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The Business Times

Singapore geared up to be leading innovation hub

Education system, policies and govt are key indicators

SINGAPORE has what it takes to be a hotbed for entrepreneurship and innovation, says Michael Song, professor of marketing at the Bloch School of Management, University of Missouri-Kansas City.

He believes that Singapore's excellent education system, public policies and efficient government are key indicators that the city-state will be able to transform itself into a leading innovation hub.

Singapore has embarked on an aggressive push for companies here to raise productivity and innovation levels, and has said that more efficiency is necessary to drive the economy in future.

In 2010, for instance, it introduced the Productivity and Innovation Credit (PIC) scheme, under which companies will be able to claim tax credits on 250 per cent of the first $300,000 spent in six areas - ranging from basic research to investing in automation and training workers.

Apart from encouraging more training and mechanisation, Singapore can also work on strengthening entrepreneurship education, says Dr Song.

'What Singapore can do to speed up the potential of becoming a hotbed for innovation is to increase the entrepreneurship education, provide resources for start-ups (such as a nation-wide Web portal which gives roadmaps for start-ups in Singapore), and promote the spirit and mind-set for innovation and entrepreneurship,' he says.

Dr Song, a scholar, educator and consultant in innovation management and entrepreneurship, was recently in Singapore to conduct simulation workshops for students at the Nanyang Technopreneurship Center (NTC) on New Venture Creation. He has been ranked the world's top innovation management scholar by the Journal of Product Innovation Management.

According to Dr Song, there have been interesting debates globally on the idea that 'entrepreneurs are born, not made'.

While innate tendencies seem to make certain people more inclined to identify and act on promising business opportunities, Dr Song is of the opinion that 'success principles can be taught, mistakes can be avoided, and the roadmap of an entrepreneurship journey can be learned'.

This is why stories of failure should not be kept hidden, he says.

And of course, when faced with setbacks, what innovators and entrepreneurs need is more encouragement to bounce back and pursue their innovative and entrepreneurial instincts.

So in the drive to become an innovative and entrepreneurial nation, '(Singapore) can do much more to promote the value of entrepreneurship and showcase the journey of entrepreneurs and innovators regardless of their successes or failures,' says Dr Song.

On this front, he suggests that Singapore try and replicate the successes brought about by Kansas City's legacy of entrepreneurship.

'The people in the city take pride in their reputation as innovators and entrepreneurs, and support their development.'

Singapore also needs to 'strategically plant the entrepreneurial bug', 'because it can be infectious', he says.

Entrepreneurs and innovators here should also set their sights further. Once they have perfected their business model and start-up strategies here, they should look to expand globally, enthuses Dr Song.

To attract the best innovators to further improve the entrepreneurial and innovation landscape here, Singapore needs a clear national strategy and provide tax incentives for start-ups. In this regard, Singapore can take a leaf out of China's book.

'China has (adopted) an excellent strategy in the past three years creating initiatives such as the 'Thousand People Plan' to attract the best innovators to go to China to work full or part time,' says Dr Song.

The 'Thousand People Plan' was implemented by China to lure high-level personnel to China from overseas by offering high remuneration packages and lucrative government funding.

Dr Song notes there are now more start-ups in China than any other country in the past few years, cementing its growing position as a hotbed for innovation.

One advantage Singapore has over China is the nation's active and consistent enforcement of intellectual property laws. This is a major impediment to innovation in China as there will be no incentives to innovate if there are no safeguards to guarantee that innovations will be protected by the law, he says.

'My hypothesis is that if China was to set up a nation-wide independent court which will strictly enforce the IP law, innovation activities and investment will be tripled in the country.'

A recent report by the International Labour Organization - which made known that nearly 200 million people are unemployed and that another 40 million jobs need to be created each year for the next decade - has stressed the need to ramp up productive job creation.

Dr Song firmly believes that innovation and entrepreneurship hold the key to resolving this problem. Empirical research undertaken by him and two others have revealed that on average, each entrepreneur is expected to create 512 jobs in his or her lifetime.

Innovation has been described as a double-edged sword. While innovation is supposed to increase productivity, it may inadvertently lead to a reduction in manpower. This is something Dr Song does not identify with.

'If all innovation did was put people out of work, it would be bad for total employment. But it creates new work and more valuable work, as well.

'Innovation also creates more demands and provides solutions to problems people face. Therefore, more innovation will (ultimately) create more jobs,' he emphasises.

Dr Song: 'My hypothesis is that if China was to set up a nation-wide independent court which will strictly enforce the IP law, innovation activities and investment will be tripled in the country.'

Bryan Koh