Finding the Golden Path: Can Singapore be a Silicon Valley?
March 29, 2006 by Bernard Leong
Filed under Entrepreneurship & Enterprise, Innovation & Technology, Special Commentary
Can Singapore be a Silicon Valley? We review the trends and issues what kind of technology cluster we want to become.
“To put the world right in order, we must first put the nation in order; to put the nation in order, we must first put the family in order; to put the family in order, we must first cultivate our personal life; we must first set our hearts right.”
- Confucius
The present Singapore Entrepreneurial Scene
Can Singapore be truly become a Silicon Valley within the next decade? To begin, a few interesting indicators have emerged as to why we should ask this question now. First and foremost, is the increasing entrepreneurial activity that has emerged from the Global Entrepreneurship Monitor 2005 report. The figure clearly shows that the entrepreneurial mindset is slowly distilled down to the younger generation, because they contribute most to that statistic. The city of Singapore is becoming more and more cosmopolitan. If you bother to look around, you will find one in ten people who are foreigners from other countries. Furthermore, the government has recently looking at forming a board for small & medium enterprises, studying the feasibility of a stock exchange similar to AIM in the London Stock Exchange and provided S$13.75B worth of funds into science and technology.
Yet, there is a shortage of home-grown entrepreneurs. Other than Creative Technologies and Hyflux, we have not seen other big hitters in the country. Rising from the ashes of the dot.com bust, young entrepreneurs are still dealing with status anxiety. To some, the entrepreneurial culture has not fully grown in the Singaporean minds in the older generation. People are still thinking to work for bigger companies, search for material possessions (car, credit card, career, cash and condo) and afraid of failure. Of course, most young Singaporeans are not living in their own dreams but through the dreams set forth by their parents, who are not aware of the changes in today’s global economy. Despite the enthusiasm shown by the younger generation to be entrepreneurs, there are still a shortage of business plans in the local business plan competitions to be translated to true businesses.
While many cynics or naysayers condemned the lack of entrepreneurial spirit in the Singaporean mindset, they do not appreciate the historical roots of how the country came to be. A respected American venture capitalist who I worked presently with gave a very different view from what we read. If you trace the historical roots back to the independence of Singapore in 1965, one will realize that the country was left to survive on its own after the separation from Malaysia. Unlike its surrounding neighbours, it has no natural resources and the only way to grow the economy of the country was through successful management of human capital. That proved to be a success, because it did transform itself from a small fishing port to the buzzing city today.
Through the years, Singapore reinvented itself with the use of transition from manufacturing based economy to knowledge based economy. Through the hands of the government (imagine them as the venture capitalists), they hedge their bets on biomedical sciences now and hope to recreate the success that it has brought itself in the past thirty years. The government is entrepreneurial in its early days after independence and built a successful and vibrant economy till the 1990s. However, the structure of Singapore Inc has grown too big, like a multi-national company, for example, Microsoft, it becomes too rigid and inflexible. That inflexibility is translated to the cultural mindset of the country, with the typical Singaporeans having too much expectations for material possessions, too little patience for hard work and too intolerant of failure in themselves and other people.
Is there something missing that will help Singapore to find back that entrepreneurial past?
Fire in the belly
A famous entrepreneur in Singapore pointed this out to me privately over a discussion. He used the following example to illustrate his point. Take a typical Singaporean, if he decided to take all his meals in the hawker centre (assuming that he does not cook), he can pay about $3 per meal and that will total to $270 per month. That calculation is to point how comfortable most Singaporeans are in at the moment. Of course, to a lot of Singaporeans, coupled with our expectations and the sacrifices the men has to make for the country, we have taken a lot of things for granted. In short, the entrepreneur told me straight that why the entrepreneurial activity is small among the Singaporeans compare to the foreign talent that are bearing the brunt of resentment from the local heartlanders. It is the fire in the belly.
Singapore was like the US in its early days as a British colony. Our forefathers came to the shores of the country and search for a better place to live. The multi-cultural background contributed to its success as a trading port. The fire in the belly was in the blood of our forefathers and not in the younger generation. Most of the younger generation hope to rely on protectionism to safeguard their entitlements. The government is on the tightrope to control this protectionism. In Silicon Valley, it does not matter who you are. You could camp in the Silicon Valley during the hay days of the dot.com rise, and find a job the next day whether you are Indian, Chinese or for that matter, a Singaporean. The same kind of mindset is required for the current generation of Singaporeans.
The resentment to foreign talent can be only be cured via two approaches, first by both locals and foreigners working towards a win-win situation for an entrepreneurial venture and second, Singaporeans not short-changing themselves. The first is easier to achieve, but the second is difficult. When I visited Shanghai last December, during a networking session, I was told that Singaporeans in Shanghai are helping each other less compare to their Taiwanese and Hong Kong counterparts. Singaporean businessmen often look for the cheapest deal, but in business, it is not just profit that we need to maximize but also personal relationships. Yes, money can allow you to buy everything, but it cannot buy relationship. The Singaporean mentality prides itself for being efficient which I still believe that it’s our strength, but we need the software and they are the networking and win-win mentality that is lacking in our culture.
In the country, the Singaporeans need the “fire in the belly” and drop their resentment to achieve a win-win situation. An entrepreneurial environment like Silicon Valley requires diversity of talent and hunger to achieve. Countries like Finland has demonstrated that size does not matter, otherwise, companies like Nokia would not have existed.
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Chun Hui on Wed, 29th Mar 2006 6:59 pm
Hi, I totally agree with you on the point that Singapore should not just seek to become a Silicon Valley. Halfway through your article, I was questioning myself why Singapore should be a Silicon Valley. The Singaporean government loves to compare us with different countries or cities (Switzerland and Venice), perhaps that offers a goal to work towards, but Singapore has proven to be unique and what we seek should be to carve a niche for ourselves.
shianux on Wed, 29th Mar 2006 7:20 pm
brilliant post. I have bookmarked this for reference.
wannapreneur on Wed, 29th Mar 2006 9:11 pm
Personally, I feel that Singapore has been too comfortable a place to live in and we are all too used to being spoonfed or led around. There is no need for survivial entrepreneurship which can be seen to make up a substaintial portion of startups in other countries. Though the government has steered its initiatives towards encouraging entrepreneurship and put enormous amount of resources in this pursuit, it has only managed to give rise to what I see is a short term surge in pseudo-entrepreneurship and as well as folks peddling all things entrepreneurial.
To really see the level of true entrepreneurship rise in Singapore, there needs to be a home-grown hero who makes it big and becomes recognised for his/her enterprising pursuits.
Julian Low on Wed, 29th Mar 2006 11:09 pm
I just want to point out the fact that that there is no funding gap in Singapore, its the mentality of the people that counts.
Despite Gahmen’s call for entreprenuership, you still see a concerted efforts by EDB and other gahmen agencies clamoring for short term job gain by attracting overseas MNCs to base their companies in Singapore. Also, large GLCs still compete with small companies within the domestic market which is small enough to disallow any growth from Singapore to overseas.
I sincerely feel a clean break is very much needed in the minds of Singaporeans both people and the governing agencies. Increasing our brain gap temporary by recruiting large number of bright young minds around the region is good but we need to do better than that. Can hiring 10 Chinese from top universities and 10 Indians from top colleges like IIT produce valuable patents? Possibly but not definately considering that IBM churns out more Patents than China and India combined. Futhermore, there is so much research funding that NUS/NTU can grant.
Thus what I’m proposing is a paradigm shift in that SPTO to be fully subsidized by EDB and to give a 10-15 year grace period for patents to both be filed and further developed in Singapore. Alot of inventors with bright ideas need to stem from our neighbouring countries and would like to access the asian markets. For us to do that, we can allow suitable candidates to apply for a Singaporean patent, pay for their chinese patent and in exchange have them develope their technogies in singapore. There should also be a suspension of royalties for these patents brought in if developed in NUS.
What singapore needs is not an influx of academically bright students from overseas but an innovative work group with patents and business experience under their belts. Hopefully doing so will cause upheaval within the singaporean market drive the engines of innovation for our country.
Julian Low on Wed, 29th Mar 2006 11:27 pm
To wannapreneur comments,
Why wait for a homegrown hero to light the path? Everone has their own path to take. A true entreprenuer finds his way, with govermental help or not.
Thats the problem with us singaporeans, we bemoan about our own state of affairs but other than bemoaning, we do little to improve our lot.
I see it even in the way NOC students here in BV and SV. I seriously feel we should do more than experience SV/BV but also do our part in dragging VC funding to Singapore since we are here. We should have a concerted effort in selling Singapore as an entreprenuer hub with low taxes and a clean garhmen. We should remember that it is our people who sent us here and we owe them that much.
BjornLee on Thu, 30th Mar 2006 2:46 pm
I am flattered. =) Insightful article here that captured many opinions on the debate of why Singapore cannot recapture the Silicon Valley spirit of success.
I thought there was one phrase that jumped out from the article -> Fire in the Belly. Let me link this phrase with the comment that Singaporeans lives in too cloistered and comfortable an environment. Thats not true, from a hypthetical outsider view, because all Singaporean males went through military service, which is supposed to rough us up for the challenges in future. But Singaporean males will somewhat agree with me that the entire military service is not all too satisfying. Despite the mental and physical strenousness, there is an overarching environment of corporate restrictiveness that limits creativity and advocates a culture of conformity. Yes, discipline is an important component of the military structure but it does not have to be linked with a clamping down on innovation and creativity.
My opinion here on a quickfire way to ramp up innovation in Singapore and to inculcate a more innovative and resilient spirit in Singaporeans starts from this stage of Singaporeans’ lives. Look towards the Israelis and develop a culture that advocates discipline, resilience and innovation.
chong1 on Thu, 11th May 2006 12:24 am
As involved in the ecommerce business in Singapore, I have been searching in search engines related article and speech. I found only few relating to Singapore ecommerce from the period Internet burst and until a year ago. It has been encouraging and enlightening to read all the postings here.
To my thinking, the development of the dotcom business in Asian is approx. 3 years behind the US and 2 years the UK. Globalization provides the opportunity for other countries fast catching up, especially for the Singapore companies leveraging on the Singapore brand name.
The Silicon Valley model, the Singapore story, in less than ten years the most successful dotcoms with the market cap. of more than 80B US are all unique in their path of growth and have been the wonder of today world.
In the dotcom business, size of geographic and population no longer matter, what matters is the business value that a company could bring to the worldwide market, the fastest the impact. Globalization has leveled up the playing ground. Creativity or the capability to fill the cavity of the world supplies matter.
Singapore as a traditional world known trading port, with the advances in its business and ecommerce infrastructural, the ever growing Singapore brand name, and the switching of the world economic pole from the west to the east, has a great chance today to develop Singapore as a global hub of e-retailing.
Can a small company in Singapore without investing fund be a big leading e-retailer in the world market? My experience in the ecommerce is positive though I run a small e-retailing business http://www.pchub.com as stock provider shipping order placed online to more than 120 countries.
My business was bootstrap, and grows according to the model of reinvented new economy
Singapore Entrepreneurs » Why I wrote the “Finding the Golden Path: Can Singapore be a Silicon Valley?” on Mon, 29th May 2006 12:11 am
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Singapore Entrepreneurs » BestBlogForward Meme: Why I wrote the “Finding the Golden Path: Can Singapore be a Silicon Valley?” on Tue, 30th May 2006 2:00 am
[...] Why I am writing this, because I want to support this entrepreneurial BestBlogForward Competition by Kevin Lim in theory.isthereason. . The idea is to blog about the most popular entry in your blog and here is how I am going to begin I am telling the story behind why I decide to write this earlier article: “Finding the Golden Path: Can Singapore be a Silicon Valley?” [...]
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troodon on Tue, 1st Aug 2006 5:42 am
Another requirement of Silicon Valley is the fact that Silicon Valley has 2 great universities in the world: Stanford and Berkeley. The amount of technology transfer between such academic institutions and the companies within Silicon Valley has been tremendous. Also take note of the amount of talent in Silicon Valley compared to Singapore. It might be painful for me to say this but Singapore just does not have the people needed to create a Silicon Valley. This is not an unfair statement in anyway. Silicon Valley takes in the top 1%(or even less) of the brightest, smartest people in the world. A lot of them are not Americans but really smart, bright people(often students) from their respective countries. Without a strong, open culture of R&D Singapore will never succeed as a Silicon Valley. It is not Singapore’s fault for this depressing outlook however. Singapore just does not have enough people to sustain a top 1% “brilliant people” population that Silicon Valley requires. One can keep talking about entrepreneurship and what not but that is not the main problem that Singapore faces. Even with good entrepreneurs, Silicon Valley in Singapore just will not happen because there will be no smart people to drive the companies.
chong3 on Mon, 9th Oct 2006 2:23 pm
Entrepreneur Is Born Or Could Be Cultivated?
Wild animals are born with instinct and skill on survival. Human are born with instinct to adapt in and be affected by the process of life growing. To be entrepreneur, the germ factor is generally not a decisive factor. Many great men were the next generation of the poor and the uneducated.
The human survival and development base on its capability on the existing condition to explore the commonly unknown or unexplored. The same apply to individual and nation.
Individual was born with a value of capability. The value moving up or down is the result of the interacting between the social interaction and the germ. The same is the world environment to a nation.
Entrepreneurial Spirit In Singapore
Singapore, in the process of nation building, has refined all the rules and setup in places to ensure the nation survival.
This value of the instinct, or the germ factor inclining for developing entrepreneurial spirit has not disappeared, but has just been contained unconsciously. Should a right and clear direction is guiding and make the value conscious and this value could be ignited, people mindset could be changed in days or months, it could evolve to form a kind of world wonder in its own way different from the Silicon Valley culture within the next 10 years- due to the advance and growth of quality of its people and business infrastructures in the knowledge base economy and connection to the world, the opportunity the globalization offers and the nation desire to survive- stay ahead and create new value before the competitors do.
The Ignorance Of Marketplace Idea By The Descision Makers
Entrepreneur spirit, seeking and inviting great idea has long and much been studied and promoted. The assisting schemes available to new startup and existing business have been in place for submission of business plan or business idea in detail for valuing. Because of accountability and compliance, the decision makers would base on the known conditions for the existing and the future to value all the submissions.
Those who possess the entrepreneur spirit and the marketplace idea may not approach for help, as they know what they know could not make the decision maker known. Instinctively they know they have to work a long and hard way before they become known. Chance of success is getting slim in the midst of globalization. If a marketplace idea could develop to be emerging world brand name within the next 5 year, it may serve as an ignition to the contained entrepreneurial spirit to evolve to leverage on the Singapore brand name. Every supporting resource, just as the waiting is in place for such marketplace idea to grow or more often die naturally. It is therefore critical to create such ignition power before too late.
Gamble For The Marketplace Idea……….
JonnyL on Thu, 29th Nov 2007 2:35 am
I think the key to entrepreneurship in Singapore is to have more willing entrepreneurs who do not shun the risks involved in building a business. No matter how good the structure and schemes offered by the government, without the stream of entrepreneurs who are willing to make it or break it, nothing will ever bear fruit. And the way to do that requires a major shift in the Singaporean and Asian mindset, which is almost impossible to change. If an entrepreneur really wants to incubate his business and grow it into a global behemoth, he would sure be able to overcome them despite the absence of many schemes which we see today. We need more of such people who would build a business for the sake of building the business, with or without external help. How to do this is really another matter, beginning from how others view failures all the way to the education system. As Guy Kawasaki said, people in the US would say, “Why are you working in that company for so long?,” while the opposite happens in Singapore,” Why did you quit that job? Didn’t it pay very well?”
Another point was one that I derived after a conversation with a scientist working at A*Star. Upon achieving user-driven research outcomes the scientist at A*Star is given the option to spin off the discovered technology into a company with funding by A*Star (the government) which essentially causes it to be government-linked in the end. Many iconic Singaporean companies have the same thing in common. (They are private companies with the Government as the major shareholder) The presence of the government in the entrepreneurship scene can be unsettling and (as seen in the scenario today) counterproductive.