HeartWare Singapore

Opinion: Is Singapore still relevant after 50 years? Here’s an entrepreneurial view

Note: Data updated to reflect 2019 statistics.

As Singapore ramps up to its 50th birthday celebrations on August 9 2015, the politicians and economists have all given their views about post-50 Singapore, from Prime Minister Lee Hsien Loong’s interview with Time to The Economist‘s special report on Singapore, and many more. But what about the viewpoint of Singapore entrepreneurs, especially tech entrepreneurs, in this digital age? Will Singapore still be relevant in the next 50 years to ASEAN and the world? Why is this so important for Singapore entrepreneurs to understand this?

Singapore’s entrepreneurial purpose since 1819

From its founding in 1819 until 1965, due to its strategic location at the tip of the Malay hinterland, Singapore has been a vital trading post between China and the West. Merchants (the traditional name for entrepreneurs), gathered at Singapore to trade their goods, hiring many laborers from China and India. Merchants were a vital key to economic activity, offering employment and income to the employees who sent their savings back to their respective motherlands.

Fast forward to the last 50 years, Singapore continued its purpose as a conduit between regions and people. Singapore Changi Airport saw 65 million passengers in 2018, one of the most active airports in ASEAN. Singapore still remains as a transshipment nation with international trade at S$982 billion. Singapore remains as an important place for 1.46 million non-resident foreigners earning their income to send back to their motherlands, to a point that a village in Tamil Nadu, India, honors the founding father Lee Kuan Yew with a memorial hall and brass statue.

Through the employment of many Indians from Tamil Nadu who repatriated their savings, the livelihood of their families improved significantly. Fifty thousand Malaysians travel daily to Singapore to work. Singapore hires as many as 205,000 domestic foreign workers, mainly from the Philippines, Indonesia, and Myanmar, a spill-over effect from economic prosperity, and that also created valuable income for the domestic workers to repatriate their savings and support their communities.

Entrepreneurship has been a vital key to Singapore, despite the numerous MNCs based out of the country. A government report shows there are 180,000 small and medium enterprises (99 percent of total companies) employ 70 percent of the workforce and contribute 50 percent of GDP. Through the years, entrepreneurs in Singapore took advantage of the import-export mechanism, the transfer of goods and services from one market into another, and in the course of such activities, brought about economic transformation.

Entrepreneurship in Singapore is also vital to the nations. As a unique trading island state, it is seen as a regional base of operations in ASEAN. Speaking to various heads of medical, engineering, biotech, hardware, and technical software innovation centers in Singapore, the writer understands that Singapore gets the latest forefront technologies from overseas, from which value-add and trial testing is made in Singapore before it is commercialized and exported to the other markets.

It is without a doubt that entrepreneurship plays a vital role to Singapore’s economy since its founding, along with its trading partners, but will entrepreneurship be as active as it was before?

Fall of entrepreneurship and risk taking in this generation

In a recent article “Why a safe job is considered risky business in Singapore” on The Straits Times, the author laments the lack of risk taking by Singaporeans. The preference is mainly for iron rice bowl careers. This is an unfortunate turn as previous generations of Singaporeans were entrepreneurs and risk takers. This is why despite much government efforts to promote tech entrepreneurship in Launchpad@one-North, the ecosystem has been anecdotally dominated by hungry and driven foreigners who were more keen at risk taking.

Even at TRIVE Advisory, which promotes Singapore entrepreneurship and administrates government grants, some Singaporeans are fine to take entrepreneurship as long as the government grant covers their salary. Ko Tze-Shen, director of Angels Gate, coins them “Grantepreneurs”, where they look at entrepreneurship as a career and survive mainly on grants for their livelihoods. Risk has to be mitigated by the government before starting a business, a contradiction to the character of an entrepreneur. Businessmen a generation ago snorts at the idea of grants and calls new entrepreneurs as soft.

Support from family is also an issue. Here in Asia, respecting wishes of elders is a cultural core value. An entrepreneur, who is the son of a taxi driver, shared with me how he left his home because his parents were so against him being an entrepreneur when he was destined to be a teacher.

Another entrepreneur was forced to quit his business and take a job as his fiancé refused to marry him unless she saw financial stability. The negative perception on entrepreneurship drives away potentially good startup founders. Mindsets are still firmly placed that once receiving a degree, children honor their family to get secure iron rice bowl jobs.

Lack of entrepreneurship makes a nation less relevant

Singapore’s quest for education made it a victim of its own success. With 27 percent of Singaporeans armed with a degree (not including overseas degrees and part-time courses), the expectation to get a high-salaried degree is the first priority. Singaporeans are less inclined to take risks given the stable stock of opportunities. But while they are happy to secure a safe job, it brings a nation of complacency, rather than one of being kia-su. And once a nation loses its competitiveness, it will lose its standing and purpose and the world will continue on without it.

Entrepreneurship brings innovation and community transformation

As Singapore is a tiny island state with no natural resources, entrepreneurs are forced to think outwards and create opportunities for themselves. This led to the many types of innovations we have seen over the years which we can learn from.

The Breadtalk group led by George Quek, a Taiwanese entrepreneur who built his innovation on the simple bread, brought about many bakery outlets across Singapore and the world and has a current market valuation of S$394 million. Charles and Keith, which were invested by the LVMH group, is led by two Singaporean brothers who innovated design and created luxury shoes and bags at affordable prices.

We have seen how Singapore Post (Singpost), a sunset traditional mailman service industry, innovated and took advantage of the rising ecommerce trends and built up Quantium Solutions, a logistics operations which handles ecommerce parcels across the region. In fact, Singpost transships parcels via Singapore before it is dispersed out to the region. Alibaba now owns 14.51 percent of Singpost.

Carousell, the rising poster boys in the startup tech industry, started with a mere S$7,000 grant and through their tenacity now are dominant players of the lifestyle app segment in Singapore, Malaysia, Taiwan, and Indonesia. Carousell has raised US$85m in Series C since.

How has all this helped an economy? Economic activity. For example, Singpost created a supporting logistics infrastructure that allowed many ecommerce businesses, small and large, to start their businesses. Competing courier services like Ninjavan and TaQBin came in to serve the growing activity. Large ecommerce marketplaces like Q0010 and Zalora filled the space for e-retailers and consumers to transact. The movement of goods and services in the ecommerce trade drives up international trade, which is beneficial to nations.

What entrepreneurship needs to change to ensure Singapore’s place in the world

A significant mindset shift needs to be done at the grassroots level, starting from the individual. The stigma of entrepreneurship has to be lifted off. It is fine to have risk taking, given the proper considerations and time span. Entrepreneurship can also be done while studying, as we have seen budding young students selling items via ecommerce blogs and marketplaces. Consumerism and holidays can be swooped for life learning experiences doing startups. Entrepreneurship has to be part and parcel of life, instilled during the younger years.

Family and loved ones have to encourage and support the entrepreneur. Parents need to remember their original roots of risk taking and this culture should be imparted. Fellow friends should allow a listening ear to the entrepreneur and give feedback as consumers to help improve the product. Angel capital can also be contributed to the founder, without overpowering debt obligations.

On the ecosystem front, previous generations of Singapore entrepreneurs should join the pay-it-forward movement, providing angel capital, mentorship, and even be the first clients to try their products. They should be champions and also encouragers to help instill confidence for new entrepreneurs to gain the inflection point to success. TRIVE Advisory is leading that charge to support more Singaporean startups with advisory, mentorship, and grants.

MNCs may include in their CSRs to support collaborations with accelerators and incubators and offer their strengths where needed.

Maintaining the relevance

Entrepreneurship is a vital essence to the Singapore’s economy and is still relevant in this next era of Singapore’s future. Singaporeans should remember their continued role as entrepreneurs—risk takers and leaders of industries.

As we celebrate Singapore’s Golden Jubilee, let us not forget our pioneers who were risk takers and entrepreneurs and built Singapore to where it is today. Singapore is a nation of entrepreneurs. We should not lay waste to those efforts but to reflect on how Singapore as a nation continues its entrepreneurial track to deliver innovation and economic activity to the world.

To all Singaporeans and friends of Singapore across the world, happy 50th birthday Singapore!

This is the first article of the Heartware Singapore series, where the author shares on different topics to spur the Singapore startup ecosystem.

This article first appeared on Tech in Asia.