Singapore is highly dependent on international markets, which is both an advantage and a challenge. So, from the perspective of innovation and entrepreneurship, what are these innovation advantages and challenges?
Future China Global Forum and Singapore Regional Business Forum 2018 was jointly held by Business China and Singapore Business Federation on August 27 and 28. Li Jianggan, founder and CEO of Momentum Works, participated in Conversation with Minister Ong Ye Kung: Innovation and Enterprise in the Age of Disruption as a speech guest.
Singapore has strengths in two aspects
I. Policy support
Ong Ye Kung, Minister for Education, Singapore, said Singapore’s growth model proved that Singapore was very suitable for big companies as it had a stable outlook. In addition to rare corruption, the relationship among workers, unions, governments and employers is strong. And Singapore enjoys mature infrastructures, including airports, seaports, and roads.
Singapore also welcomes start-ups as they represent new sciences, technologies, and products. Entrepreneurship and technological progress are important from the government’s perspective.
The government has been investing in research and development, and academic institutions such as the National University of Singapore and Nanyang Technological University have been doing research to seek new breakthroughs. What’s more, Singapore has powerful intellectual property protection laws that allow companies to commercialize products they invent. Singapore has also signed free trade agreements and do not practice protectionism.
II. Gateway to Southeast Asia
TAN Kiat How, CEO of Singapore Infocomm Media Development Authority, sees three big opportunities for Singapore:
- Singapore is at the forefront of the digital economy, offering great opportunities for everyone. The first wave of revolution raised by Google, Facebook, Microsoft and others is a solid proof. Tan said he once discussed with a senior Chinese official, and they believed China’ digital economy was to reach $8.5 trillion by 2021, accounting for 55 percent of China’s GDP. It will outperform any other sector, including agriculture, which is a rare opportunity for tech innovators.
- Southeast Asia is one of the fastest growing regions and is expected to become the fourth largest economy by 2030. More than 650 million people will live in southeast Asia then, and more than half of them are aged over 25, who could easily accept mobile phones and the Internet. For many Chinese companies, Singapore is a gateway to Southeast Asia and overseas, while Singapore is also a springboard for many innovation talents and companies to enter China.
- Highly globalized and favorable industrial environment enables Singapore to attract excellent talents from all over the world.
Challenges for Singapore startups
The most obvious challenge is talent. Li Jianggan, founder and CEO of Momentum Works, said though Momentum Works had offices in Singapore, Indonesia and the Middle East, they finally decided to set the company in Singapore after discussing with some friends. This is because considering Singapore’s international reputation, people are quite comfortable with products made in Singapore.
However, when recruiting new staff, Momentum Works found many problems. For example, many young people in Singapore go to Europe and America for study or exchange. They are very international, but not local enough. Singapore’s home front has always been south-east Asia, but in his observation, many young Singaporeans are “a bit out of their comfort zone” even when they take a one-hour flight to Jakarta.
LAI Chang Wen, Co-founder and CEO of Ninja Van, also said young people in Singapore grew up in a highly rule-based society. “There are many rules in Singapore, such as no food here, and no alchhol there.” It causes young people lacking the necessary flexibility when embracing new things. Lai believes Singaporeans need to learn to be more open.
Onk doesn’t think Singapore has serious talent problem. He thinks Singaporeans are practical, and when they realize business opportunities, they quickly prepare for them. For example, many university students are learning Indonesian, which is very gratifying.
Wang gave the example of Grab. Grab often hires a lot of interns, and then interns are sent to Indonesia to learn local language and culture, which also reflects the willingness of students to accept learning new things. People learn about what’s available in society.
The difference in the Singapore market
When moderator asked “what Singapore needs to do to become a target market for tech giants like Ant Financial,” Onk said the Singapore was still very different from other markets.
Many start-ups enter some markets because there were loopholes in regulation which gave companies more room to “play to their strengths”. Once startups enter such markets, they can basically do whatever they want. And when they grow up, they occupy a strong position in the market.
But Singapore will never be such markets, as the regulatory regime is so advanced that it can coordinate and weigh different deals. Onn believes this is a healthy way to attract more technology companies.