Singapore government to improve on its entrepreneurial policies — and how you can help

By Justin Hall, Associate at Golden Gate Ventures, Master in Public Policy at LKY School of Public Policy

The Singapore Parliament Building. Photo: Erwin Soo

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.