IS SINGAPORE ENTREPRENEURSHIP WITHERING?

Abstract

Like some Asian economies such as Taiwan and South Korea, that have enjoyed rapid economic growth in the past two to three decades, Singapore owes much of its economic success to a strong government intervention in the economy. Beginning with self-rule in 1959, the Singapore government has increasingly expanded the development role of the public sector through the establishment of new institutions and state enterprises. Many immigrant entrepreneurs were attracted to Singapore by the laissez-faire economic policy practised by the colonial government and their presence has transformed Singapore into a regional entrepot. The consequence was the development of a "trader-mentality", that is, the local entrepreneurs are only interested in investing in projects that are characterised by quick turnovers and profits. They therefore shun away from the industrial sector which is characterised by heavy investments and long gestation periods. In order for its industrialisation programme to succeed, the government was "forced" to pioneer new economic activities and attract foreign investment. Over the past two to three decades, the growth of the government's participation in the economy has resulted in the proliferation of state-owned enterprises in many economic sectors. The abruptness and severity of the 1985 recession have dawned upon the government that the heavy emphasis on state participation in new ii economic activities might be reaching its limits. The government has since realised the importance of local entrepreneurship in furthering Singapore's economic development. However, in order to help in the development of a strong and dynamic entrepreneurial base, there is a need to do a stock-taking on the local entrepreneurship performance over the years. This study attempts to examine the entrepreneurship performance in Singapore over a ten-year period. It is hoped that such identification will shed some light on the various hindrances to entrepreneurship so that more effective and constructive policies might be taken to redress the situation. Subsequently, various measures that have been taken to encourage entrepreneurship are examined and plausible proposals are suggested to further encourage local entrepreneurship.