Rising against all odds, Singapore is pushing hard to becoming a research-intensive, innovative and entrepreneurial economy.
By Chloe Ter
“When it comes to innovation, there is no such thing as status quo — you either improve or decline relative to everyone else and sitting in a comfort zone for too long could prove costly.” That is the philosophy of Steve Leonard, the founding chief executive of SGInnovate. SGInnovate is a leading government enterprise that consolidates entrepreneurs’ innovation efforts in Singapore.
Given Singapore’s tiny domestic market, it was impossible to rely on import substitution to promote economic independence and development. Instead, the city-state chose the unconventional route of attracting investments from foreign multinational corporations.
A joint study from Cornell University, INSEAD and the World Intellectual Property Organization showed that Singapore is the seventh most innovative country in the world in 2017. Singapore follows closely behind the United Kingdom and the United States. These countries are much larger and have much more resources than the city-state. Singapore has outshone itself despite having several geographical constraints.
Global Innovation Index 2017
Availability of skilled and multilingual workforce
Studies show that mixed-language groups have a propensity to find innovative solutions for practical problems. Singapore has the ability to offer workforce solutions which may require multilingual and multicultural sensitivities since its citizens come from diverse racial backgrounds.
In addition, the city-state attracts a large pool of foreign talents, with foreigners making up 64% of Singapore’s citizen population. Most of these people come to Singapore because of its language environment and liveability. Most Singaporeans are bilingual, typically speaking English as well as one of the country’s three other official languages: Malay, Mandarin, and Tamil.
52.8% of Singaporeans have received tertiary education, which is comparatively higher than that of countries like Australia (42%), New Zealand (36%) and United States (44%). Furthermore, Singapore also saw a 7.7% rise in students enrolling in university from 2010 to 2017. When people are more educated, they are exposed to a greater variety of ideas and perspectives. This allows them to think deeper and develop more innovative solutions.
Source: National University of Singapore
Protections for intellectual property
Singapore provides a sound intellectual property (IP) rights regime, backed by a trusted legal system and solid IP infrastructure. The government’s IP policy is aimed at encouraging innovation, creativity and growth of industries and commerce in Singapore.
According to the World Economic Forum’s Global Competitiveness Report 2015 – 2016, Singapore offers the best IP protection, infrastructure and incentives in Asia and is second globally. Singapore follows behind that of Finland and Luxembourg, which tied in first place. Singapore government has also taken additional initiatives to boost the country’s IP landscape further and to build it as Asia’s business hub. This includes pledging close to US$1 billion to the Makara Innovation Fund, to invest in innovative companies with globally competitive IP. The Ministry of Law has also created the IP Hub Master Plan to double the number of skilled IP experts in Singapore and train them in IP-related issues.
“Singapore’s strong legal infrastructure with regard to intellectual property protection gives us the edge to lead the forefront of innovation,” says Tung from 3M. 3M is a global science company that manufactures a wide range of products. 3M Singapore has recently developed a new type of lighting. This was done in collaboration with Singaporean government. Trials of the lighting system were conducted in 2016 at some of the corridors in Yuhua, Jurong.
Strong reputation as a strategic business hub
Companies need places where they can be inspired to develop new approaches, explore other forms of innovation, and form new partnerships in order to transform the future. Singapore is globally recognised as a country with a clean and incorrupt political system, enhancing its reliability and efficiency. More companies and foreigners will be attracted to work and do research and development projects in Singapore. In addition, having an extensive network of trade agreements enables Singapore to reach further to the rest of the world.
“We selected Singapore because of its strong reputation as a strategic business hub for the region—one that features developed infrastructure, connectivity, political stability, open business policies, and a skilled workforce.” says Dublin-based medical technology and services company Medtronic PLC president, Bob White. In 2013, Medtronic opened its global Center of Excellence for Business Model Innovation in Singapore. It now designs, tests, and scales new business models for Asia’s rapidly growing developing economies.
Lack of risk-taking culture
Successful innovation requires taking smart risks. However, many organisations are risk-averse, with Singaporean corporations being no exception. A recent study has shown that the city-state lags in the culture of risk-taking.
While start-ups are growing internationally with greater entrepreneurial vigour than before, it is not enough to sustain Singapore’s success. The city-state must encourage its people to innovate to raise its intellectual capital. It is hence essential for conservative mindsets to be abolished, with people being unafraid of failure and willing to venture into uncharted territories. A more vibrant public sector is essential for Singapore’s next nation-building phase.