Scrutinising Tan Jee Say’s economic plan

Kelvin Teo

SDP's Tan Jee Say speaking at a rally.

SDP's Tan Jee Say speaking at a rally

The recent General Elections of 2011 threw out a few plans and proposals covering diverse areas that impact on a typical Singaporean’s life. One of such plans which caught the attention of many is Singapore Democratic Party candidate Mr Tan Jee Say’s $60 billion National Regeneration Plan which is split up evenly and rolled out to six respective areas – industry, enterprise, schools, healthcare, community and family.

In the section of the plan dubbed as the “Enterprise Regeneration Fund”, Jee Say proposes that the government devotes $10 billion to the creative industry and enterprise (*note that this article will only address the enterprise regeneration fund section of Jee Say’s National Regeneration Plan). The creative industry encompasses economic activities such as advertising, architecture, art, crafts, design, fashion, film, music, performing arts, publishing, Research and Development, software, toys and games, TV and radio, and video games.  The proposal is aimed at enterprising Singaporeans especially the well-travelled and well-educated ones who want to start up a company within the industry. Driven by individual creativity, skill and talent, such economic activities have the goal of generating wealth and jobs. Jee Say proposes that the government provides via the regeneration fund grants of up to $1 million on the basis that the ones running the start-up are willing to commit a significant sum to the venture at the minimal ceiling of 20%.

The first response to Jee Say’s proposal is whether its implementation will follow the industrial targeting practices, which our government has done previously, or at the opposite end of the spectrum, letting the free market decide for itself. Since the spotlight is now on the creative industry, the devil is in the details of Jee Say’s proposal, which is anticipated to be released to the public in due course. Thus, the essential questions are firstly how much the government is to be involved in Jee Say’s proposal to promote the creative industry and its capacity of involvement? Hopefully, these questions can be addressed in upcoming publications by Jee Say.

Why the topic of industrial targeting was brought up was due in part to our previous experiences, especially when life sciences was the flavour industry of the day. When the government identified life sciences as one of the key pillars for growth, there was suddenly an exponential increase in enrolment places for life sciences degree and diploma programmes in our universities and polytechnics respectively. The problem was that there was an asynchrony between the supply of trained life sciences graduates and the maturation and development of the nascent life sciences industry, which means there was an over-supply of life sciences graduates fighting for limited employment vacancies within the industry. Thus, a possible scenario that can happen when we suddenly want to promote the creative industry is that spots within our institutions will increase to produce graduates who will go into the industry. If there is a lag or stall in the development of the industry, graduates who were trained for the industry will be left high and dry, and we could be faced with the problem of structural unemployment, a mismatch between demands of labour market and skills of the graduates (when they could have gone to other industries, but lack the skills and knowledge).

The question is ideally what type of role should the government play? Ideally, the government should play a supportive role in terms of searching for funding sources, attracting investments from venture capitalists and assisting in research and development. Jee Say proposes that the government funds up to $1 million to a start-up firm. A better consideration will be to seek funding from the private sector in the form of investors or venture capitalists or to link budding entrepreneurs to conferences or seminars frequented by potential investors. Thus, for example, a group of enterprising net-savvy youths came up with a new and unique social media platform which requires funding to further develop their product. How the government can assist in this instance is to sponsor their trip to Silicon Valley for seminars or fairs relevant to their field where they can present their product to potential investors in the hope of winning investments.  Or the government can help tap into their network of venture capitalists or investors to link them up with the budding entrepreneurs.

$1 million is by no means a small sum, and where possible, alternative funding sources should be sought before coming up with the full sum. As far as creative industry is concerned, the government is in the midst of developing Mediapolis by 2020 in a 19 hectares facility with intention for it to become a digital media hub. As part of the initiatives to promote the digital media industry, funding for digital media-related project development comes from not only government sources, but also from venture capitalists, international media players, business angels and more surprisingly, the finance industry in the form of banks. In fact, it was mentioned that the finance community is increasingly getting involved in the media industry. If alternative sources of funding are sought, Jee Say will probably not require the $10 billion in its entirety.

The other avenue in which the government can support the creative industry is through Research and Development support, based on lessons from our Taiwanese counterparts. Small medium enterprises (SME) have limited capacities for Research and Development (R and D).  This is where the government plays a supportive role in mobilising resources and fund R and D. The National Science Council of Taiwan established the Science and Technology Information Centre to provide local academia and the industrial sector with information on developments in science and technology both at home and abroad. The centre collects, analyses and processes R and D information gathered from home and abroad, and also serves as a contact point for all science and technology institutions in Taiwan. An open laboratory is also established in a bid to make accessible its national laboratories to the private sector for R and D, bringing together private enterprises and researchers to upgrade the technology level of local industries. Emulating the Taiwanese, we can establish industry centres of excellence that conduct R and D, collect, analyse and process R and D information gathered from home and abroad. They can also be the contact point for industry and academia from both at home and abroad. Thus, for example, a group of enterprising youths who wish to develop new generation video games may make use of the open laboratories and government funding to conduct R and D in computer algorithms to produce 3D motion effects, and in the later phase of development, the product will be packaged in a manner that is appealing to buyers. Hence, increased synergy between industrial-level (applied) and academic research will mutually benefit each other, with research being translated from theory into useful applications that benefit people’s lives.

These dedicated industry centres of excellence also have an educational role to play besides R and D. It is pointed out earlier the dangers as result of our institutions opening too many places to train graduates for a particular industry as they risk being unemployed. The role of these centres of excellence is not to run degree programmes and churn out graduates, like traditional institutions of higher learning. Their educational goal is rather to run courses or workshops for interested members of the public who wish to enter the industry or/and interested in setting up their own start-ups. Being up to date with the latest research and trend within the industry will put such centres as learning institutions at the forefront as they are able to equip learners with up to date knowledge and progress within the field.

The mode of governance in enabling a creative industry should be a supportive one, rather than a top down technocratic approach. Thus, the relationship with industry should  be one of partnership rather than a hierarchical one with the government at the apex.

Moving on to our educational institutions, they also have an important part to play in creating an environment in which our future entrepreneurs can flourish. Besides being receptive and adopting an accepting attitude towards innovative and out of the box thinking, education policies can be revised accordingly to accommodate budding entrepreneurs. Semester leaves or even long-term study leaves can be granted to students who are serious about setting up their own start-ups. A good example of such is Sergey Brin, co-founder of Google, Inc. When enrolled in a Computer Science Ph.D. programme at Stanford University, he worked with co-founder Larry Page on a data-mining system that was the precursor to a superior search engine. This led to the birth of Google, where he is currently the Director. He has since being on leave from his Ph.D. programme at Stanford. Another entrepreneur-friendly policy that can be adopted by our educational institutions is to allow previous students who dropped out of their degree programmes to pursue their start-ups to resume studies in the same programme should they wish to resume their studies.

It is not an easy task brainstorming of a possible avenue of growth for Singapore even to the level of implementation for actors and stakeholders concerned with Singapore’s development ranging from the government to politicians and academics. I always thought there is a potential for growth within a particular industry which is reflective of the Singapore brand, which not even Jee Say himself has thought of, but it is something that is close to our hearts – MAKAN (eating). Even tourists who visited Singapore remember us fondly for one thing – our local cuisine. There is perhaps potential to explore opportunities within our food industry and export our cuisines abroad from pre-prepared frozen chicken or mutton satays, you tiaos, roti pratas with or without eggs, etc. Even for dessert dishes, we can export our pulut hitam or even frozen Puteri Mas durian puffs if possible! From an economics perspective, we have what is known as reputational comparative advantage when it comes to our local delicacies. This means that impressions by consumers in other countries on exported products are based on reputation of the country of origin. Since our international visitors have a positive perception of our food and we are known for our food in other countries, we have an advantage in this area.

The electoral debates have thrown up a number of analogies like drivers, co-drivers, and last but not least, a popular dish known as “rojak”. Now that I am miles away from home, wouldn’t it be nice if we exported pre-prepared rojak so that I could be savouring this whilst writing this piece?