Entrepreneurship & Risk Appetite
By Gilbert Goh

Singaporeans lack the cutting edge when it comes to producing home-breed entrepreneurs, as compared to other Asian countries like Hong Kong, China or Taiwan. Besides Creative Technology and Hyflux, we hardly have any household names that are worthy of mention. In no means, the cutting edge here refers to our academic qualification and IT literacy.

Our Risk Adverse Culture

During the period while working in China for the past year, I noticed that many people took up small businesses to make a living as they fail to find jobs easily. Lacking the all-important connection (guan-xi) and education, there is simply no choice for them. Many strive on working seven days a week, ten to twelve hours daily, to make ends meet. Some make it rich after years of working very hard in their trade. They thrive without having many choices. It is either they take up doing businesses or starve.

Perhaps, due to the abundance of jobs here, we do not have to turn to doing businesses to make a living. Some of us hop from one job to another for the few hundred dollars in pay increase. Some even have job offers before they graduate! There is simply no need to take any risk to start a business here. This further deepens our risk adverse culture here, which does not help people embarking on businesses. Many joked with me that our children here are told to “Study hard and get a job so that you have enough to start a family” and never “Study hard and start a business so that you can be rich enough to start a family”. Having live with risk adverse families all their life, many of our children lack a real life model whom they can see that have turn successful from doing businesses.

It is not surprising thus that many here fail to hone our entrepreneurial skills as we find work so easily here. Compare to starting a business that is frilled with risks and the unknown, it is human for people here to look for a job. There is simply not much risk here – we merely perform a task and in return we get our due reward, which can also be very lucrative. We then pass on the risk on to the business owner who will also strike it rich if his business picks up. We, as the workers, then are paid a salary for the low risk job that we manage to master.

Compare to the business owner who needs to worry about overhead cost, sales and employing the right person for the job, the worker mentality certainly has make us all soft and dependent. Over the years and generations, we lack the risk taking approach to work and nowadays I heard many people are taking up civil service jobs as they are deem safer than the private sector! We are going backwards as compared to the overseas countries who are all seizing this down time to start businesses on their own as the cost of starting is low now. We miss a great opportunity to allow our people to emerge a little different from the previous generation.

Impact from the Global Economic Crisis

There are also not many jobs available now and given the regular turbulence of the world economy, many of us may find ourselves out of work for at least two to three times in our working life from twelve to twenty months in total. Unless one has accumulated much savings along the way, our working life is laced with uncertainty and instability. It is not surprising that many young graduates become teachers as it is not only secure but also provide a reasonable income. Young honours graduates are assured of at least S$2,700 when they sign up as teacher trainees with the MOE.

Our government is spoiling the young graduates now by absorbing the risk and employing them by the thousands. Not only do they fail to learn resilience but worse of all they fail to muster enough creativity to think out of the box to create opportunities for themselves in this downturn. Many big corporations such as General Motors and Yahoo were created from the economic downturn when cost of doing business is low and there is less competition.

Our export-dependent economy also does not help us here. We will be subjected to much risk. When a global recession comes, we will be hit hard. By over relying on an export business model with little focus on local small businesses, we are also slave to an increasing risky global economy. Professor Linda Lim, from Ross Business School at the University of Michigan, had suggested that that Singaporean businesses should focus on the ASEAN Common Market. The ASEAN Economic Community (AEC) Blueprint had already been drawn up last year. Nevertheless, I see many foreigners now in our country starting small businesses and employing our own people to work for them! This is again a step backward for our own people.

Government Initiative for local Entrepreneurship

Lastly, I see that there is not much current government incentive to drive entrepreneurship right now. Government retraining programmes such as Spurs still follow the regular path of workers looking for jobs after undergoing retraining. There is every chance to foresee that jobs in future will be hard to come by as economies shrink and manufacturing MNCs relocate to cheaper countries. Job relocation means there will be Singaporean workers with redundant skills.

Countries such as Hong Kong, Taiwan, South Korea or China already have programmes in place for their young graduates to tap on to explore business ideas. The Integrated Resort (IR) is notable for producing many service jobs which Singaporeans are not accustomed to working. Up to half the jobs at the IRs will go to the foreigners. In the end, one can only count on companies set up by Singaporeans to continue to remain here. If we can’t count on investment projects supported by the Government’s industry-targeting policy for job creation, then the onus for job creation must go to our dying breed of entrepreneurs with an appetite for risk.

Locally set up enterprises tend not to retrench workers for 2 reasons. The first being the employer shares empathy with his workers and he has the workers’ interest at heart. The second reason is local workers form the critical base of skill set required for the enterprise to function. The employer is dependent on his Singapore base to carry out his business. In comparison to MNCs, there is more disincentive to fire workers and risk loosing critical skill-sets for good. For MNCs, their only sole concern is profit and they will retrench workers to trim cost without any humane consideration. The MNCs are not dependent on Singaporean labour to provide to their clients.

The current recession seems deep-seated and may not take a while to recover. As the unemployment figure continues to grow, I hope that the Government will start programmes to drive entrepreneurship. Many corporate giants such as General Motors and Google were started in the doldrums of economic recession. Unless we have new plans to moot new business ideas, I see that our population will continue be a slave to the worker mentality here. Many will even take up low paying job to make ends meet as they fail to see themselves looking for alternatives somewhere else to make a living.

Conclusion

So what can the retrenched Singaporeans do now ifthey want to step out of their comfort zone? For one, they can try to attend more networking sessions with potetntial business people and talk the same language as them. Somehow when you rub shoulders more with the business community,  you tend to share similar traits as them.

I went out a few times with my businees neighbour who runs an eco friendly aircon business. What he shares and breathes are  entirely differently from  what a typical Singaporean experiences.

He speaks about cold calling on household and business owners to get the next sales and also how he network with other business people to get himself known in the aircon business world.

His lingo is on an entirely differently path with those of the working world. He is not only more creative but also life for him is full of adventure and spirit. He is always on the go and believe that no one owns him a living.  The world is before him and he needs to go and conquer whatever territory he wants to carve out for himself.

I invited him to be one of our transitioning third networking session speaker and many liked what he shared. His “Brand Singapore” consolidated website is a breath of fresh air and many caught on warmly with a site that could bring many local brands together.

As the economy continues to stay in the doldrums, let us hope that we will see more people take up doing business and follow after their passion. After all, there is nothing much to lose here as there are also not may jobs available now.

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2. Facing Joblessness With Confidence – Be Prepared
3. How To Tell Your Family When You Are Being Laid Off