Progress made, but Singapore government still micromanaging

This year marks the tenth anniversary of the Ernst & Young Singapore Entrepreneur of the Year Award, the results of which were announced this week.

It also marks ten years since the Singapore government established an Economic Review Committee to fundamentally review the country’s development strategy, and formulate a blueprint for economic restructuring.

(Photo: The Parliament House. By Kojach)

The ERC published its report in 2003, and one of the key objectives identified was to make Singapore “a creative and entrepreneurial nation, willing to take risks to create fresh businesses and blaze new paths to success”.

This twin anniversary would seem to be an opportune moment to take stock of what has been achieved so far in the country’s efforts to become a ‘a creative and entrepreneurial nation’.

Let’s start with the positives.

No doubt, the landscape has changed. Literally. The whole one-north development has created a concentration of researchers, practitioners, and academics that is already producing creative results.

For example, an increasing number of INSEAD MBA students are choosing to work on projects coming out of the various research institutes that are now our neighbours, and I see this as a tendency that will continue to grow.

In more general terms, my experience is that young Singaporeans have taken to the idea of starting and running their own business with enthusiasm.

This can be seen in the number of new company registrations here, which has grown tremendously over the past eight years, but also in the number of entrepreneurship-related organisations that have sprouted up, such as SGEntrepreneurs.com, an online publication on entrepreneurship in Singapore and Southeast Asia, and e27, which organizes events and meetups in the tech startup space.

The universities and polytechnics here also have thriving entrepreneurial activities, and NUS organises the popular business plan competition, Startup@Singapore.

The Singaporean government has also been tireless in its efforts to support entrepreneurs.

These have ranged from financing schemes, through specially organised networking events to encourage mutual help and support, streamlined company registration procedures, a new look at bankruptcy laws, and a special work permit to smooth the path for would-be entrepreneurs from outside Singapore.

As a result, an ever increasing number of entrepreneurs are coming here to start their ventures.

Paradoxically, it is in the area of government efforts to help start-ups that the less positive elements are also found.

One constant complaint I keep hearing about government funding schemes is that they are a bureaucratic hassle. Many people have told me over the years that they don’t even consider these schemes precisely because of the hassle element.

This problem was particularly evident in the way the NRF incubator scheme was handled last year. The scheme itself is a great idea – create a series of Singapore-based incubators, mostly run by people with Silicon Valley experience.

Interest in this scheme was tremendous, and NRF had a large pool of applicants to choose from. They chose seven, but then proceeded to micro-manage the whole subsequent process, creating a huge amount of frustration and resentment.

In many ways, this tendency to micro-manage, accompanied by an arrogant ‘we-know-better-than-you’ approach, is the one area in which Singapore is still light years away from Silicon Valley mindsets.

This characteristic was well captured 12 years ago by Sim Wong Hoo of Creative Technology in his now famous ‘NUTS’ piece.

NUTS stands for ‘no U-turn syndrome’. Sim explained:

NUTS is when you want to do something and you seek approval of a higher authority. When there is no rule saying that you can do such a thing, then the standard answer is NO …

In the US, when there is no sign on the road, it means that you can make a U-turn. When the authorities do not want people to make U-turns, they will put up signs to tell you not to make U-turns. In Singapore, it is the reverse. When there is no sign on the road, you are not allowed to make U-turns. When the authorities allow you to make U-turns, then they will put up signs to give you that right.

The two different systems serve the same purpose – to better manage the traffic. They may look quite similar, just coming from different directions, but the social repercussion is significant.

- Chaotic Thoughts from the Old Millenium, Sim Wong Hoo, Creative Technology Pte Ltd, 1999

Much to the Singapore government’s credit, this message appeared to have been received and understood. In the then Prime Minister’s speech on National Day 2003, he said that henceforth, the default answer would be ‘yes’ rather than ‘no’.

However, the experience of the incubators last year would seem to show that the NUTS mindset is still very much alive and flourishing here.

This impression is further reinforced by severely critical comments made during a Q&A session with Dr Tony Tan organised just over two months ago by SGE. Amongst other criticisms made during the session, Dr Wong Poh Kam, NUS professor and an angel investor himself, 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.

An entrepreneur acquaintance of mine never tires of saying that the best thing governments can do to help entrepreneurs may simply be to keep out of the way!

In summary, then, there are both positive and negative developments in Singapore entrepreneurship. I’ve always thought that what Singapore had set out to do following the ERC report of 2002/3 would take any normal country a generation to achieve.

Singapore could probably achieve it in half the time, given its ability to change direction faster than other countries. On this timeline we are currently at year 8 out of 12.

Can Singapore maintain the impetus created while tackling the deeply ingrained mindset problems described above?

If it wishes to create a Silicon Valley style entrepreneurial environment here, it has no choice. It has to.

This piece was originally submitted to The Business Times (at their request), but they asked for the critical parts of the content to be ‘toned down’. The author has decided to publish it on SGE instead.

After spending ten years with Levi Strauss Europe, Patrick Turner left Levi’s in order to launch his own jeans marketing company, after which he subsequently acquired and managed another small company, both in Spain. Now, he is Affiliate Professor of Entrepreneurship and Family Enterprise at INSEAD and has been at the institution since 1999, specifically teaching MBA courses on acquisitions, new business creation, and managing growth ventures, on both the Fontainebleau and Singapore campuses.

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