Top Down Singapore and Change

As many of you know, I live a majority of my time in Singapore.  Singapore is a city-state that has transformed itself over the past 45 years since being founded in 1965.  Like many Asian countries the system of government is a single party democracy.  And more importantly, it is a a country that has very strong central planning.

Centrally planned countries, economies and such involve careful top down planning.  And that approach to governance and growth has served Singapore very well.  But I believe that this must change.

Top down planning works best when you have the ability to study the results of others and select solutions from among those that have worked for others.  You look at education and pull some from Japan, some from the USA some from the UK.  Hopefully the best from each place.  Top down or central planning is VERY efficient when the models you adopt are clearly successful.  You can have public debate or not, you can engage in discourse but ultimately you can make difficult decisions, ones that may not be short term popular but which you know are long term effective for transforming your country and its economy.

Where the top down approach fails is when the path is not well known.  For example, one of the stated or public goals for Singapore is to transform itself from a “skills” based to a “knowledge” based economy.  Translated this means that Singapore has progressed from being a country that has a large manufacturing sector to one that wants to do more inventing, creating and design instead.  Driving this is the fact that Singapore has been so successful that now they are a leading first world country and as such have GDP per capita and incomes that no longer allow manufacturing to be competitive here.  Manufacturing plants move out of Singapore to nearby Thailand, Vietnam and Philippines.  A skills based economy implies manufacturing but a knowledge based economy implies something more like Silicon Valley.

So now Singapore has embarked upon a series of initiatives to encourage their population to become more entrepreneurial.   What Small World Group does here is operate and manage an incubator for small companies as a part of this transformation mission.  We are much like the mouse in the Aesop fable of the lion and the mouse.  We are small but perhaps our steady limited actions can be a helpful part of the overall solution.  To complete this metaphor, we gnaw away to set the lion free by starting little high tech companies in the area of clean tech.  And our presence here and our work was enabled by top down planning.

But …

Top down planning won’t work if the ecosystem which they hope we help to create has to be planned.  This has to grow organically.  And it has to be free to take technology in directions that the startups and their entrepreneurial leaders feel is significant, can be profitable, etc.

The act of starting a company is filled with missteps, changes of directions, pivots and such.  Entrepreneurs feel their way in to success.  As Steve Blank likes to say – “no business plan survives first contact with customers”.

Moreover as this transformation occurs – moving from a skills to a knowledge based economy – overall the entire country will be come less manageable by top down methods.  That is why the USA and Singapore are so very different.  The USA is planned bottoms up.  It can pivot surprisingly fast for a country of 350M people.  If something is not working we can all agree to drop it.  But in a centrally planned top down approach – like the now defunct Soviet Union – quick pivots result in no change or revolution.

In the USA we don’t have to have a revolution in order to make fast changes.

So as I finish this essay, I wonder what is in the future for Singapore as they embrace this more unpredictable and certainly less planned future?

 

Posted in Essays, Investing, Personal Stories, Singapore Incubator, Spiritual Threads

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