Rather than aim for scientific breakthroughs, sell knowledge: Researchers

SINGAPORE – The buzz words “innovation” and “productivity” have long been bandied about, in Singapore’s relentless quest to stay ahead. Now it turns out the key to this could lie in fundamentally relooking the way policy makers define the two concepts.

The first Singapore Competitiveness Report by the Asia Competitivenes Institute at the Lee Kuan Yew School of Public Policy – affiliated to Harvard Business School’s Institute for Strategy and Competitiveness – was released yesterday.

The 88-page report, authored by a trio that includes Harvard don Christian Ketels, could give a taste of the growth-strategy recommendations by the Economic Strategies Committee due in January.

Even as Singapore aspires to become an innovation-driven economy, the report noted the Republic’s fundamentals “remain broadly more in line with a high-skill version of the investment-driven model”. While MNCs and Government-funded research institutes tap the scientific talent that has been lured here, they are unable to translate their research into new products and services on a significant scale.

Also, creative activities, while growing in scope, remain a small part of the economy with Singapore facing the “obvious challenges” of “trying to instill innovative thinking and risk-taking in a highly organised society with a tradition of manufacturing for exports products that were created and designed elsewhere”.

But such observations “do not imply Singapore has failed on the mission it has laid out for itself”. Rather, they indicate the country needs to refine its ambition – and it could start by adopting a version of an innovation-driven economy that “might be a better fit”.

For instance, it could act as a “global connector of knowledge”, identifying fields where existing knowledge is not fully applied, and supplying scientific knowledge to firms.

The researchers wrote: “Being an important global knowledge-innovation hub with focused research laboratories, world-class companies, a secure legal environment and highly attractive conditions for talent is closer to Singapore’s current competitive strengths than is becoming an R&D hub creating the next generation of global technologies and products based on scientific breakthroughs.”

Innovation should also move beyond being “highly science-oriented”. The report reiterated, innovation also encompasses the introduction of new concepts, strategies, business models – even public services, an area in which Singapore “has arguably been most innovative”.

In the short-term, policy makers should work with MNCs and Government-linked companies to spawn programmes that allow some of their Singaporean managers to create spin-offs. This would “sow the ground for more locally-rooted entrepreneurship and … innovation”.

Not making it with less, but creating more with what’s given

And when it comes to productivity – the economy’s Achilles’ heel – Singapore’s goal should no longer be creating an existing product or service with fewer factor inputs. It should be about creating “more customer value given a set of factor inputs”.

On the ground, this would mean going beyond developing workers’ skills. For instance, policy makers should strengthen firms’ management capabilities to organise the best use of knowledge and skills of each employee and business partner.

And, apart from encouraging firms to wean off low-cost, low-skill foreign workers, they could also strengthen cluster linkages to enable businesses to develop highly-specialised skills with significant value-add.

Nanyang Technological University economics don Choy Keen Meng pointed out that, in practice, “customer value” is difficult to quantify. “Do we use satisfaction rankings? Qualitatively, it’s something worth talking about but if you can’t measure it, then we can’t tell whether we are performing well,” said Assistant Professor Choy.

Stressing that Singapore’s fundamental competitiveness remains “strong”, the researchers said it “should not overreact to the current crisis”.

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