Singapore is shifting from an efficiency driven to an innovation-driven economy. To achieve this, the government has invested significantly over many years to create a robust ecosystem in which innovation and entrepreneurialism can flourish. And unsurprisingly, it now has its sights set on Singapore becoming Asia’s hub for entrepreneurship.
It’s an ambition that appeared to be gathering momentum when in 2015 Singapore was ranked top 10 in the Global Entrepreneurship Index top alongside the likes of the USA, UK and Australia. But by early this year the city state had slid to the number 24 spot in the Index which measures entrepreneurial activity, aspiration and ambition in 137 countries, against economic infrastructure.
Could this be cause for concern in a country with so many of the fundamentals of a successful entrepreneurial economy in place – a buoyant financial sector and progressive regulator; sizeable sources of investment capital and a well-educated population?
Could the issue lie in the nature of entrepreneurship itself? Is Singapore’s race to become an entrepreneurship hub at odds with a nation where the fear and stigma of failure runs high?
Are there enough entrepreneurs in Singapore? And are they thinking big enough? And what’s being done to encourage local talent into the entrepreneurial endeavour, to ensure Singapore remains a key player on a regional and global stage?
We put these questions to Arcot Desai Narasimhalu, Visiting Professor of Information Systems at SMU, to discover more about the state of entrepreneurship in Singapore.
We read a lot in the media about Singapore’s vibrant entrepreneur-ecosystem. How has it developed to this point?
Professor Arcot Desai Narasimhalu
Desai: The Singapore government has played a significant role in creating the vibrant entrepreneur-ecosystem by creating and supporting a multitude of programmes, be it for infrastructure, incubation, proof of concept or proof of value. I have not seen such an aggressive support by any national government since the Yozma project by Israel that was launched to support the 1 million new arrivals in the 1990s.
The government up until now has played a significant enabling role – creating a conducive environment for entrepreneurship, but is this sustainable long-term?
Desai: The government of Singapore can only play a role in creating the ecosystem. The entrepreneurial ecosystem will be sustainable only when the private sector becomes the major if not the only player.
Is it realistic that Singapore might become the innovation and entrepreneurship hub for Asia? What are the key points in its favour and what are its key challenges as it seeks to move up to the next level?
Desai: For Singapore to become the centre of Innovation and Entrepreneurship in Asia requires a significant change in the mindset of the residents of Singapore. Individuals and their families have to acknowledge and accept Entrepreneurship as a legitimate career option. Enterprises have to begin valuing the experiences of entrepreneurs whether they succeed or fail. Entrepreneurs themselves should consider becoming serial entrepreneurs in order to train more in the art of creating value through multiple successful start-ups. Those wanting to become entrepreneurs need to consider innovations for global markets even as they create the pilots /early versions locally.
In 2015 Singapore was ranked in the Global Entrepreneurship Index top 10, but it’s now slipped from that ranking. What in your view is the reason for this, and is it a trend to be concerned about?
Desai: Singapore can remain in the top 10 only when its investors are savvy. At present many investors offer funds only when there is traction. This leaves a heavy burden on the government to nurture the early stages of a startup. More angel investors should step in to support exciting ideas for global innovations. Series A funds should realise their role is to support product development and market testing and not market expansion.
Singapore is a risk-averse society where the fear, and stigma, of failure runs high – are Singaporeans cut out to be entrepreneurs? And can they think big enough?
Desai: There are many countries other than Singapore that are also considered to be risk averse. I believe the early economic climate created by an astute and efficient government that progressed Singapore’s economy from low-end manufacturing through several stages arriving at an innovation-driven economy, offered strong, alluring, stable and successful career paths through the employment of large corporates. But as the cost of doing business in Singapore rises to the point when many of these multinationals may be forced to find alternative locations, the plentitude of jobs will slowly begin to thin. It is when the secure, well-paying jobs dry up that Singapore residents will be forced to look for many more entrepreneurial pursuits despite the possibility of failures.
Do you envisage a time when we might see the world’s billion dollar companies originating in Singapore?
Desai: We do have the example of Garena, a home-grown company currently being valued more than a billion dollars. They achieved this by creating a solution that addressed the global markets. I believe the success of companies such as Garena will encourage Singaporeans to become bolder in thinking of pursuing startups built around innovations that offer solutions to the global market.
What advice would you give to a would-be entrepreneur, sitting on a great idea? How can he/she position himself/herself for success in Singapore?
Desai: Become an entrepreneur when you are young, and look for a true mentor who can hold your hands through thick and thin.
This article was originally published on The SMU Blog.
