By Justin Hall, Associate at Golden Gate Ventures, Master in Public Policy at LKY School of Public Policy
Recently, there’s been a great deal of discussion (read: controversy) here on the direction and efficacy of Singapore’s entrepreneurship initiatives. These schemes cover a range of policies such as streamlining the process of business creation, facilitating access to overseas markets, or improving the venture capital landscape.
Indeed, the most recent debate concerned MDA’s iJam investment stipulations, and whether they realistically reflect the needs of a typical Singaporean entrepreneur. So the following statement shouldn’t come as a surprise to anyone that has been following the discussion:
Entrepreneurship policy is tricky.
Countless attempts have been made to reconstruct Silicon Valley elsewhere. Cluster initiatives typically rely on the promotion of particular industries, state capitalism, and the unfettered influence of the free market to create new economies. They follow the old adage of, “if you build it, they will come.”
Governments will often publicly announce cluster initiatives simply so they can be seen as “doing something.” Indeed, these initiatives are often politically justified as attempts to overcome coordination failures between different industries or mitigate a market failure.
Unfortunately, these large-scale cluster initiatives, essentially national economic strategies intended to literally create industries from nothing, have a poor success rate. Dozens of projects initiated since the 1980s have failed or floundered, with some notable examples being Japan’s Science City Tsukuba, Egypt’s Silicon Pyramid, and Malaysia’s Multimedia Super Corridor.
The old adage, it seems, doesn’t exactly hold up when it comes to entrepreneurship policy: just building the stadium doesn’t guarantee a world-class team.
But – and here comes the shocker for all you naysayers – Singapore has been largely successful in fostering its own technology cluster.
Most cluster initiatives fail because they ignore a region’s intrinsic advantages. Singapore is lucky enough to have the kinds of intrinsic advantages that not only differentiates it amongst most other metropolitans in South East Asia, but makes the deliberate development of a technological cluster actually feasible: a bustling economy, good governance, world-class infrastructure, great talent, and a culturally-vibrant, desirable living space.
Governments in regions such as Israel, Singapore, and to a lesser extent, New York City, have been able to capitalize on their intrinsic strengths to implement sustainable entrepreneurship policy.
Singapore’s schemes to improve financial liquidity and quality of investment are of particular importance; by their very nature, governments better understand what constitutes a “good investment” rather than a “good entrepreneur.”
MDA’s iJam, NRF’s TIS and ESVF schemes, and SPRING SEEDS are absolutely unparalleled in their funding and scope; in addition to the “big three”, ACE, IDA and tertiary education institutions such as NUS Enterprise round out funding sources. In all, Singapore has committed over $6 billion dollars to entrepreneurship policy.
Israel’s extraordinarily successful Yozma Venture Fund, which catapulted their venture capital industry to stratospheric heights, evenly partitioned a relatively modest 100 million USD amongst ten venture funds. The United Kingdom and New York City are experimenting with business incubation schemes, but certainly not to the same extent.
In the region, Malaysia has perhaps the only other government willing to significantly finance entrepreneurship policies through CRADLE, and they’re seeing some great success stories.
This is not to say that Singapore’s schemes are perfect. Even government policies – especially government policies – can be improved. The heated discussion regarding iJam is a testament to this. However, as an expat, I’m often surprised to hear from my Singaporean colleagues and neighbors the derision with which they refer to existing government schemes.
I’ve heard similar criticisms leveled at the infrastructure, the traffic, the public transportation, the food, and now to government financing. And to them, I always respond, “Pfft, you should totally see what it’s like outside of Singapore. You guys have it made!”
Again, existing government schemes can be improved, and I hope they are. The fundamental difference between Singapore and other countries is that the government has shown a willingness to iterate on its policies. i.Jam ironically enough, is a perfect example of this, having been reiterated into i.Jam Reloaded.
You could even argue that the NRF’s TIS was an evolution of i.Jam, with SEEDs and EVSF representing yet another deliberate, appropriate policy progression. This iterative approach to policy development is indicative of one key virtue: the government’s willingness to listen to key stakeholders to improve existing processes.
In fact, I’m hoping to capitalize on this quality (excuse the pun). I’m currently conducting two surveys on the venture capital industry here in Singapore, one for Singapore-incorporated startups, the other for venture capital funds, to determine ways to improve the startup ecosystem.
For the Singaporean startup founders reading this, I would appreciate it if you could take the time to fill out this survey. For the investors from institutional and venture funds, please refer to this survey.
It shouldn’t take you more than five minutes. The government has already shown a willingness to listen, and more importantly, improve. I am hoping to give them the information they need to do just that.
If the Singapore government can retain this quality of learning and iteration (and the hundreds of millions of dollars), then I am tremendously optimistic about the rapidly growing tech scene in our Little Tech Dot.
This survey is not commissioned by the NRF or Golden Gate Ventures. The data collected will be used to create an academic policy analysis per the curricula of the Lee Kuan Yew School of Public Policy. It will then be submitted to the NRF for their review.