Entrepreneurs and investors pour grievances during Dr Tony Tan Q&A

 

For half-an-hour, Singapore presidential aspirant Dr Tony Tan sat under the spotlight, his glistening white mane emphasizing his 71 years of age and extensive experience in both the private and public sector.

Displaying the calm and measured demeanor of an elder statesman, he took in a barrage of questions from 30 odd entrepreneurs and investors regarding the state of innovation in Singapore. Held at The Pigeonhole Cafe on August 3, the question and answer session is part of a regular SGE event called Chillin’ With — which gathers innovators in a casual setting to connect with one another. The moderators were SGE chief editor Gwendolyn Regina Tan and lead developer Isaac Timothy Tay.

Photo: This is not the first time Dr Tony Tan (left) has engaged entrepreneurs like Gwendolyn (center) and Isaac, co-founder and lead developer of SGE respectively.

Feedback from the floor was congenial at first, and then became more candid, sincere, and hard-hitting as the evening wore on. It was, after all, a rare opportunity to meet with a former deputy prime minister and potential president.  In Singapore, the president serves a mostly ceremonial and symbolic role with little executive authority, although they wield soft power. The elections are scheduled for August 27.

While many issues were raised, two resonated most with the crowd. One major bugbear was what they perceive as the poor implementation of government funding for startups. Aileen Sim, co-founder and CEO of First Meta, cited her example. While her company has benefited from some government grants, it has also “suffered damages” from others.

“And speaking with at least ten other entrepreneurs I know that have taken government grants, the general consensus is that…they sound very generous and they’re great, and they’re well meaning, well-intentioned. However, a lot of times the execution of it ends up having unforeseen side effects,” she said.

For example, while startups want to spend as little money as possible in their operations and product development, they will receive more reimbursement from the government agency only if they spend more.

Dr Tan acknowledged this as one of the weaknesses of government funding in startups, which sees a clash between the need for civil servants to account for public money and the need for entrepreneurs to have free rein.

“That is where we have to try to move towards an ecosystem where there is eventually more money from private sector, from various funds, so that different people can exercise judgment,” he said.

He did highlight, however, that the Singapore National Research Foundation’s model does mitigate the bureaucratic problem. Through its NRF TIS scheme, the foundation funds a startup on a 50-50 basis together with a venture capitalist. This allows the NRF to piggyback on the VC’s expertise as well as vested interest in seeing his funds generate returns.

“I think this type of arrangement is much more effective than having a group of civil servants sitting around in a committee trying to decide whether startup A or startup B will succeed,” he added.

However, Dr Wong Poh Kam, an angel investor and professor at the National University of Singapore Business School, pointed out that the government still micromanages in their involvement with investors.

“You spend a lot of time trying to convince the bureaucrats that some of these rules do not work,” he added.

Terence Swee, founder and CEO of Muvee, also shared his troubles with government funding. After securing series A funding from the now-defunct Temasek Capital in 2002, he was rejected by another grant simply because he did not meet the requirement that at least 50% of the company was in Singaporean hands.

What was vexing, however, was that the many of the shares were foreign simply because they were held by Temasek Capital through a BVI vehicle.

“You can’t get more Singaporean than that,” he quipped.

Switching gears, Terence highlighted the second major issue — Startups have difficulty attracting talent in Singapore, and the government may have to shoulder some of the blame. Although they are actively encouraging entrepreneurship in the country to “let a thousand flowers bloom”, the government is also working hard to attract the Googles and LinkedIns of the world to set up shop in Singapore by giving them tax breaks.

Here’s the problem: These companies would come to Singapore to hire, say, 200 engineers, but there simply isn’t enough talent to go around. As a result, they poach staff from startups who can’t afford attractive pay packages.

“Maybe you’re 30 plus years old and you’re still working at a startup and you’re kind of underpaid. At some point, if somebody comes and double your salary, you’re like: I’ve got two parents, I’m the only son; It’s a tough choice. You have bills to pay, you want to buy a condo and your Toyota Corolla.”

“It will be better if you tell Google that if they come in, they must bring in 200 of their guys, and let us poach from them. And then you get your ecosystem. Right now they are emptying out the vessel,” Terence said.

Therefore, despite the displeasure among some Singaporeans towards foreign workers, he believes that more radical steps must be taken by the government to attract them.

In response, Dr Tan echoed his views that labor shortage is a problem the government has to manage. Indiscriminately bringing in MNCs also have the side effect of driving up labor costs since they can offer more attractive renumeration and force other companies to match them. And already, the cost of doing business here is already among the highest in the world, noted Dr Tan. So if the cost goes up too much, doing business in Singapore would not be viable.

“Agencies and ministries like MTI (Ministry of Trade and Industry) and EDB (Economic Development Board) who are responsible for bringing foreign investments here should keep in mind the limited pool of labour which is available,” he said, even as the government is trying hard to train and educate more Singaporean workers. Overall, Dr Tan expressed that while no system is perfect, Singaporeans are already quite fortunate. Unemployment rate is very low, whereas in Spain it could go up to 15 to 20%.

While he certainly got an earful from the audience, some lingering doubt remained over whether feedback collected by the government would amount to anything.

Tay Eu-Yen, co-founder of nightspot The Butter Factory (read our interview with them), has felt let down by the government’s past attempt to gather feedback. She asked Dr Tan if communication channels could be improved, and he replied:

“Well, we’ve got the feedback channel. We’ve got committees set up by the government from time to time. I don’t know how effective this is…”

“Not effective,” interjected an investor in the room. Everyone nodded and laughed. “It’s done to say: ‘we’ve done it.’”

To reinforce the prevailing sentiment, Yen talked about her futile involvement with the Ministry of Manpower’s consultation for a white paper for health and safety rules.

“I think at the end of it unfortunately it wasted a lot of the industry’s time because there were no changes, and the white paper passed without amendment anyway,” she said.

Nonetheless, Dr Tan remained diplomatic and cited this event, which will be put online in video, as an example of a feedback channel.

“I think it will be very good for some of our ministers actually to listen in. I may even go one step further and recommend the Minister for Trade and Industry or Minister of State to come and have a session with you all. This kind of session is helpful to policymakers and they’ve got to make time and effort to come here,” he said to an approving audience.

With just a few minutes to spare, the moderators squeezed in one last question, this time on something more personal: What is your greatest regret?

“Many of them. Maybe a small thing is… my father died very young, well (before) the stage when Singapore was growing, so I think he never saw all of the great things we’ve done, he never got to see his grandchildren, great-grandchildren. I think that’s a pity; my mother was more fortunate, she lived to a ripe old age. At the end of the day, the things that give you the greatest joy, the greatest regret, are always the personal things, nothing else can substitute for that.”

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