A few days ago, Scott Anthony, Managing Partner of Innosight, wrote an article on the Harvard Business Review about Singapore as a entrepreneurial hub. While he brings out many excellent points, especially the fact that there’s probably too much seed capital in Singapore, there are many issues that I would like to discuss further.
Seed funding is probably the government’s response to ensure that no idea that has the potential to be the next Genentech or Xiaomi gets left behind. Other than the schemes that he mentioned, it’s also important to highlight the $1B Technology Innovation Fund (TIF) a decade ago.
However, there are a couple of points that need to be clarified. Firstly, military in Singapore cannot be compared to that with Israel. As someone who has been through the Singapore conscription experience, I don’t believe that it is a factor that breeds innovation compared to Israel. Sure, there’s DSTA, but full-time national servicemen aren’t incentivized to be entrepreneurial (the reverse is probably true). One needs to go through the 2.5 years (now 2 years) to understand this fully.
Secondly, the generation that saw Singapore to independence in 1965 is arguably very different from today’s generation. There were mom-and-pop shops all around. There were few opportunities, so the people of the land had to create opportunities for themselves, and forced them to be entrepreneurial. After all, they were the same people who (or whose parents) immigrated from China and India in search of opportunities. But in the 1970s, the workforce called for a different need – specific skilled labor was required to transform Singapore into a growing country with no resources into a first world financial and trading hub. Needs shifted – and the emphasis on entrepreneurship waned.
Third, Scott writes, “Singapore’s phenomenal development over the past 50 years means many of its citizens are sufficiently well off to take the entrepreneurial plunge without truly risking everything” – I disagree. The income gap is increasing phenomenally. As costs of living in Singapore skyrocket to be the more expensive in the world, wages don’t scale correspondingly (e.g. no minimum wage). I would use the term “residents” instead of “citizens” because there are so many non-citizens in Singapore (only a bit more than 3M are citizens), and although 17% of resident households having more than US$1M in disposable private wealth, I really do wonder how many citizens are actually in this “high net-worth” category. Perhaps it may reach the point where citizens are forced to be entrepreneurial, like the founding generation.
The author highlighted a lot of interest in the ICT/TMT space, which is definitely a sector which is enjoying rapid growth. Technology and life sciences have been emphasized by Singapore, illustrated by A*STAR and the billions of dollars being put into R&D. However, life sciences is still taking a back seat as investors shy away from a sector that they are unfamiliar with. There are ways to get around this – I discuss this further in my article about life science venture capital in Singapore here.
It would be interesting to see if the popular reality TV show “Shark Tank” would be popular in Singapore.