According to The Global Entrepreneurship Monitor (GEM) 2001 Executive Report, Singapore scored the third lowest rate of entrepreneurial activity among the GEM 2001 countries at 5.2%, just slightly ahead Japan (5.1%) and Belgium (4.6%) but pales besides the 11.7% figure for the US.

In the speech addressed by then Senior Minister Lee Kuan Yew on "An Entrepreneurial Culture For Singapore", MM Lee highlighted four main values which Singaporeans lack as wannabes entrepreneurs. (MM Lee's Speech)

First, the sense of personal independence and self-reliance is found to be pathetically lacking among Singaporeans. And yours truly confesses as one of them. However, being born, bred and fed in a nanny state, one could not help but become just one of them. Or according to John Kenneth Galbraith, "In any great [society] it is far, far safer to be wrong with the majority than to be right alone." At least I'm not alone.

Citing an example, MM Lee contrasted the attitudes of Hong Kong people versus Singaporeans. A Hong Kong businessman friend who set up his factory as well as settled here recounted the fact the Singaporean managerial staff who joined him 20-30 years ago are still working for him now. But the managers he brought from Hong Kong had long left to start their own factories. Incidentally, I knew of a Hong Kong friend whose businessman father even at the age of 65, instead of retiring, is still running around southern China seeking business opportunities. The father isn't an extremely successful entrepreneur, yet he perseveres because he values personal independence and self-reliance more than CPF and Medisave. Well, I'm not sure whether the likes of CPF and Medisave are available to the Hong Kong people.

Second, our social attitudes towards entrepreneurs are at best sceptical and discouraging albeit well-intentioned. Of course, they will initially shower praises on your guts and ambitions; yet, at the same throwing a wet blanket, warning you the difficulties and challenges ahead as well dissuading you from your wayward and wishful thinking.

It came as no surprised that Singapore scored low in terms of “cultural values” according to a survey in GEM 2003 Singapore Report. The proportion of Singaporeans who personally know an entrepreneur (29.5%), or who indicated fear of failure is not a deterrent (64.1%) are both below the mean for all 31 GEM countries. If that is not bad enough, Singapore also ranked below average in terms perceiving himself having the skills to start a business, and the proportion who perceive good start-up opportunities in the next 6 months.

The studies also report that Singapore’s culture does not gel well with the spirit of entrepreneurial risk-taking, creativity and innovativeness. Moreover, risk-adversity and fear of failure are deeply entrenched in the minds of Singaporeans. They fear failure and thus bankruptcy and failed entrepreneurs are wary of repeat failures. In addition, people in Singapore are lulled into indolence and contentment with stable and well-paying jobs particularly in MNCs, thus paying little heed to their inner entrepreneurial calling, if there is any to begin with.

Third, Singaporeans just could not accept the idea of not keeping up with the Joneses or the Tans, the Lees. The above survey findings speak for itself. Fear of failure does deter more Singaporeans (as a proportion to population) from becoming entrepreneurs as compared to nationalities.

I think the government cannot absolve itself from this predicament. The whole CPF is growing into a unwieldy monster sucking much of the crucial capital available to the people. Though the system is well-meaning, Singaporeans are not fools. They know better than anyone to where should they park their cash. Cash is indeed important for they provide capital for any fledging business. GEM 2004 Financing Report found that close family members and friends and neighbors are by far the two biggest sources of informal capital for startups, with the entrepreneurs themselves putting up about two-thirds of the initial capital needed to launch their ventures.

Moreover, young couples are throwing money into the bottomless pit of house buying, upgrading and renovation. They have to spend the rest of lives topping up CPF to pay off their houses, let alone starting a business. It also bring us to the fact that the Singapore government is one of the few in the world, if not the only, that provides quality public houses, comparable to private ones, to the people. With the government the biggest landlord, I always wonder how the market forces surrounding land prices are determined. Will our house prices return to those glorious days in the mid-90s when a Bishan executive could be transferred for a price of over S$1 million.

Four, I agree with MM Lee on the above three points but not the fourth one which is the tolerance for a high degree of income disparity. Singaporeans are "peace loving" creatures. Protests and demonstrations are never a part of our culture. Yes, we complain but that's about all we do and can do. We usually put up with what the government dish out to us, not without some disgruntlement of course. The danger will emerge when those portion of society experience regression. As mentioned in my previous essay True Beliver, I highlighted the fact that "[The early and most likely disenchanted] come not from the down and trodden who barely make ends meet but those whose misfortune or poverty is relatively recent. For example, a man who sees his fortune fall from US$10,000 per month to US$1,000 is more likely to take to the street with Molotov cocktails than a farmer who year-in-year-out struggles with US$100 a month."

In a nutshell, I believe new challenges are facing Singapore. The government is well aware of that and therefore Prime Minister Lee Hsien Loong in a recent speech has broadened the circle of elitists to include those not from an academic path. This is indeed a refreshing change.

Previously, the government, entrenched by the ideas of Lee Kuan Yew, believe in nurturing people to be elites. Well, the true is while MM Lee's system of using scholars has worked well in solving Singapore's past problems, it remains to be seen the same can help produce more entrepreneurs.

Singapore needs entrepreneurs. We have enough bureaucrats in this already highly bureaucratic society and enough able professionals working in the dwindling number of MNCs who have yet chosen to relocate.

According to a report by the US-based National Commission on Entrepreneurship, " Entrepreneurial growth companies make up only a minute portion of all companies in the United States, and just a small percentage of the new businesses started each year, yet they play a surprisingly large role in terms of creating jobs and fueling the economy." (2001)

Not surprisingly, the situation in here was borne out by the 2004 GEM report: new businesses appear to have contributed only 3% of Singapore’s total employment, low compared to the other 30 nations, due to Singapore’s high dependence on MNCs for job creation.

All is not gloom and doom. The report does offer some consoling light to the pitch darkness. Overall, Singapore fared much better than other nations in terms of “access to physical infrastructure”, “low regulation and taxation burden” and “business service effectiveness”. Kudos to the government for this beacon of hope. Count it a blessing for these are the things-in-place which Singaporeans can leverage on: living in a extremely wired country -- Internet access almost ubiquitous -- having well-stock public libraries and other state-of-the-art public facilities.

Don't procrastinate by asking oneself whether it's now a good time or bad time to make the transition. A good or a bad time does not really make a difference but it's one's action and can-do spirits that shall determine everything.

"I never believe that there is a good time, or a bad time. I think it's really a function of yourself. I remember that when I started at the age of 20, 1979, friends and relatives say it's too late to do business. It's too late. You can't possibly win. And 25 years later, we are hearing the same thing."
-- Ron Sim, founder of Osim International Ltd

"Be it bad time or good time, I think it's a matter of how resourceful you are, how courageous you are, how driven you are, to prove yourself."
-- Ron Sim, founder of Osim International Ltd

Read my other essays under the Chutzpah series.

Leo Kee Chye

Wednesday, March 30, 2005