Singapore policymakers long ago realised that the city state would need to raise productivity and become an innovation economy. The Singapore government has poured in the resources and created the hardware to make Singapore a highly innovative environment, but how innovative is Singapore really?
Singapore has always performed well in global economic competitiveness polls, with most surveys underlining the government’s success in creating a business-friendly environment. According to an Innovation Report by Boston Consulting Group in 2009, Singapore was the world’s leading Innovation environment with South Korea in second place. Another Study uses an Innovation Capacity Index (ICI) which rates the competiveness of Innovation Environments places Singapore as the leading Asian economy in 6th position overall. There is no question that the broad environmental conditions are highly favourable for innovators, and yet in practice, Singapore’s delivery on innovation disappoints.
The Monitor Group in conjunction with the Institute for Policy Studies (2005) investigated the nature of innovation at firm level. The troubling finding was that much of the innovation activity (88%) was directed at driving efficiency, whether this be quality improvements or cost reduction. A mere 12% of innovation activities were driving top-line growth. Some of the challenges firms face in driving innovation is the manner in which innovation is managed. More than 50% of Singapore firms claimed they manage innovation in a top-down manner. This is in line with the “command-and-control” culture within Singapore organisations and which runs counter to the more “entrepreneurial culture” required for innovation.
So while Singapore is far ahead of the pack in investing in the hardware for innovation there is a clear lack of “innovation culture” or the human software for innovation.
Singapore has made excellent ground over the past 40 years but this has been achieved through a top-down management style, which, critics argue, has perhaps stifled organic innovation in the workplace. Among the key Asian economies, Singapore has the highest proportion of state-owned or government-linked companies. Some 45% of Singapore’s top 20 companies, for instance, have state shares of more than 20%. The proportion of GLC or government shares among Korea’s top 20 companies is 15%, and among Japanese and Hong Kong enterprises, just 5%.
The heart of the software issue can be found within the strong Confucian values which still reign in Singapore. Confucian societies are tightly organised, are collectivistic, hierarchical, place an emphasis on social order and harmony and are concerned with gain social approval of the group. The implication is that Confucian values do not naturally breed the kind of questioning of the status quo that innovation demands.
A study of Singapore leadership styles by SIM and the Gallup Organisation found that Singapore Leaders were considered: less visionary, less optimistic, less willing to challenge old ways of doing things and less likely to sacrifice their self-interest. Singaporean workers felt their company leaders did not get them to look at problems from different angles and were not interested in hearing employee feedback. There was also no encouragement to be more creative or entrepreneurial in the job. Most disappointing, is that employees felt their best ideas were not implemented!
A huge innovation opportunity is being missed here in converting Singapore’s innovation promise into reality. How can Singapore fix this “human factor”? A seismic shift is required in how leaders are selected and developed in Singapore. Singapore needs to acknowledge that the natural leadership abilities of their best may not suit the practice of innovation. The Singapore education system has a lot to contribute here, we need to reward the outliers who challenge conventional wisdom. An obsession with scholars who excel in the sciences will need to make way for more charismatic leaders who are great people managers.
A closed and regimented leadership style may have worked in the past, but next 40 years will demand a radical rethink which involves bringing the “human factor” up to speed.
A peek into Singapore’s Innovation Quest