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Ex-Civil Servants, Generals, Ministers are not Entrepreneurs

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  • Sg_Review@yahoogroups.com
    Editors word; The following letter was received following a recent Straits Times article ENTREPRENEURSHIP; With naive bureaucrats, how can S pore win?
    Message 1 of 1 , Dec 17, 2003
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      Editors word;
      The following letter was received following a recent Straits Times
      article " "ENTREPRENEURSHIP; With naive bureaucrats, how can S'pore
      win?" Straits Tijmes 8 Nov 2003.

      http://forums.delphiforums.com/sammyboymod/messages/?ctx=16

      Sammyboy.com's Alfresco Coffee Shop
      From: KILL_BILL (BICKYBICKS) 13:08
      To: ALL
      17 Dec 2003

      Dear Mr Goh Chok Tong

      I would seriously urge you and your government to stop sending your
      scholars, ex army generals, retired ministers or president scholars
      as CEO or executive directors of government link companies and
      statutory boards.

      The reason is obvious. They have FAILED to bring out the best for the
      companies and statutory boards.

      These companies and statutory boards need Entreprenuers.
      Entreprenuers must come about because people are hungry-- hungry to
      do big things - and have the courage to do it.

      Your scholars, ex army generals, ministars or president scholars aren't hungry.
      They have been properly and continuously fed by you since they were
      18 years old, probably after their "A" Levels.

      No doubt they can study. Most of them can become good administrators.
      However, when they you put them in a company or statutory board
      asking them to run it with profit, they just lacked the touch. The
      reason is simple. They were never "hungry" before and they know they
      will never be because they know that you will not abandon them as
      they are scholars, retired generals or president scholars selected by
      you in the first place.

      Frankly speaking and without resorting to figures or statistics,
      Singapore Technologies has failed because with the obscene amount of
      money your government has pumped in, they should be the world's
      richest and most profitable company by now if they are run by REAL
      entrepreneurs.

      Instead, because of political or other "alignment" reasons, they have
      been staffed by your scholars, ex-army generals and president
      scholars.

      I am not saying that your scholars, ex-army generals, retired
      ministers and president scholars are lousy or stupid. They are smart.
      They can think. But they are not entreprenuers cos they never grew up
      as one. They grew up as protected species knowing that life will be
      comfortable because they have achieved good academic results in their
      formative years. Their training and mindset are geared
      towards "administration" and not "entrepreneurism".

      Just compare Ho Kwon Ping of Banyan Tree and any of your statutory
      board/GLCs CEOs or scholars. I am not saying that Mr Ho is a perfect
      entreprenuer. I am saying that he is one who is hungry cos he knows
      that if he fails, he will not get the opportunities of transferring
      to another same paying job like your scholars or ex-army generals.

      Similarly, Bill Gates know that had he failed, he will be earning
      peanuts.

      Then, there is a question of who is more successful with the
      resources that were thrown at them. Who is a real entrepreneur? Think!

      Do us a favour. Do Singapore a favour. Please...


      ---------------------------------------------------------------------

      Subject: ENTREPRENEURSHIP; With naive bureaucrats, how can S'pore
      win?

      Straits Tijmes
      8 Nov 2003

      GOVT'S ROLE IN ENTREPRENEURSHIP
      With naive bureaucrats, how can S'pore win?
      By Susan Long

      A former army officer, Philip Anderson is today entrepreneurship
      professor at Insead's Asian campus in Singapore. The American also
      used to teach at Cornell University and Dartmouth College in the
      United States. He minces no words as he talks to SUSAN LONG about the
      naivety of Singapore bureaucrats and the futility of legislating
      entrepreneurship

      The biggest weakness of Singapore is bureaucracy, says Prof Anderson.
      Many of those who regulate entrepreneurship here have absolutely no
      experience in the private sector. They're honest, smart and
      efficient, but they're naive. -- CHEW SENG KIM

      ----------------------------------------------------------------------

      WHAT do you see as the key strength and weakness of Singapore's model
      of state-driven entrepreneurship?

      The key strength is critical mass.

      Hong Kong has an awful lot of 10-person companies that never get any
      bigger. There's no company there as famous as Taiwanese personal
      computer firm Acer that has the ability to drive demand and create an
      ecology around it.

      South Korea's world-scale chaebol are probably the best example of
      critical mass. There's nothing that Samsung or LG cannot do because
      of lack of resources. If they can't do it, it's due to some issue
      other than size and wealth.

      So Singapore's state-encouraged model has that great virtue. Instead
      of having 75 little teeny players that nobody knows, Singapore has a
      few big companies, like Singapore Technologies, which have the scale
      to be truly well-known. If you go to Silicon Valley, people have
      heard of Walden International and Vertex Venture Capital. They also
      know Temasek Holdings.

      But the biggest weakness is bureaucracy. Many of the people who
      regulate entrepreneurship here have absolutely no experience in the
      private sector. They're honest, smart and efficient, but they're
      naive.

      It's a simple naivety. They have no idea how to run private
      enterprise and they're doing the best they can, without having that
      kind of knowledge.

      What troubles you most about such naivety?

      There is a natural tendency for bureaucrats to be risk-averse. If
      you're a bureaucrat and you have a choice between doing a risky thing
      that might blow up in your face, but might really help entrepreneurs,
      versus 'let's just follow the rules, tick by tick', any bureaucrat
      worth his salt is going to pick the second choice.

      Here in Singapore, you have many civil servants who have never been
      anything but that. If you're a civil servant, your No. 1 job is to
      support your minister. Fine and dandy, but it doesn't really help you
      understand how to support entrepreneurs.

      This problem of naivety comes about because the only way to learn how
      to operate in the private sector is to just do it. The average civil
      servant can listen but he hasn't been there, hasn't done it. And it's
      just not a transferable experience.

      Singapore ultimately will have to build a generation of civil
      servants who have lived in that world and have that experience.
      There's no way they can be smart enough to just see from the outside
      what it's like to live in a world with no IM (instruction manual).

      Taking all this into account, what meaningful role can the Government
      play in proliferating enterprise? What is your response to all those
      who wish it would mind its own business and lay off business?

      Well, there is nobody either in the United States or Singapore who
      believes in complete libertarianism - where the government does
      nothing.

      The question is how much public sector involvement.

      In the US, there's no question that the government, particularly in
      its role as customer, has had a great deal to do with the success of
      entrepreneurship. The reason why the US led the world in
      semiconductors was because the US government was buying them.

      The US likes to create an environment within which entrepreneurship
      will flourish, then walk away and let that happen. The biggest
      advantage it has is Nasdaq, no doubt about it.

      However, I have never met a government that can pick winners. When
      the US government tries to do things like subsidise venture capital
      for small firms, it ends up losing a bunch of money. It's not any
      smarter than anybody else.

      So what should Singapore do with all its GLCs (government-linked
      companies) and the increasingly loud charge that they are suffocating
      the economy?

      If I were the Government, I would adopt a general policy that a GLC
      makes sense only when the whole is worth more than the sum of its
      parts.

      For example, Singapore Technologies has some core and some non-core
      businesses. Non-core doesn't mean unimportant. It means the synergy
      isn't there and they are not drawing on enough common assets
      leveraged across the entire infrastructure. Insead, for example,
      doesn't own and run its own cafeteria. We're education people, we're
      not lunch people.

      But for political and emotional reasons, it has not been common for
      Singapore Technologies or any other GLC to spin off viable parts of
      the business.

      Part of that, in my opinion, is because of the colonial legacy.
      Singapore Technologies was built with the people's money and the idea
      of selling off parts of your heritage to a bunch of foreigners seems
      like going backwards.

      But there is another solution. And this is what I'd urge the GLCs to
      look at: Management buy-outs can create enormous value by giving
      management a significant stake in the business and putting
      management's feet to the fire.

      The best buy-outs require people to mortgage their houses and take a
      lot of personal risks and that's why they will work themselves extra
      hard on behalf of the business.

      What happens when you own a significant stake in your own business is
      that you are directly responsive to signals from the market. It's
      your profit, it's your pay cheque.

      There is a very well-developed global industry for management buy-
      outs. In North America, the US is clearly the world leader. In
      Europe, Britain is extremely good at it.

      But nobody in Asia is the financial king of the management buy-out
      industry. So it could in fact become a specialty of Singapore.

      What are some misfires you see in Singapore's bid to breed more
      entrepreneurs?

      The best way to learn how to be an entrepreneur is to work at the
      right hand of a successful one. At the end of the day, this is an
      apprentice business.

      I think the Government here has a tendency to take bright scientists
      and engineers and say: 'Okay, you guys have come out with this great
      technology, how are you going to commercialise it?' There is the
      implicit assumption that if you're the smart engineer, you ought to
      be the company's CEO.

      What I'd much rather see is a scheme where people with the potential
      to be in growth ventures have the opportunity to work directly with
      and be mentored by great entrepreneurs early in their careers.
      Singapore needs to be training more CTOs (chief technical officers)
      and CFOs (chief financial officers), not so much entrepreneurs. I
      don't think you can train entrepreneurs.

      But there is something that you can do that is very important.

      It is very common to find people here who have been very successful
      in large companies flounder in a start-up when they don't have the
      big brand name on their card.

      So you have to get people up to a level where they can hit the ground
      running and contribute in their apprenticeship from Day One, instead
      of spending the first four months on the entrepreneur's payroll,
      asking: 'Gee, things are really different around here. How come this
      doesn't look like DBS?'

      What do you make of this whole creativity drive?

      The Government is emphasising push over pull a little too much. I
      open up The Straits Times and I see all these advertisements
      declaring 'Come to my class, I'll make you 57 per cent more creative
      in 90 days'.

      But creativity is not the issue at all. I don't think that the
      Taiwanese are more creative than Singaporeans although they have much
      better results when it comes to entrepreneurship.

      Get two guys to sit down at a hawker stall and brainstorm for half an
      hour, and I guarantee they will come up with what looks like a good
      idea. But that's not where great businesses come from.

      Great entrepreneurship starts with understanding important problems
      that have to be solved. To get a round of funding in the life
      sciences, for example, involves signing an agreement with a big
      pharmaceutical company worth at least US$1 million (S$1.75 million).

      At the end of the day, it's not enough to say we've invented this
      wonderful molecule or uncovered a hitherto unknown cancer mechanism.
      What you have to know is: What are the 10 biggest problems that
      Bristol-Myers Squibb is willing to write a cheque for today?

      What are the three biggest headaches that Glaxo SmithKline would pay
      somebody to take it off their hands? That's more important than sheer
      technical knowledge.

      I don't think most Singaporean entrepreneurs are connected enough to
      the market to start with a problem worth solving. They tend to start
      with either an idea or a template: Somebody else does such and such
      and I could do that cheaper or better. They don't start by
      saying: 'Wait a minute, here's a real problem.'

      So the Government is spending too much effort promoting creativity
      and not enough effort immersing people in what problems are worth
      solving and what problems will people write a cheque to solve.

      Give us an example how you would go about it.

      Say the Government wants Singapore to be an education hub.

      One way to do this is to mandate 15 other versions of Singapore
      Management University (SMU) - which was a relative top-down success
      in such a short period of time - in every conceivable sector from
      fashion to the dramatic arts.

      Another is to shortlist a dozen people, who have the ability to
      inspire people and manage change, and put them on a year-long
      programme to work side by side with someone overseas who is creating
      a new education property.

      The Singapore Government will subsidise it so that this entrepreneur
      will be able to afford you. The only condition is that it has to be a
      real job with a genuine mentoring relationship.

      A year later, come back to Singapore, there is no obligation, but we
      want to see what you do with your Olympic torch, now that it has been
      lit.

      Some may start something, others won't, but they will understand the
      spirit. And this will do more to create an education island rather
      than cloning SMU to the nth degree.

      What else has to happen here first before Singapore's graduates will
      consider entrepreneurship a respectable career choice - no less than
      the professions or the civil service?

      Entrepreneurship has to become socially prestigious here.

      If you ask the average young Singaporean, 'If you want to grow up to
      be a famous, important, fulfilled Singaporean, what's the best way to
      do it?', the answer is still: 'Get the Government to send you to
      Cambridge University, then Harvard Business School and bring you back
      to become a civil servant.'

      Singapore needs examples of very bright people who come back,
      apprentice themselves to an entrepreneur, then start a company. By
      the age of 32, while their classmates are busily rising in the civil
      service, they're millionaires.

      The great thing about young people is they don't necessarily go for
      the big pay cheque. They take a long-term view and ask: 'How will
      this experience build my human capital?'

      In selling entrepreneurship as a career choice, we keep holding up
      all these guys who, while studying at Nanyang Technological
      University (NTU), invent a piece of software and make a lot of money.
      I salute these guys, they are wonderful, but they're a true minority.

      The average person needs to leave NTU, go work with a veteran
      entrepreneur, learn how it's done, and years down the road, start his
      own outfit.

      You also need a great exit vehicle. You've got the beginnings of a
      really good one with the Singapore stock market, which is honest,
      fair and attractive.

      But Singapore needs to own and operate the Nasdaq of the East.

      When it does, you'll get entrepreneurship, not just from Singaporeans
      but from people who come here because they want to be listed here.

      If I were the Government, I would work my rear end off to ensure that
      the Nasdaq of the East is located right here.

      From time to time, Singapore vexes over the fact that its crop of
      entrepreneurs are largely entrepreneurs of circumstance who resorted
      to business only because they were Chinese-educated, without a degree
      or devoid of other options. Do you see problems with such a
      predominantly underdog profile?

      First of all, it's not necessary to divert a lot of the very best to
      entrepreneurship.

      What is most important is integrity, track record and connections,
      not intelligence. There's a threshold. You're either smart enough or
      you're not. Past that, an extra IQ point won't matter that much.

      You need people who are very hardworking, passionate and obsessed
      about solving a problem, as opposed to those who have proved they can
      get 100 marks in an examination.

      What matters is to say to Singaporeans: 'If entrepreneurship
      interests you, there is a path for you to learn how to do this.'

      All that the school does is get you to a level where you're worth an
      entrepreneur's time. The entrepreneur finishes the job. But make that
      proposition open to everybody and then let's see who's interested.

      The only issue is that these underdogs have to be able to connect
      socially to the overdogs.

      For example, you get an astonishing number of entrepreneurs in the US
      who come from not very prestigious universities but have a lot of
      Harvard MBAs working for them.

      Where you have a problem is when a guy graduates from the University
      of Idaho and can't ever hire anybody who went to Stanford University
      and has all those connections.

      As long as you don't have a society where connected people only work
      for other connected people, then let opportunity reign.

      What is the best way to get rid of the Singaporean fear of failure?

      The first thing to do is to reduce the genuine risk of failure. If
      Vertex gave $10 million to some young NTU graduate and said, 'Go
      build a great software company', unless this guy is a genius, he
      probably will fail because he just doesn't have the experience.

      So reduce the risk of failure by apprenticing young people to
      entrepreneurs who can teach them how to do it so that execution risk
      is minimised.

      I think a lot of Singaporeans fear failure for good reason because,
      without preparation, they really are going to fail.

      The second thing is, it is a fact the Government sets the tone in
      Singapore. If it said 'We want you to learn how to swim to Sentosa',
      I assure you many Singaporeans would find a way to do it.

      So what the Government needs to come up with is a set of safeguards
      like a rational bankruptcy law and more supports which address market
      failure and leverage the private market.

      It needs to say to the people: 'We will ensure that you won't fail
      because you ran out of cash because the banks were too risk-averse.'

      It needs to signal to the banks that: 'We want innovation, we want
      new products that are better than those out of New York or London, we
      don't just want you to have a whole bunch of money.'

      That probably also means redefining what failure is. Is business as
      usual success or failure? If you redefine it as failure, you
      say: 'I'm not satisfied as long as the world's most innovative
      financial services run out of London.'

      So the Government has to redefine what failure is, such that business
      as usual is not good enough any more.

      E-mail: suelong@...

      ---------------------------------------------------------------


      Date: Fri, 7 Nov 2003 11:08:54 +0000 (GMT)
      From: apson lim
      Subject: Call to lighten govt hand for innovation to thrive
      To: Sg_Review@...

      http://business-times.asia1.com.sg/story/0,4567,98876,00.html

      Published November 6, 2003
      Business Times

      Call to lighten govt hand for innovation to thrive

      It may also help stem S'pore's brain drain: Gail
      Fosler

      By SIOW LI SEN

      (SINGAPORE) The government has to pull back from the
      Singapore economy for innovation to flourish,
      according to well-known economist Gail Fosler.

      "Innovation really takes place where new, maybe even
      bold and what I call non-conventional, ideas are
      encouraged, and that is not the Singaporean way,
      right?'
      - Ms Fosler
      Economically efficient allocation of capital and
      labour is always more supportive of growth for
      high-income countries, she said in a recent interview
      with BT.

      Ms Fosler, who is chief economist of The Conference
      Board and a director of DBS Group Holdings, said Japan
      is a good example of a country in which a highly
      regulated structure prevents resources from moving to
      take advantage of economic opportunities. And because
      of this, its economy is still extremely externally
      dependent.

      As for Singapore, 'you're not going to get the new
      business opportunities, you're not going to get small
      businesses, the small medium enterprises to grow', she
      said.

      'You're not going to get innovations. You're always
      going to be waiting for people who've innovated in
      other geographies to come to Singapore for some kind
      of replication.'

      Ms Fosler noted that Singapore is thinking
      strategically and constructively about some of its
      major industries. 'Still, you can imagine it can
      become much more of a hotbed for innovation if you had
      more of that reward structure,' she said.

      'As long as government services are the most highly
      rewarded, as long as government-linked enterprises are
      not really taking risks in a globally competitive
      sense, they will tend to underperform.'

      Lightening the heavy hand of government may also stem
      the loss of Singaporeans, according to Ms Fosler.
      'Many Singaporeans studying abroad never come home,'
      she said. The question is how to provide the kind of
      economic opportunity that's going to bring expatriate
      Singaporeans back to Singapore.

      Singapore has a low tax regime and people can turn
      labour income into capital, Ms Fosler noted. But
      because of the regulatory structure, it is not so easy
      to find ways to invest that capital other than in
      financial and traditional pension-type investments.

      'Innovation really takes place where new, maybe even
      bold and what I call non-conventional, ideas are
      encouraged, and that is not the Singaporean way,
      right?' she asked.

      On the volatility of the Singapore economy, she said
      the shift towards services and being open and small
      makes it seem that the Republic imports all the
      problems of the region whenever something happens.

      Previously, Singapore was able to combine a highly
      educated work force with low wages, so it was a magnet
      - and a relatively attractive magnet - in the region
      for a tremendous amount of investment, she said.

      But with the region having no net foreign investment
      for years because it has migrated to China, the
      economy has been left much more on its own. 'It's like
      when your kids go out on their own,' she said.

      Singapore has a significant service economy, but that
      service economy has suffered extraordinary shocks. 'We
      used to think all the shocks, economic shocks only
      affected the industrial economy. Now we've got
      economic shocks that affect the service economy,' Ms
      Fosler said.

      According to her, Singapore's transition to a more
      diversified economy - instead of just focusing on
      technology - is still not deep or broad enough, but
      the global recovery will allow some breathing space.

      The Singapore economy now has all the benefits of this
      wave of global growth, and a couple of years from now,
      when the US slows down, it may be much more
      diversified and much more stable, Ms Fosler said.

      'I think the Singaporean model was sort of caught
      off-guard, as it were, and it got very, very focused
      on technology production as opposed to a much more
      diversified economic model,' she said.
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