Entrepreneurship in Singapore

Brought on a little tour of Block 71 today. It’s a wonderful little place for entrepreneurs and business-starter wannabes to try and work on their ideas or start work on their ideas without too much capital nor too much expense. Rental is mostly free, particularly in the co-working space; power is free too so you can be your first employee at a desk and get free power, sometimes with free coffee and potentially free events to attend. Life probably has never been so good for an entrepreneur.

Of course, the costs associated with failure is significant given the opportunity costs. Most of these kids can command pretty decent amount of pay in the existing tight labour market; but I think that place offers a kind of co-working experience, ideas-exchange and tinkering culture that would prove valuable for these entrepreneur wannabes.

What I am concerned about is that this sort of spirit remains only within the tech sector without spewing into the more traditional sort of engineering-based industries. The real economy is still stubbornly reliant on manufacturing to grow. The rise of services is simply an accounting illusion; manufacturing increasingly outsource some of their process design and engineering to third party ‘consulting firms’ which are services. Therefore, value that was previously treated as being generated from manufacturing now becomes re-classified as services. The economic activities taking place is still the same. The bulk of these ‘new services’ are just repackaging and most of the staff or ‘entrepreneurs’ are merely ex-employees who have started these new businesses to capture the benefits of increasing outsourcing.

Yet in order for things to be changed, there has to be more cross-pollination. By far, there is no evidence that the consulting services yielded more engineering innovation in their respective spheres. If anything, the increase in competition only serves to drive improvement in slightly more superficial things such as more user-friendly 3D modelling graphics or better visuals that have little impact on the actual carrying out of the projects. In other words, the kind of market competition we have been generating may not actually be good. This is something for our economic ministries to ponder over…