When it comes to innovation, Singapore government shoots itself in the foot

The Singapore Parliament Building. Photo: Erwin Soo

Governments can help or hinder innovation. In Silicon Valley, startups and investors would rather that the government meddle less and stick to what they do best: Provide basic infrastructure.

Here in Singapore, things are a little different. Government agencies have their signature on almost every startup investment through co-funding schemes like TIS, and ACE Startups. For the most part, government agencies like SPRING Singapore and IDA, as well as universities like NUS and SUTD have been progressive in their efforts to create an oasis of innovation.

Their approach has drawn praise, and I admire how they’re collecting feedback from startups and investors every step of the way, iterating on their policies as the years went by.

Then it started doing something stupid.

In May this year, the Media Development Authority, a government agency that also happens to have its own startup funding scheme in iJAM, made what appeared to be a unilateral move that bypassed the Singapore Parliament.

It issued a new licensing requirement stating that news websites exceeding 50,000 unique visitors in Singapore will be required to put up a performance bond of SGD 50,000, following the practice by broadcasters here. Ten online news sites, mostly government-related, were ordered to apply for licenses, with sg.news.yahoo.com being the only non-state-sanctioned site.

The license stipulates that online news sites are expected to comply within 24 hours to MDA’s directions to remove content that is found to be in breach of content standards.

As expected, the online community exploded in a fit of anger. The country’s rag-tag group of socio-political bloggers, often united in disunity, coalesced under the #FreeMyInternet movement which culminated in a public protest that drew thousands.

Even mainstream newspapers, under tight regulation, have given the fracas a strong public airing.

But while the arguments against licensing have mostly been confined to civil rights and free speech, the business community has mostly been silent. Until now.

Local Chinese daily Zaobao reported that five of the world’s largest tech companies — Facebook, Google, Yahoo!, Salesforce and eBay — have expressed their unhappiness at the new licensing regime through the Asia Internet Coalition. These companies have a strong presence in Singapore. Here are some choice quotes from the missive (full letter at the bottom):

This new regulation – and the regulatory trend that this may be indicative of – could unintentionally hamper Singapore’s ability to continue to drive innovation, develop key industries in the technology space and attract investment in this key sector.