Howard's End: Asian Tiger Lacks Spontaneity
Singapore is often held up as a business role model for New Zealand to follow, but its impulse to control leaves little room for spontaneity and it is failing to produce the kind of entrepreneurs that it needs. John Howard writes.
At 48.4 percent, Singapore has one of the highest per capita rates of personal computer and mobile phone ownership with nearly half the population using the Internet
But a recent survey by A. C. Neilsen eRatings.com of seven leading regional economies showed that Singapore actually ranked last in terms of the time Internet users spent online each month.
The Singaporean Government has sponsored research and innovation centres, forged links with Silicon Valley, set up a fund worth a billion dollars to foster entrepreneurship in the technology sector, liberalised telecommunications and other key sectors of the economy to spur competition, and encouraged immigration to enlarge the country's talent pool.
But despite all these efforts, a January study conducted by the London Business School and the US-based Babson College, revealed that Singapore ranked near the bottom in getting people to create business ventures. The study was partly financed by the Singaporean Government's National Science and Technology Board.
It found that only 2.1 percent of adults are involved in entrepreneurial activity which placed Singapore 19th among the 21 nations surveyed.
The survey also found that among the things that hindered Singapore's growth were "fear of failure and an associated preference for stable corporate employment" by the population.
Analysts say that Singapore's paternalistic Government, its conformist political culture, and an education system that places too little emphasis on independent thought and creativity has now combined to stifle innovation.
Patrick Lambe, head of Knoweldge Platform says, "The hard truth is that Singapore has cultivated a generation of followers rather than a generation of innovators."
"That's fine for massive, concerted, centrally directed growth, but at a time of rapid change and the need for multiple and continuous innovation across an entire economy, the supply of entrepreneurs is suddenly painfully short," he said.
The Singapore Government, now aware of its educational shortcomings, is changing school programs and teaching in an effort to get students to think and be more creative.
But Patrick Lambe says the educational ministry faces immense challenges in changing a system geared towards conformity and packaged knowledge, and turning it towards experimentation, innovation and the handling of new risk.
Sim Wong Hoo, chairman of Creative Technology says, "We Singaporeans are too careful, too rule-based and when we have no rules, we are paralysed."
The real problem is that the Singaporean Government part-owns most of the major companies and demands a say in everything from dating to the courteous use of mobile phones.
Government-linked companies, like Singapore Airlines, DBS Bank Ltd, Singapore Telecommunications Ltd, and Keppel Corp., account for 60 percent of gross domestic product and they have been frequently criticised for crowding out the home-grown private sector.
Many of those companies are listed on the stock exchange and are generally well run, efficient and profitable. But there are virtually no local private-sector entrepreneurs with sufficient resources, interest or expertise to take over or make substantial investments in the major Singaporean Government-linked companies.
Undoubtedly, Singapore is successful at being a globalised country in terms of cross-border flows of goods and services, capital, people and communication. But that success, its economy grew by an impressive 10 percent last year, mostly comes because it is a hub - a middleman between Asia and the West.
That's very clear because its seaport is considered the world's busiest, it is southern Asia's banking centre and it is a hub for oil refining, shipbuilding, chemicals pharmaceuticals, electronic goods and computer components.
But its human rights record is not something to write home about. The Singaporean Government still has a ban on chewing gum, canes people, monitors its toilets and it censors free speech. Defamation law suits are a key tactic used by the Government to silence dissent. The same political party, the People's Action Party, has managed to stay in power for 35 years.
While it is slowly changing this seems to have less to do with a sudden love of civil liberties than with the realisation that to stay ahead in a globalised economy, Singapore simply has to lighten up a bit.
It wasn't a good look when a 73-year-old illiterate woman in poor health was recently dragged out of a Singaporean courtroom in tears, having been ordered to begin serving a six-month prison sentence for renting an apartment to illegal immigrants. Underground opponents of the Government's actions say that such a draconian punishment was not justified.
In New Zealand, on a scale of one to ten, I give our Government an 8.5 for at least trying to transform us into a knowledge-based economy.
But it's more than that.
I think that by far the majority of our population, like Singaporeans, also suffer from fear of failure and have an associated preference for stable corporate/government employment.
A proactive mentoring system available for the whole of society will help change that - a VisionCorp.
For example, where does the little bloke in New Zealand go with their innovative idea but doesn't have enough money of their own to even be able to apply for the balance through the various Government programmes? And, in the first instance, who is there to listen to them anyway?
Are we to push a great idea aside simply because the person with it doesn't have enough money to start with?
Furthermore, our children must leave school with skills beyond acquiring knowledge from textbooks and passing tests. We have to teach them about discovery, experimentation and adventure. And, perhaps most importantly, we must teach them how to seize opportunities.
In recent columns I have said how New Zealand is caught up in process rather than results. The Singaporean experience shows that even if Government throws billions of dollars at the process of transforming our economy, we may not get the results we hope for.