreneurs, not just the successful ones. It must be respected as a legitimate profession.
Instead, pragmatism dominates in Singapore. Parents and peers often frown on the path less trodden. This is particularly so in Singapore, where there are more good, safe jobs than Singaporeans.
Canadian writer Malcolm Gladwell in his book David And Goliath talks about innovators having to be open, conscientious and dis agreeable. This does not mean being obnoxious or unpleasant. Instead, it means being willing to take social risks, to do things that others might disapprove of. This is especially difficult in Singapore because
Singaporeans are generally perceived to be reluctant to operate independently and challenge conventions.
If we want a more entrepreneurial generation, we need to change how we bring up our young. We have to inject more diversity in our education system – using different teaching styles for children. We should encourage them to speak up and initiate their own learning. We should also provide them with opportunities to pursue non-academic interests as passionately as academic ones – with the support of their parents.
Lastly, we must encourage our young to try and experiment (and fail) early. I see hope in our young – with many more today wanting and trying to use entrepreneurial ideas to create sustainable impact.
Here, we need to develop the social ecosystem to support our young entrepreneurs; this includes mentors, skills, tools and communities.
New ecosystem needed
ONE problem I see is that young innovators may be too disconnected with their target communities. Conversations I have had with venture capitalists, as well as my own experience, suggest that many Singaporean would-be innovators focus on producing products similar to those already on the market. They also fail to carefully consider the sort of customers they want to attract.
Such entrepreneurs need to be more immersed in strategic issues and their target communities in order to gain deeper perspectives.
They need to understand how people use and relate to products and services, and what problems they have that need to be solved. If they want to serve the region, more time should also be spent in neighbouring countries learning their languages.
Entrepreneurs also need a community and affordable infrastructure to support that community. Plug-In@Block 71, located in Ayer Rajah industrial estate, is a successful model of what is required.
It is a low-cost “incubation community” housing a critical mass of start-ups and investors in Singapore. They are able to network serendipitously to exchange and build ideas, and to support one another.
More such clusters are needed. A young entrepreneur’s journey is often a lonely one, whether in a new or existing firm. But they need to be around others who are both aspiring and experienced. They also need to be able to do more than just scrape by.
Maybe then, Singapore can be host to the future Koums and Actons (Jan Koum and Brian Acton are founders of instant messaging service WhatsApp), fermenting the next disruptive innovation.
The writer is a Nominated Member of Parliament, chief executive of the National Volunteer and Philanthropy Centre and chairman of the Lien Foundation.
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